Tuesday, April 14, 2009

Terrorists are simply Cowards

Republican Politics, American Style
Published on April 16th in Metro Éireann By Charles Laffiteau
Today I want to discuss Irish Republicans instead of American Republicans, even though Irish and American Republicans do share certain affinities including a propensity to use violence to advance their political agendas because they are bullies and cowards.
The word “coward” comes from an old French word coart (the modern French version is couard) and is a combination of the French word for “tail” and an agent noun suffix. It means “one with a tail” or one in the habit of turning it, and it was derived from a dog’s habit of putting its tail between its legs when it is afraid. A person who acts in a cowardly manner is someone who demonstrates a weak or ignoble lack of courage.
Research indicates that adults who bully have personalities that are authoritarian, combined with a strong need to control or dominate and that they use violence as a tool to conceal their shame or anxiety and to boost their self esteem by demeaning others. Risk factors for adult bullies include tendencies towards envy and resentment as well as quickness to anger and use force, addiction to aggressive behaviors, concern with preserving one’s self image and engaging in obsessive or rigid actions.
Bullies use aggressive behavior in an effort to perpetuate the myth that people who act this way are really tough people. But the truth about bullies is that they are weak, cowardly and inadequate people who cannot interact in a mature manner because they lack knowledge, experience, wisdom and emotional maturity. Bullies are actually fearful, dysfunctional, disordered, aggressive and emotionally retarded, which is why they resort to physical and or psychological violence to get their way. But many bullies are also very adept at manipulating the perceptions of other adults, who by their failures and inactions condone the bullying. The sad truth is that only very weak people have a need to bully.
Two thousand years ago the ancient Roman statesman, Lucius Annaeus Seneca, observed that “All cruelty springs from weakness” and “He who does not prevent a crime when he can, encourages it.” Seneca’s observations about the Roman Empire’s bullies and those who excuse their behaviour, square neatly with my own views regarding Irish nationalist bullies and their misguided Irish Republican Army supporters.
Unfortunately bullies or terrorists, call them what you will because there actually isn’t much of a difference, have been with us for thousands of years and so they are likely to still be around many years from now long after all of us have departed this earth. The only real difference between them is that terrorists are bullies who have also wrapped themselves in cloaks of religious, ethnic or nationalistic rhetoric so that they can justify their propensity for violence and solicit weak minded individuals to do their dirty work for them. Real leaders lead by example whereas terrorist leaders are simply cowards who manipulate others to do what they can’t or wouldn’t be stupid enough to do themselves.
Mind you, I’m not saying that there aren’t people living in this world who don’t have legitimate ethnic, political or religious grievances. Many dissident political, ethnic and religious minorities have suffered for centuries from the pernicious effects of overt and covert discrimination by those wielding political and or military power. But it is one thing to protest in a peaceful and non-violent manner against such unfairness and quite another to use these injustices as an excuse for cowardly and criminal violent behaviour.
The suicide bombers used by Tamil rebels, Islamic extremists and other terrorist groups are weak minded individuals who have been manipulated by terrorist leaders into thinking that murdering innocent individuals is a moral and justified act of self sacrifice. Hmmm. If killing others and yourself in the process is so moral and justified then why aren’t the terrorist leaders taking these actions themselves instead of manipulating others to so? Why don’t these terrorist bullies confront soldiers who are capable of defending themselves instead of stealthily attacking unarmed soldiers and civilians, then slinking away before they can be identified with their tails tucked between their legs?
The truth about terrorist leaders and those who do their bidding is that they are no different than drug lords and the criminals they employ. All they really want is power and to be a law unto themselves. They have no use for laws that would protect minorities or that would regard them as equal under the law with others, because they want to be above the law. They care nothing for other people; only for what those people can do for them, which is why they have so little regard for the lives of others and gladly sacrifice them.
There is no difference between Mexican drug lord Joaquin “Shorty” Guzman causing thousands of deaths in Mexico’s drug war and the thousands of deaths bin Laden is responsible for in his pseudo-religious political jihad. So what is the difference between John Gilligan sending his henchmen to murder an unarmed journalist and the IRA sending thugs to murder unarmed soldiers, policemen and pizza deliverymen? What they have in common is neither Gilligan nor these IRA thugs would ever dare to do their dirty work in anything but a cowardly manner.
Courage is the ability to confront fear, intimidation, pain, risk, danger, uncertainty and to act rightly in the face of popular opposition, shame or discouragement. Courage, real courage, means standing up against something or someone that is unjust or evil knowing that the consequences of your actions might lead to your death or imprisonment. Aristotle also notes that the vice which represents a deficiency of courage is cowardice.
People like Mahatma Gandhi, Veronica Guerin and Dr. Martin Luther King possessed true courage. On the other hand, what the IRA dissidents, Osama bin Ladens, John Gilligans and Joaquin Guzmans of this world have is a deficiency of courage; that vice Aristotle called cowardice. So next week I will discuss why extremists use religious reasons to justify their cowardly actions.

The economic future looks bright for America

Republican Politics, American Style
Published on April 9th in Metro Éireann By Charles Laffiteau
Given the short comings of the French approach to increasing its population (and thus its taxpaying workforce) that I cited in last weeks column, today I want to explore why America’s population is growing faster than that of any other developed country as well as the long term benefits America will realize as a result of this.
Unlike France, the American government doesn’t pay couples to have children, although it does provide parents with income tax deductions that partially subsidize the cost of child care and the expenses associated with raising children. But these income tax breaks are nowhere near as generous as the subsidies provided by France and other developed countries such as our Scandinavian neighbours. So why have America’s fertility and population growth rates now taken an upward trajectory when all the other developed countries’ fertility and population growth rates are on a downward trajectory?
If we take a closer look at America’s current demographic structure and the underlying characteristics of its fertility and population growth rates we can see that it is not skewed in favor of any one ethnic group. As one might expect the fertility rate of Hispanics is higher than that for other ethnic groups at 3.0, but the rate for non-Hispanic whites is 1.9 while the rate for African-Americans is 2.1.
America’s population growth is also fairly well balanced between growth driven by immigration and growth resulting from the birth and fertility rates of native-born Americans. That means America’s population growth isn’t subject to the destabilizing effects the addition of large numbers of immigrant workers and their families can have on a nation’s workforce and its social structures.
America’s steady and fairly balanced population growth will also continue to keep America’s population younger than the aging populations of other developed countries. Currently the median age in America is 36.6, but its 40.4 in Europe and Ireland is the only EU nation with a median age lower than the US at 34.6. According to Bill Frey, a demographer at the University of Michigan, the median age in America in 2050 will only be 37 while in Europe it will be almost 53. In other words, the difference between US and EU median ages is likely to rise from 4 to as much as16 years by 2050.
This means that Americans will have to continue to spend more than EU countries on education, but it also means that US taxpayers will have to shoulder a much lighter burden of retiree pension and healthcare costs than its EU and East Asia neighbours between now and 2050. Retiree benefit costs are expected to skyrocket in America and the developed countries of Europe and East Asia thanks to the retirements of post World War II baby boomers. As a result, US government debts could rise to a level almost equal to 100% of US national income by 2050. But government debts would rise to over 150% of income in East Asia and EU overall, and to over 250% in Germany and France.
A younger population will also result in lower labour costs for companies operating in the US and make American companies more productive and globally competitive. This is exactly what happened in Japan during the 1960s and 1970s when its workforce was younger than the US labour force and those lower labour costs helped Japanese companies become much stronger competitors around the world. Using current demographic trends, the number of people over 65 will be equivalent to 60% of the working-age population in Europe and Asia in 2050, compared to only 40% in America.
These huge economic impacts on countries with declining populations can best be addressed by encouraging more young people to immigrate to these countries. But except for the years between 1920 and 1970 when it was encouraged by France, immigration levels have always been low in European and Asian countries. So even if these countries suddenly decided to throw their doors open to immigrants, I think there is a good chance they won’t get the results they would be hoping for.
America is a nation of immigrants and 75% of all the people in the world who have ever emigrated from their native countries have moved to the United States. That’s why Kenneth Prewitt, former head of the US Census Bureau, argues that “in the struggle to find workers to support growing economies, nations that are hospitable to immigrants will have an advantage.” In other words, immigrants tend to go where they already have friends and or family waiting to welcome them and help them get jobs. So if you were an immigrant where would you prefer to move; to a youthful and multi-coloured America (where you likely know someone) or to an aging Europe with a 90%+ white population?
There are also military and geopolitical implications associated with the declining populations of countries in Europe and East Asia. Despite its promises to narrow its defense spending gap with America to address the military imbalance within NATO, ever since the end of the cold war Europe has chosen to increase spending on social programmes instead. As a result the United States now spends twice as much on military defense than the entire EU spends each year and that military imbalance is unlikely to ever be corrected. Why? Because if Europe is unwilling to spend what is needed on defense when people over 65 are only 30% of the working-age population, what do you expect Europe to do between now and 2050 when the proportion of 65 year olds doubles?
I would contend that anyone who thinks the United States’ economic, military and or political power has peaked and has already begun the same slow but inexorable decline that Rome and England experienced is making a big mistake. Thanks to its positive demographic trends, it is much more likely that America’s economic, military and political power will become even more solidly entrenched during the rest of this century. What other country has America’s potential?

Wednesday, April 1, 2009

Fertility is a Good Thing

Republican Politics, American Style
Published on April 2nd in Metro Éireann By Charles Laffiteau
Today I want to discuss how the developed countries in Europe and other parts of the world can maintain their quality of life and pay for their escalating retiree pension and healthcare costs without raising the taxes of those who are still working.
There are many who will not agree with me or like what I am about to say but the only viable solution that I can see involves the three I’s of Immigration, Integration and Impregnation. That’s right. Immigration, Integration and Impregnation.
“Wait a minute. You mean to tell me that during these tough economic times our government should allow more of those poor people from developing countries into our country, even though they’ll be competing with some of us for jobs?” Yes, that’s right.
“Are you also telling me that we need to be hospitable towards these immigrants and that our government needs to make sure that these immigrants are treated equally with those of us who were born and raised in this country?” Yeah, you’re exactly right.
“Are you also suggesting we might want to consider having more children, which means we’ll have to spend our money raising them instead of on holidays, and that our government should spend more on schools and teachers to educate them?” Yep, sure am.
“Well I think your solution is bollocks! There is no way I’m going to sit by and allow more of ‘them’ into my country, much less allow my government to treat ‘them’ as equals and I’m not about to give up any of me pints or holidays so I can have more kids.”
OK. Then let’s talk about the alternative. How would you like to see your taxes increased so the government can pay for your pension and healthcare after you retire? Does increasing the VAT and or taxes on petrol, alcohol, fags and the like sound ok?
“No way am I going to stand for that. Everything I buy costs too much as it is.”
OK. Then how does increasing the income tax you pay to around 50% sound?
“No. That won’t work for me because my income taxes are already high enough.”
OK. Then what do you suggest the government do to increase its tax revenues?
“Make corporations and businesses pay more taxes and stop wasting money on feeding and housing ‘them’ immigrants. Start taking care of your own instead of everyone else’s and make our government agencies operate more efficiently.”
OK. Do you also have a plan to replace the jobs that will be lost when some of those corporations and businesses pull up their stakes and exit from this higher tax environment? How do you plan to prevent those businesses that remain in the country from raising their prices and passing along some or all of the costs associated with their higher tax bills? What about jobs for the people in the public sector who will be made redundant when the government decides to begin operating more efficiently? Will you tell your children they have to pay higher taxes than you paid to fund your retirement?
“Uh, no I don’t really have a plan to deal with that stuff but I’m sure there is one.”
Hmmm. Seems to me that the truth of the matter is you just want to have your cake and eat it too. Who wouldn’t like that? Unfortunately, the world doesn’t operate that way. There is a cost to be paid for everything and if you don’t want to pay higher taxes then the money to pay for your retirement and healthcare costs has to come from somewhere. But if you raise taxes on businesses, they will pass them along to you with higher prices and or move their jobs (and yours) out of the country. Cut back the public sector and you’ll have to find jobs for them somewhere else or have them go on the dole.
What I am proposing is that you consider an alternative involving increased levels of immigration coupled with enhanced integration and impregnation policies that will boost the population of your country and swell the number of people paying taxes. Those new immigrant taxpayers will supply your government with more tax revenues and they will enhance your country’s overall economic activity, which will then create even more new jobs. Then your government won’t have to raise the VAT or income taxes you pay now or the taxes that your children will be paying years from now after you have retired.
“I don’t know, I still don’t like the idea of letting more of ‘them’ into our country. We have too many of them as it is and the ones that work are taking jobs away from us. Why shouldn’t we just pay our country’s women to have more kids like France does?”
Well you make a good point there. In France, the payments and subsidies for working women and couples to have more children have indeed increased that country’s birth and fertility rates. But there is also a downside to subsidizing childbirth that I think you have overlooked. The government funds that encourage childbirth come from the same basket the government uses to finance pensions and health services for retirees. Since France’s baby boomers will soon be retiring, this means that population growth will have to be large enough to provide for both increasing payments for children as well as retirees. But I doubt it will be enough to cover both because France’s fertility rate still falls short of the replacement level of 2.1 children. This means that a substantial part of the financial burden of paying for both will fall upon future generations in the form of higher taxation.
But there is another alternative to governments paying their nation’s working women to have more children that can also lead to replacement level fertility rates as well as a large enough increase in population to pay for increased retiree costs. I will discuss this American approach in more detail next week.

More about the Three I's

Republican Politics, American Style
Published on March 26th in Metro Éireann By Charles Laffiteau
In my follow up to last week’s column, this week I will attempt to explain why France and the United States have the two of the highest fertility rates of all the developed countries in the world as well as why economists and some politicians view this as positive factor for their country’s future financial health and well being.
Believe it or not, by the end of the 18th century France was actually the most populous country in Europe and the third most populous country in the world, behind China and India. Unlike the rest of 19th century Europe, France also saw very few of its citizens immigrate to America. But during the 19th century, France’s fertility rate began to decline much faster than other European countries, causing France to fall behind Russia, Germany, the UK and Italy as Europe’s fifth most populous nation in 1900. France’s low fertility rates also resulted in virtually no population growth between 1900 and 1945 at a time when other European countries, including Ireland, had booming populations and much higher fertility rates than they do today.
In an effort to avoid the negative economic consequences of declining population, France undertook efforts to increase immigration by encouraging citizens from its colonies in North Africa and Indochina as well as those living in other countries in Southern and Eastern Europe to immigrate to France following the end of World War I. Even though fertility rates in France and other developed countries soared following the end of World War II, France still continued to encourage immigration from its former colonies in North Africa, particularly Algeria until the mid-seventies. Today France has over 3 million citizens who are of Algerian descent, many of them 3rd or 4th generation.
But beginning in the seventies fertility rates in America and all other developed countries began to decline thanks largely to women in those countries entering the workforce, delaying both marriage and childbirth, which in turn meant fewer children. Today, the only reason why countries in Europe with low fertility rates like Germany and Spain have thus far avoided population declines has been because of increases in immigration. But thanks to France’s success integrating its immigrants, its fertility rate is the highest in Europe even though France stopped encouraging immigration 30 years ago.
While France’s 2.0 fertility rate still falls short of America’s and the developed country population replacement rate of 2.1 children per couple, France’s immigrant women from North Africa and Turkey are at least partially responsible for this. Native French women only have an average of 1.7 children each but their immigrant women counterparts give a boost to France’s fertility rate by having almost 3 children per woman. Since France has a chronically high unemployment rate, especially among its immigrant population and their descendants, I asked some French immigrants why they wanted to have 2 or more children given such bleak future employment opportunities.
They told me that while their children may have difficulty finding jobs once they reach adulthood; they still believed that their children’s future job prospects would be roughly equal to those for the children of native French people. But they also told me that the French government had numerous income-based policies such as free child care and tax benefits, which encouraged women to have more children than they might otherwise. They went on to say that even higher income families received many of the same benefits such that only a fraction of any working woman’s income had to be spent on child care.
I thus concluded that the reason why France has grown to become the 3rd most populous country in Europe was because it had both opened its doors to immigration at the beginning of the 20th century and then it instituted policies to encourage impregnation in the latter half of the 20th century. I also concluded that the reason France now has the highest fertility rate in Europe was because it had been more successful than other European countries, in terms of integrating immigrants into French society through its use of government policies that treated all of its native citizens and immigrants equally.
Hmm, increasing Immigration plus better Integration equals more Impregnations. I + I = I+ So my formula, D+E=F+ or (cultural) Diversity + Equality (of opportunity) = Fertility + (higher rates of) appears to explain what is going on in France. But will it also work to explain why America has the highest fertility rate for developed countries? How would this formula work in America, given the fact that the United States doesn’t have anything close to France in terms of policies that encourage women to have children?
Well before we examine America’s fertility rate in more detail, maybe we should discuss why I think increasing immigration and or higher fertility rates bode well for all citizens living in more developed countries. Precisely why do economists and politicians view this as positive for developed countries’ future financial health and well being?
To be sure, if having a larger population was the key to the door of greater economic power then China and India would be the most powerful developed countries in the world instead of the world’s most populous developing nations. Most people believe that a larger population diminishes their quality of life by exacerbating problems like urban sprawl and strains on countries’ transportation and education infrastructures. It’s also a fact that increased immigration leads to more competition between a country’s native citizens and immigrants for economic resources and increased social tensions.
But allowing a country’s population to decline means its labor force will become older, smaller and less productive. This has major implications for public policy given the fact that developed countries also have to provide pensions and health care for their retirees. As the workforce gets smaller, governments will have to steadily increase taxes of the remaining workers in order to pay for their retirees’ healthcare and pensions. Isn’t there a better solution? Let’s discuss one next week.

The Three I's

Republican Politics, American Style
Published on March 19th in Metro Éireann By Charles Laffiteau
Last week I closed my column by saying “just as the US led the world into the current economic recession, so too will the US lead the world out of it.” One of my friends questioned this reasoning given the continuous stream of bad economic news currently emanating from America. I told them that, in addition to my belief the US economy would bottom out and start improving before the EU’s, America had a number of other factors working in its favor that Ireland and the EU did not.
Today I’ll be discussing America, France, the EU and the three I’s; Immigration, Integration and Impregnation. As a basis for this discussion I will be using the equation D+E=F+ or (cultural) Diversity + Equality (of opportunity) = Fertility + (higher rates of).
All of these different factors affect a country’s demographic trends, which I believe have a wider and longer lasting impact on a nation’s society than any other single political, social or economic force has. But we don’t notice changes in demographics like we do changes involving those other forces because a country’s demography changes very gradually and over much longer periods of time, usually several decades
A 19th-century French philosopher named Auguste Comte once said that “Demography is destiny” in an effort to emphasize its huge yet very subtle influence on the political, social and economic changes that occur in any given country. Comte is also considered the father of “sociology” so I find it ironic that so many practitioners of social science (including anthropology, communication studies, criminology, economics, geography, history, political science, psychology, social studies and sociology) don’t pay more attention to changes in the demographics of a nation’s population.
But during the past 50 years some economists and politicians in the world’s developed countries have taken note of demographic trends that they find worrisome. However, unlike most of their fellow citizens, their biggest concern isn’t the effect that unfettered immigration of people from poor developing countries will have on their nations’ education and social welfare system. Rather their concern is that their countries will soon be unable to financially support their existing education and social welfare infrastructure unless something is done to arrest a decline in their national populations.
Most of these concerned economists and politicians have only recently come to the conclusion that the solution to the problem of declining population involves one or more of the three I’s; Immigration, Integration and or Impregnation. That is because the two main reasons why countries’ populations begin to decline are low rates of inward migration and or low fertility rates. In the developing world countries need higher birth and fertility rates of 3 or more children per woman because so many children die at a young age and adults there have a shorter life expectancy. But in more developed nations like the US and Ireland, women of child bearing age need to have only slightly more than 2 children each in order to maintain their countries’ populations at their current levels.
When the number of impregnations and subsequent childbirths in developed countries falls below the replacement fertility rate of 2.1 children per woman for a period of 30 or more years, then that nation’s total population begins to slowly decline unless it is offset by significant levels of immigration. If those immigrants are able to successfully integrate with the native population, they and their children will remain in that country as productive members of society. But if they do not find acceptance in that country, these immigrants and their children will either leave or become a social welfare burden to it.
One doesn’t have to look far to see examples of immigrants who either have or have not been successful integrating into the native communities of their new homelands. Many here in Europe cite their respective country’s Muslim communities as the most glaring example of less than successful integration of immigrants into their societies. Judging by the attitudes expressed by both Muslim émigrés and non-Muslim natives in the UK and Germany, such observations appear to be fairly accurate.
But despite the fairly recent 2005 and 2007 urban riot in the mainly Muslim banlieues of its largest cities, this doesn’t seem to be the case in France. Contrary to many news reports at the time, there wasn’t any religious aspect to these disturbances, rather they were social riots triggered by the poor housing, racial discrimination and unemployment of up to 40% in the grim housing estates surrounding France’s largest cities. The young rioters were not just Muslims either, but also included many Christian teenagers from the Caribbean as well as many other non-Muslim teenage immigrants.
In fact, a recent Pew research poll taken after these riots concluded that “All in all, one might conclude that, despite their problems, ¬prime among them joblessness among youth generally, not just Muslim youth, the French need to take no integrationist lessons from their European neighbors.” Polls show that in France far fewer Muslims see any kind of conflict between being a devout Muslim and living in modern French society. Almost half of America’s Christians, 48%, and France’s Muslims, 42%, consider themselves to be American or French national citizens first (not as a Christian or Muslim first) vs. only 7% in the UK, and 13% in Germany. In Muslim countries, those putting national identity ahead of religious, ranges from 6% in Pakistan to 39% in Indonesia.
Despite widespread reports of French nationalists and Americans distaste for Muslim immigrants, research indicates that Muslims in both the US and France are generally more assimilated and prosperous than Muslims in the rest of Europe. As a result, Muslim immigration to France and to America has continued to increase. In fact more people from Islamic countries became legal permanent US residents in 2005 than in any other year in the previous two decades.
But France and America also share another similarity I’ll discuss more next week; they have the highest fertility rates of all the world’s developed countries.

Toxic Assets

Republican Politics, American Style
Published on March 12th in Metro Éireann By Charles Laffiteau
A couple of weeks ago I suggested that the US and other governments take possession of their banks “toxic assets” so that those banks could go back to private investors and raise fresh capital that they could start lending again with a clean set of books. To reduce the cost to taxpayers I also suggested that those governments could get warrants when they acquire toxic assets that would convert to bank stock the governments could sell to private investors, and hire private equity managers to oversee the valuations and disposal of those “toxic assets” to ensure that they’re sold only when the time is right.
Well it now appears that the US government is going to pursue a hybridized version of what I suggested. Instead of taking these “toxic assets” off the books of the banks and creating a “bad bank” to hold and dispose of them, President Obama’s economic team is proposing to set up several public-private funds to compete with each other in valuing and buying these bank assets. The basic idea is to attract private investors to both manage and put their own money into these funds with the US government as their partner agreeing to cap their losses and share in the risk of buying these “toxic assets”.
President Obama believes that by competing to buy these “toxic assets”, these new “vulture funds” could establish some more realistic market prices for the “toxic assets” that will allow banks to sell them off. While the Obama administration’s proposal isn’t as clean as what I proposed two weeks ago, I am cautiously optimistic that it might succeed in realizing the same goal; cleaning up the banks books so they can once again begin to raise and subsequently lend new capital to businesses and consumers in the US.
In the meantime I believe the economic situation in the US and the rest of the world will continue to get worse before it begins to get better. There is an old saying that “it’s always darkest before the dawn” and I happen to believe that is the case here as regards the current global recession. But I am now detecting the first glimmers of light at the end of that long tunnel of economic misery the world is now traversing. The first indication that the worst may soon be over will be the bottoming out of the stock market in the United States which may be closer at hand than most people currently think. So why exactly do I believe this might be the case?
Yesterday the US stock market dropped to its lowest level in twelve years, and while it may have a bit further to fall yet, I suspect it is now fairly close to its bottom. That means there are some really good companies with strong balance sheets and excellent future earnings potential available at relatively low stock prices. Savvy investors will begin to buy these stocks now or in the near future while they are cheap which will in turn stabilize the overall stock market.
Note I said stabilize, not reverse, the current downward trend of stock markets around the world. Global stock markets won’t start moving back up again until a majority of private investors become confident that the financial crisis is well on its way to being resolved. Because we are still some months away from being able to predict with any level of confidence that the banks have finally cleaned up their books, I foresee a period of small movements up and down for stock markets over the course of the next year.
The smartest investors are the ones who step in and begin buying stocks or investing when the market in one of these kind of “troughs”. They don’t wait until they are certain the market has bottomed out but instead buy whenever they see weakness in an already down market. They do so because they know that once the majority of other investors regain confidence in the market they will then be competing with them for the best investments and paying a higher price for them as a result of this competition.
The other big components of the current financial meltdown were the collapse of home prices followed by a collapse in consumer spending. Once again, at least in the US, I see the first glimmers of light in both of these areas as well. Consumer spending in the US actually rose a modest .06% in January for the first time following a record six months worth of steady declines. While it may decline again in the coming months I think this is a signal that the downward trend is now over and the US will enter a period of more modest advances and declines in consumer spending during the rest of 2009.
Private investors have now begun moving into the US housing market as they see opportunities to buy homes for roughly 45-50% of the prices they would have paid two years ago before the housing bubble burst. This is a sign that the US housing market has finally reached a bottom and any further declines in home values will be relatively modest. Just like stock prices however, don’t expect home prices to begin rising again until they have spent some months languishing at the low end of the housing market.
Similarly, while US unemployment continues to rise, manufacturing activity in February actually increased for the first time in more than a year. This is a sign that the steady contraction in US business and manufacturing which has been going on since the beginning of 2008 is also coming to an end. Nevertheless, you should expect US economic, employment and spending reports to continue to be pretty dismal for the rest of 2009. But the good news for Ireland and the rest of the world is; just as the US led the world into the current economic recession, so too will the US lead the world out of it.

President Obama's State of the Union Address

Republican Politics, American Style
Published on March 5th in Metro Éireann By Charles Laffiteau
Last Wednesday at 3:15 in the morning I found myself doing something I can not recall ever doing before. It took me a moment to realize that I had actually started to clap at the end of an hour long speech I had just listened to on the telly. Sure, I’ve clapped, along with other members of the audience, at the end of other speeches I have heard, but not when I’m sitting alone in front of the television. When I realized what I was doing I immediately stopped myself and wondered; “Why on earth am I clapping at my TV?”
Well I guess the answer is that I must have been pretty impressed by President Barak Obama’s first speech to a Joint Session of Congress, which is the traditional first term President’s equivalent to the State of the Union address. When President Obama addresses Congress and the nation again at this same time next year, this speech will be called Obama’s first State of the Union address because only a President who has been in office during the previous year is entitled to deliver a State of the Union speech.
But even though this speech wasn’t actually a State of the Union address, it was still treated like one since it was broadcast nationally by all ten of the major television networks in America. In fact President Obama’s speech was watched by viewers in more than 37 million US homes, the third largest TV audience to ever watch a State of the Union address and here in Ireland I was able to watch the speech broadcast live by the BBC, SkyNews and France 24. This unprecedented interest in President Obama’s first major speech after his inauguration only a month earlier underscores both the American and worldwide interest in President Obama’s plan to deal with the economic recession.
Neither I nor my parents were alive when Franklin Roosevelt, only eight days into his first term as President, delivered the first of his famous and reassuring fireside chats to an American public reeling from the devastating effects of a worldwide depression. Then as now America and the rest of the world were anxiously hoping for bold and effective economic leadership. While it remains to be seen if Obama will be as effective as Franklin Roosevelt, last Wednesday night I think President Obama delivered the kind of message that Americans and citizens of other nations were so desperately hungry for.
Instead of being lofty and inspirational like his presidential campaign speeches, I characterized President Obama’s inaugural address as being a very sober and serious speech. That’s because President Obama was preparing Americans for a long and nasty recession while simultaneously reassuring citizens in America and around the world that we would eventually overcome the many challenges we are currently confronting. I felt the tenor of his inaugural address was quite appropriate given the rather dire economic conditions America and the world was facing on the day he became our 44th President.
Last Wednesday night President Obama’s hour long speech added some layers of detail that were missing from his relatively brief 18 minute inaugural address. In his inaugural address President Obama had also challenged those “who suggest that our system cannot tolerate too many big plans”. One month later, having already achieved the passage of his top priority, the $800 billion economic stimulus bill, President Obama proceeded to lay out his other “big” plans for improving education, creating jobs through investments in rebuilding America’s infrastructure and developing energy independence.
President Obama also outlined his plans for reforming Medicare and Social Security in order to set the stage for implementing a universal healthcare program health care and an upcoming federal budget that doesn’t hide things like the cost of the Iraq war as well as his plans to help beleaguered US homeowners. Having spent the weeks following his inauguration using a pessimistic tone to apply pressure to Congress to pass his stimulus plan, President Obama used more optimistic language in this latest speech detailing his plans while also promising that America “will emerge stronger than before.”
He acknowledged Americans anger towards Wall Street but also reminded them that many of them had also played a role by using credit recklessly and spending beyond their means. Obama then sought to convince viewers that the only way to avoid making the current economic crisis worse may be to commit more taxpayer money to cleaning up Wall streets financial mess. He cautioned Americans about opposing this idea saying that “we cannot afford to govern out of anger or yield to the politics of the moment.” Obama went on to say that “it’s not about helping banks, it’s about helping people.” He made the case that America and the world faced a decade of hard times unless we acted to stabilize the banking system so banks could begin lending so we could buy cars and homes again.
President Obama also continued to refrain from using partisan rhetoric during his speech and instead encouraged Republicans to take the “carrot” he was offering and rise above partisan politics and try work with him in developing bipartisan solutions for the many problems the country faces. But Obama also showed his Republican opponents the “stick” by giving his audience a powerful critique of the policies of the past 8 years which led up to the crisis which he and his administration had just “inherited.”
I thought President Obama did an excellent job of making the case for using the current economic crisis to make far reaching changes and reforms in the areas of healthcare, education and energy independence by creating “opportunity from ordeal.” President Obama closed his speech by reminding Americans that the world was watching saying “As we stand at this crossroads of history, the eyes of all people in all nations are once again upon us, watching to see what we do with this moment, waiting for us to lead.” Well one thing’s for sure, Obama is leading.

The Automaker bailout

Republican Politics, American Style
Published on February 26th in Metro Éireann By Charles Laffiteau
Today I want to discuss the additional government loans being proposed for GM and Chrysler and expand on my comments in last week’s column about my belief that the US and other governments’ must take ownership of their banks “bad assets”, in order to get them off their books so that banks can start raising and lending new capital again.
I recognize that taking these kinds of radical actions sounds to many observers like I am proposing that taxpayers should get stuck with the bill for the mistakes of these US automakers and the lending excesses of financial executives around the globe. Indeed, in a worse case scenario, taxpayers may end up footing a large part of the bill. But history tells me that if the automaker loans and the disposal of toxic bank assets are handled in a judicious manner, then there is a very good chance that taxpayers won’t be stuck with much if any of a tab, and might even profit from these so-called “government bailouts”.
As regards the loans for Chrysler and GM, the very same issues; that such help rewards failure and could cost taxpayers a lot of money, were debated 30 years ago prior to the US Congress approving the first such government loan for Chrysler. The US was also in the midst of a severe economic downturn and the bankruptcy, of what was then America’s 10th largest manufacturer was considered unthinkable to many US citizens. In fact, in most respects, the current situation involving GM, and to a lesser extent, Chrysler, mirrors that which existed in 1979. So what was the end result of that government loan?
First Chrysler proceeded to develop and produce its first front wheel drive small cars, which in turn helped Chrysler double its automobile line-up’s corporate average miles-per-gallon of petrol. Then Chrysler paid off the US taxpayer guaranteed loans in 1983, resulting in a net profit for US taxpayers of over $350 million. Excuse me, but I happen to think a $350 million profit on a 4 year, $1.5 billion loan sounds pretty good.
Having said this, while I am supportive of giving GM more government loans, I’m not so sure US taxpayers should also do so in the case of Chrysler. That is because unlike GM, Chrysler is no longer a publicly held stock company like it was back in 1979. Cerebus Capital Management LP, a huge private equity fund owned by a large group of well heeled private investors, bought Chrysler from DaimlerChrysler 18 months ago. It actually acquired Chrysler’s automaking operations free of debt, so it could get its hands on Chrysler’s lucrative auto finance subsidiary, Chrysler Financial Corporation.
Cerebus wanted to combine Chrysler’s much smaller finance operation, with the GM finance subsidiary, General Motors Acceptance Corporation, that Cerebus had bought a controlling stake of 51% in from GM a year earlier. Of course back in 2006 and 2007 when Cerebus made these acquisitions, the US and world economies were growing quickly and money to finance risky acquisitions was easy to get. But Cerebus Chairman and CEO John Snow, President Bush’s former Treasury Secretary, and Cerebus Capital’s wealthy private investors also knew there were risks associated with such acquisitions. As such, I don’t think it’s fair to provide more government loans to help Cerebus unless Cerebus Capital’s investors decide to invest more of their own money in Chrysler as well.
The US government also has some even more recent experience dealing with the toxic assets of America’s financial institutions. The Resolution Trust Corporation (RTC) was a US Government-owned asset management company created by Congress in 1989 to deal with the savings and loan crisis of the 1980s. It was charged with liquidating the assets of savings and loan associations (S&Ls) declared insolvent by the Office of Thrift Supervision, mainly real estate and mortgage loans. The RTC also took over the deposit insurance duties of the Federal Home Loan Bank Board. So what kind of job did it do?
Congress initially gave the RTC $50 billion to clean up the S&L mess, but the RTC wound up needing three additional infusions of taxpayer funds over six years because the situation proved to be much worse than Congress originally thought. In the end, according to one study, taxpayers took a $124 billion loss on the RTC’s total assets of $394 billion. That means taxpayers lost 31 cents on each dollar of assets handled by the RTC, an institution that was simply disposing of the property of failed institutions.
So using this recent US government toxic asset disposal history as a guide, if the US government has to end up taking over a total of $3 trillion in toxic bank assets, then a more realistic worst case scenario is that the ultimate cost to tax payers will be at most $1 trillion or about $150 billion a year over the next 6 years. I also think the same calculus could be applied to toxic bank assets in Ireland, the UK and the rest of the world. But just as there was a silver lining to those US government loans to Chrysler back in 1980, I also think it’s possible that taxpayers in the US and other nations could actually end up seeing a profit from a judicious acquisition and subsequent disposal of these “toxic assets”.
While government officials will have to spend a lot of money to show the market that they won't let their banks fail, taxpayers won't have to end up on the hook for the entire amount of money that's being injected into these banks. Governments could get warrants when they acquire toxic assets that would convert to bank stock when the government sells them, and hire private equity managers to oversee the assets to ensure that they’re sold only when the time is right.
I think these kinds of arrangements will allow governments to extract some gains for taxpayers once the recession ends so that taxpayers can actually profit from the financial bailout.

President Obama's Economic Stimulus package

Republican Politics, American Style
Published on February 19th in Metro Éireann By Charles Laffiteau
I closed last week’s column, about how President Obama has performed during his first weeks in office; by saying I would discuss President Obama’s economic stimulus measures in detail in this week’s column. But as you read this I will be winging my way across the Atlantic Ocean back home to Ireland from a conference in New York City, so some of what I discuss here may have already been rendered obsolete based on whatever actions the US Congress has or hasn’t taken on this very important piece of legislation.
With that caveat I will now discuss what I believe will be the likely outcome of the US Senate debate about the cost of the economic stimulus package, as well as what I believe the US government (and other countries and their governments) will eventually have to do to bring the world economy back from depths it has so quickly sunk to. As a lifelong fiscal conservative I must confess to being aghast at the almost one trillion dollar price tag of the stimulus package. But I’m also aware that the world is confronting the worst economic crisis since the Great Depression of the 1930’s, so extraordinary measures seem to be appropriate under the circumstances.
I am pleased to see Republicans arguing against some of the new federal spending programs that will continue long after the current economic crisis is over. But I must also note that many of these so-called fiscal conservatives’ voices were no where to be heard while former President Bush was running up half a trillion dollar annual budget deficits to finance his spending programs and the Iraq war. Since America wasn’t confronting such an enormous financial crisis during those years, Republican opposition to Obama’s deficit spending plans strikes me as being a bit like “the kettle calling the pot black.”
I am particularly disappointed in Senator John McCain, who has made absolutely no effort to try to forge the kind of compromises he has in the past with Democrats on economic and other issues. Having been soundly defeated by Obama in his bid for the Presidency, it appears John now wants to upstage President Obama and thereby salvage what’s left of his political reputation among his fellow Republicans in the process. John and other Republicans, who seem to have suddenly found their fiscal conservative voices now that they are out of power, are also playing a very dangerous game here.
But fortunately for America and the rest of the world, I don’t believe that McCain and his other so-called fiscally conservative Republican allies will win this particular dust-up with President Obama and the Senate’s Democrats. There are a few much more statesmen like Republicans in the Senate who have decided that now is not the time to be playing these kinds of dangerous political games. This group includes veteran Republican Senators like Arlen Specter of Pennsylvania and George V. Voinovich from economically depressed Ohio, as well as the three female Republican Senators, Lisa Murkowski from Alaska and the two Senators from Maine, Olympia Snow and Susan Collins.
These five Republicans have been working behind closed doors with some moderate Democrats like Ben Nelson of Nebraska, Evan Bayh of Indiana and Colorado’s newly elected Senator Mark Udall, to trim or eliminate some of the new spending programs from the stimulus bill in order to ensure its eventual passage this month. This alliance of moderate Senate Democrats and Republicans is reminiscent of the so-called Gang of 14 Senators, who banded together four years ago to halt attempts by the then Republican controlled Senate to ram Bush’s judicial appointments through the Senate.
Make no mistake, there are many very worthwhile spending programs included in the Congressional Democrats economic stimulus package which have been endorsed and supported by President Obama. But now is not the time and this legislation is not the place to provide additional funding for the Head Start program, prisons, education for the disadvantaged, school improvements, child nutrition and violence against women.
President Obama has wisely avoided getting involved in the negotiations being conducted by Senate moderates about what specific programs should be cut from the stimulus bill. He has instead focused on the urgent need for a substantial package of tax cuts and infrastructure spending to address America’s economic crisis. To that end, President Obama has repeatedly urged members of Congress from both parties to rise above partisan politics and work together on the specifics so that he can sign the new bill into law immediately after it has been approved by both houses of Congress.
While I support most elements of the economic stimulus package and believe that it will be passed and signed into law before the end of February, I don’t think this and similar economic stimulus measures by other countries will resolve the current economic crisis in America or anywhere else in the world. Nor am I alone in my opinions about what additional steps the US and other governments will eventually have to take to get their economies moving again. Some respected economists as well as members of Obama’s economic team have also come to similar conclusions.
The world’s banks won’t be ready or able to start lending money again until the US and other governments’ take ownership of their banks “bad assets” to get them off these banks’ books. Once this has been done, these newly “washed” banks can raise private capital which they’ll be eager to lend to credit worthy businesses and consumers.
Mind you, these “bad assets” our governments will then be stuck with are not actually worthless. But unwinding these “securities”, which are actually packages of debt containing both good and bad mortgage or consumer loans, to figure out which elements have value and which ones don’t will be a long and time consuming process. But the world’s economy is dependent on banks and private investors who can’t afford to wait and find out what these securities are worth. Therefore, our governments must do so.

How is Obama doing so far

Republican Politics, American Style
Published on February 12th in Metro Éireann By Charles Laffiteau
I am heading back to the states tomorrow to present a paper at an international conference in New York and to take the pulse of citizens in my homeland regarding President Obama’s performance in office less than one month into his first term. So today I want to discuss what I think of President Obama’s first three weeks in office.
As I mentioned in previous columns I generally applaud the kind of people President Obama has selected to run the US government and various federal agencies and indeed the Congress has moved swiftly to approve the nominations of the vast majority of President Obama’s Cabinet nominees. But that isn’t to say President Obama hasn’t stumbled in a few cases, most notably with the nomination of Tom Daschle as both Secretary of Health and Human Services and White House Health Insurance Czar.
Given his legislative and lobbying experience on healthcare insurance issues and close personal relationship with President Obama, Tom Daschle was and, I believe, still is the best person for these critical positions in President Obama’s new administration. Unfortunately, Tom Daschle made a crucial error as regards paying his personal income taxes and the decision to withdraw his nomination for both posts in President Obama’s administration is the price Daschle and Obama now have to pay for this transgression.
Regardless of the whether or not one believes that Tom Daschle knew or should have know that having a gratis driver and limousine (courtesy of Washington DC insider and corporate media mogul Leo Hindery) at his disposal for the past three years had income tax consequences, that was not his biggest mistake. What sunk Tom Daschle’s chance to play a significant role in the President Obama’s new administration was his decision to wait until January of this year, just days before his Senate confirmation hearings, to write a check for the back taxes he owed. There is no excuse for this delay.
Even if one buys Daschle and President Obama’s contention that failing to declare the driver and limo perk as taxable income was an innocent mistake, the fact of the matter is Daschle knew he owed income taxes for this “oversight” over six months ago and yet waited until he was about to be grilled about this matter by members of the US Senate to pay up. This action alone calls into question whether or not Tom Daschle was acting in accordance with the “spirit” of President Obama’s administration’s new ethical standards.
As President Obama himself later acknowledged, there cannot be two sets of ethical standards for people who work in President Obama’s administration, one for those who have been his closest advisors and friends and another for those outside his inner circle. While President Obama should have recognized the ethical lapse and never nominated Daschle, it was still refreshing to see President Obama “fess up” and admit he had made a mistake trying to get Tom Daschle approved as a member of his Cabinet. President Obama’s admission stands in marked contrast to former President Bush, who could never admit that any of his administration’s personnel choices had been faulty.
But President Obama’s nomination of moderate Republican Senator Judd Gregg as his Commerce Secretary to replace his first choice, Democratic Governor Bill Richardson, demonstrated President Obama’s considerable political savvy in two ways. It underscored President Obama’s commitment to run the US government in a bipartisan manner by adding a third Republican and a fiscal conservative to his Cabinet, while also creating an opportunity for the Democratic Party to capture another open Senate seat in 2 years. Although another Republican, Gregg’s former Chief of Staff, Bonnie Newman, has been appointed to fill Gregg’s seat for the next 2 years, she will not be running for re-election in 2010, thus making it much easier for a Democrat to take over this Senate seat.
I also applaud many of the executive decisions and actions taken by President Obama during his first days as America’s Chief Executive. Following through on his campaign promises, President Obama signed a succession of executive orders which among other things, closed Guantanamo Bay as a terrorist detention facility and ended the separate but not equal justice system the Bush administration had tried to use to try terror suspects. President Obama also ordered his generals to develop a plan to withdraw American troops from Iraq within 16 months and a plan to deal with a resurgent Taliban insurrection and stabilize the deteriorating security situation in Afghanistan.
President Obama also chose to make his first televised international media interview with a Muslim TV network and dispatched former Senator George Mitchell, who helped settle the conflict in Northern Ireland 10 years ago, to the Middle East to put a renewed focus on settling the Arab-Israeli conflict. Obama also reversed Bush directives that stopped the flow of US aid to NGOs that provided abortion assistance.
Closer to home, President Obama moved quickly to mandate an end to the use of questionable interrogation techniques by the CIA, opened federal coffers to provide more money for stem cell research and signed a bill to increase the number of uninsured children covered by a special SCHIP health insurance program.
President Obama also began a concerted push for a very large economic stimulus program that he hopes to sign into law the same day I arrive back in the states. Most Republicans say this 800 billion dollar package of tax cuts and infrastructure spending is too large and decry the effect it will have on America’s already huge budget deficit.
But I can’t help but wonder where these same fiscally conservative Republicans were, when George Bush was President and he sent Congress a variety of bills an increases in Defense spending that doubled the size of that deficit in only six short years. My fellow Republicans appear to have very short memories and are obviously hoping American voters do as well. But I will discuss President Obama’s economic stimulus measures in detail in next week’s column.

My Indian Travelogue Comes to a Close

Republican Politics, American Style
Published on February 12th in Metro Éireann By Charles Laffiteau
Today I want to bring my India travelogue to a close by discussing some of the people I met and the other sights I saw during my Indian sojourn.
While I was leaving the Gandhi Museum to return to my hotel, an obviously poor and homeless young girl of maybe 13 years approached my car begging for money. She was dragging a very deformed foot around on crutches and looked like she hadn’t had a bath in at least a week. The sight of this pitiful young waif was more than I could bear, so I reached into my pocket and gave her 10 rupees, about 15 euro cents.
The look of absolute joy and gratitude on her face when I dropped the coins into the dirty little palm of her hand was indescribable and judging by her reaction you would have thought I had just given her a million Euros. I then responded by taking her picture but as soon as she saw the camera she became even more animated; smiling and waving at me while she thanked me again and again, until my car slowly pulled away into traffic. I didn’t really need a photo of this young girl however, because as I write this, I can still see her smiling face pressed against my car window.
The next day I went to see Akshardham, a Hindu temple which was as modern a tourist attraction as the others I saw in India were ancient. But unlike the older and much more historic holy places India is famous for, visitors to the Akshardham temple must check their purses, phones, camera’s and other valuables before they are even allowed to enter the temple’s grounds, in part to ensure that no photos are taken while you are inside.
Inside one finds beautifully manicured gardens dedicated to famous Hindu’s important to Indian history, exhibitions which explain the Swaminaran faith and Hindu teachings along with gold and marble statues of various Hindu deities. For a fee of 50 to 100 rupees (75-150 Euro cents) there is an indoor boat ride, a huge new IMAX theatre showing a movie about Lord Swaminarayan and a sound and light show which depicts the Hindu vision of the beginning and the end of the world. But compared to all the other places I saw in India, Akshardham did strike me as a bit over the top.
A few days later, while I was being driven back to my hotel from Jawaharlal Nehru University, I had another memorable encounter with the poorest of India’s poor; a rather sad looking little 5 year old boy dressed in rags and caring for his year old baby brother. But when I stopped to take his picture, he stood up smiling and waved happily at me as if he didn’t have a care in the world. When I gave him 10 rupees though, he let out a whoop as if he had hit the jackpot and the two of them began following my rickshaw as we moved along with the flow of the traffic.
Once again I didn’t really need a picture of him and his little brother to preserve the memory though, because it is still as fresh in my mind now as it was right after I lost sight them in Delhi’s traffic congestion. I am still amazed at how genuinely happy India’s poorest people and children appear to be. Indeed money can’t buy that kind of happiness.
The following weekend I visited India Gate and the beautiful government buidings that house India’s parliament and the prime minister’s offices, an area of New Delhi curiously devoid of the squalor one sees everywhere else in the city. The next day I spent walking the grounds surrounding Qutb Minar, one of the largest minarets in the world. This minaret used to be a part of one of the largest Mosques in the world, Quwwat al Islam Mosque (The Power of Islam Mosque) which now lies in ruins.
Ironically, the mosque was originally built using the ruins of older temples built for the Hindu and Jain religious faiths, so what remains today is an diverse mix of India’s Hindu and Muslim architecture. The site also holds the graves of some of India’s ancient rulers and a huge, pure iron pillar, which never rusts, that was taken from a Hindu temple.
Then on my last weekend in New Delhi, I took an overnight trip to Agra to tour one of the Seven Wonders of the World; the famous Muslim shrine to a man’s love for his wife, the Taj Mahal. To help protect the beauty of this white marble masterpiece from pollution, petrol burning cars and trucks are banned from the area surrounding this marble palace, which upon closer inspection, is actually white marble with calligraphy panels made of inlaid jasper. Inside the Mausoleum is the tomb of Mughal Emperor Shah Jahan’s favorite wife, Mumtaz Mahal, surrounded by beautiful and intricate geometric designs made up of inlaid lapis and other semi-precious stones.
The entire Taj Mahal complex is actually a series of towers and buildings that are surrounded by and connected to beautifully designed and well maintained gardens. It would be safe to say it would cost trillions of Euros to build a complex like this today.
When I was leaving Agra to return to Delhi and my flight home to Ireland, I had one more memorable encounter with a native Indian woman carrying a months old baby. She was begging for money and I once again parted with 10 rupees. And just like the children I gave 10 rupees to she was overjoyed and oh so thankful while I took her photo.
Today I am a much richer person because of what I experienced in India. I believe that India’s real jewel isn’t the Taj Mahal, its India’s people. The vast majority of Indians may be extremely poor in terms of material possessions but they are incredibly rich in character and spirit.

A Witness to President Obama's Inauguration

Republican Politics, American Style
Published on January 29th in Metro Éireann by Charles Laffiteau
I hope you have been enjoying my columns about my recent trip to India, but in my next two columns I am going to take a brief detour from recounting my Indian “adventure” to discuss my most recent trip back to the states last week for Barack Obama’s historic inauguration as America’s 44th President.
Having already been a witness to history when President Obama was officially nominated as the Democratic Party’s candidate for President, I was extremely grateful for the opportunity to once again be a witness to history. But I must confess that I was also wondering how the experience of seeing President Obama take the reins of power in Washington DC on 20 January could possibly equal what I had experienced less than 5 months earlier on 28 August in Denver Colorado. Boy oh boy, was I ever wrong.
Hmmm….Lets just say that I made the mistake of underestimating the power of being one of 2 million witnesses to history as opposed to being one in a crowd of only 85-90,000 people. In my defense, I had truly been awestruck in Denver looking up from my vantage point on the floor of the Democratic convention at the thousands of people jammed into every corner and seat at Mile High Stadium. This was also the largest crowd to have ever heard a US Presidential candidate deliver a nomination acceptance speech.
I had also never before been to a Presidential inauguration or a political gathering of any kind numbering more than a few hundred thousand people. Of course the only other Presidential inauguration I have ever been invited to was President Reagan’s first inauguration in 1981, which drew a crowd of only half a million people. Well if you think the sight of 500,000 spectators is awe inspiring, how does one even begin to describe what it’s like to turn around from your spot on Capitol Hill and look behind you at a crowd estimated to be almost 2 million strong? I’m sorry, but even now, days later, I still can’t come up with the words to adequately describe the sight and the feelings it evoked.
However, much like my trip to India, my journey to President Obama’s presidential inauguration had more than a few moments of tension prior to my arrival on the lawn of the US Capitol building. In fact, with less than an hour to go before President Obama took his oath of office, I was still standing in a packed queue of several thousand people at one of the four entry gates for those lucky enough to have tickets. But that was only the last of my moments of anxiety which had actually begun several hours earlier.
I had departed my friend’s home in Arlington Virginia some three hours earlier, at 8am, so that I could catch the Metro subway train for the fifteen minute trip into the city to a stop less than a half hour walk from the entry gate for US Capitol grounds ticket holders. I had been told that these entry gates would open at 9am so I figured I had allowed myself plenty of time to get there and grab a good viewing spot. Unfortunately I had also not accounted for the fact that the trains into the city would be so jammed with passengers who had gotten on at earlier stops, that there would be no room left for passengers to get on where I was at the Metro stop in Pentagon City.
But having some experience riding the rails, I also knew that if the trains coming into Pentagon City were already full at 8am, then this would remain the case for at least the next couple of hours. So I decided to jump out of the queue for the train to the city in favor of a seat on the virtually empty train heading the other way out of the city. I knew that while this detour would cost me some precious minutes, I would also be guaranteed a spot on the train when it turned around and started back into the city.
But when the outbound train stopped at Reagan International Airport I took a chance and hopped off and waited for the next inbound train, thinking maybe I could save a bit of time this way. As it turned out I was lucky enough to just squeeze onto the next train into DC and arrived at my original planned destination just before 9am. But those people I left behind at Pentagon City didn’t even get on a train until about 10:30am, so I was very glad I decided “to go south in order to go north.” After I got off at Metro’s Chinatown stop, I walked another 10 blocks to the entry point for my gate, only to find a large queue of ticket holders waiting to be let through to the entry gate on the next street.
Since this crowd wasn’t moving I fell in behind an ambulance which was slowly moving through the crowd towards my ultimate destination, the US Capitol. When the ambulance reached an open area at the next intersection past the throng I had been caught in, I turned to my right and walked into another queue of several thousand only this one was right in front of my entry gate. I looked at my watch and it was 9:45am so I figured now I was sure to get in. To my chagrin however, I remained in this queue for the next hour and a half, pressed so tightly by people on all sides that it was impossible to fall down or move in any direction other than forward towards the entry gate.
But my tension evaporated at 11:15am when they finally allowed me to go through the gate and the omnipresent metal detectors. I literally ran to a spot between two portable loos just behind the people who were seated on the Capitol lawn and wedged myself into the small opening between them. Granted this wasn’t the best smelling spot on the Capitol grounds but it gave me an unobstructed view of President Obama’s entire inauguration ceremony.
I count myself as very lucky to have made it to my viewing spot “between the loos” for several reasons. After the inauguration was over I talked with two ladies who had the same kind of tickets I had at an Italian restaurant where I had lunch. They told me they had remained in the same queue I had bypassed by following the ambulance, and as a result missed the entire inauguration because they never even made it to the entry gate.
Then when I was on the Metro returning to Arlington, I talked with a couple that had silver tickets for the viewing area next to the Capitol’s reflecting pool. They had arrived at 6am and because they had arrived so early, they were in a huge queue that was directed into the Third Street tunnel to wait until the entry gates opened. In this case the early bird didn’t catch the worm however, because no one came to get them until it was too late to clear security and get to their ticketed spots next to the reflecting pool. After listening to them I was actually grateful I had arrived later than I originally planned.
Fortunately for me, my only moment of disappointment on this historic day came shortly after I got to my viewing spot on the Capitol lawn. As President Bush and his wife Laura were introduced shortly before 11:30am, many in the crowd around me booed lustily. Mind you, while I have been one of the Bush administration’s harshest critics over the last 6 years, I thought this public display of disrespect towards the outgoing President and his wife was both uncalled for and in poor taste.
But the sour mood among some of my fellow spectators in the crowd quickly evaporated when President Obama, his wife Michelle and his family were introduced to a rousing cheer as they joined President Bush and former US Presidents Clinton, H. W. Bush and Carter on the Inaugural Platform. It was at this point that I turned around and for the first time looked down at the 2 million people standing behind me. This vast crowd stretched as far as my eyes could see down the National Mall, past the Washington monument and all the way to the Lincoln Memorial some 2 miles (3 kilometers) away. The sight of this gave me goose bumps and a warm feeling about what the future holds.
In the spirit of a new era of bipartisan politics, President Obama picked a prominent social conservative minister, Rick Warren, to deliver the Inaugural invocation, a choice that infuriated many progressive Democrats. This sentiment was underscored when I, in fact, heard a very distinct murmur of dissatisfaction rippling through the crowd around me when Rick Warren was first introduced. But Warren’s invocation was actually quite soothing and nonpartisan for the most part.
While I thought it was a mistake that Warren chose to lead the crowd in saying the “Lords Prayer” (which is so particularly Christian) at the end of his invocation, I guess I shouldn’t have been since he is, after all, an evangelical Christian minister. But except for this gaffe, I thought Warren’s invocation was appropriately focused on the need for national unity. One of the most memorable lines I remember him saying was; “Help us, oh God, to remember that we are Americans, united not by race or religion or blood but to our commitment to freedom and justice for all. When we fail to treat our fellow human beings and all the Earth with the respect that they deserve, forgive us.”
Chief Justice John Roberts then proceeded to screw up administering the oath of office such that he, and now President Obama, repeated it in a private ceremony a day later in order to ensure the constitutionality of the swearing in process. But President Obama was unflustered by this mistake, delivering his 18 minute inaugural address without so much as a single hitch.
But President Obama’s inaugural address wasn’t as lofty and inspirational as many in the crowd expected given the President’s reputation as a skillful orator and speech writer. I would characterize it as a very sober and serious speech and yet, one that still included a large measure of determination and hope regarding America’s future. Although President Obama used it to repudiate many of the policies of President Bush, he was also very careful and made sure that he never personally attacked him in the process.
I think the following quotes from President Obama’s speech neatly summarize the sober and yet hopeful tenor of his inaugural address; “Today I say to you that the challenges we face are real. They are serious, and they are many. They will not be met easily or in a short span of time. But know this, America: They will be met.” He also acknowledged those who doubt that we can overcome these challenges saying that; “There are some who question the scale of our ambitions, who suggest that our system cannot tolerate too many big plans. Their memories are short, for they have forgotten what this country has already done, what free men and women can achieve when imagination is joined to common purpose and necessity to courage.”
President Obama also acknowledged that the rest of the world was hopefully watching and looking to America to lead it through the current economic crisis as well as to help resolve some of the world’s numerous ethnic and religious conflicts when he said; “We are ready to lead again.” He repudiated the Bush administration’s use of torture and its curtailment of civil liberties by saying that this was a “false choice between our safety and our ideals” but also warned the enemies of the United States that; “Our spirit is stronger and cannot be broken. You cannot outlast us, and we will defeat you.”
The inauguration ceremony ended with a wonderful (and somewhat humorous) benediction delivered by the Reverend Joseph Lowery, a civil rights veteran and colleague of Dr. Martin Luther King. He acknowledged America’s racial divisions and the need for a continuation of progress in addressing them, saying; “We ask you to help us work for that day when black will not be asked to get back, when brown can stick around (crowd laughs) when yellow will be mellow (crowd laughs harder), when the red man can get ahead man (still more laughter) and when white will embrace what is right.” What can you say to this closing line from Rev. Lowery on a most remarkable day but, “Amen”.

The Indian Adventure Continues

Republican Politics, American Style
Published on February 5th in Metro Éireann By Charles Laffiteau
While there are any number of reasons why you should not rent and or drive a vehicle in New Delhi, or India for that matter, the best one is for your own safety. Sure they drive on the left just like folks in Ireland and the UK do, but that is where the similarities both begin and end.
Try navigating a toll road, designed like the motorways here in Ireland, but also sharing the driving lanes with carts pulled by bicycles, camels, donkeys, oxen and the occasional human animal. There are also the farm tractors, pedestrians and omnipresent rickshaws that use the same road lanes that one also has to be on the lookout for. Plus, even though motorcycles, cars and trucks are supposed to travel in the left hand lane unless they are overtaking slower moving traffic, the reality is that virtually all of them drive in the middle of the road straddling both lanes
Now, unlike Ireland, the big heavy trucks which carry goods between cities and to stores and factories are not allowed to use many of India’s motorways between 7am and 7pm in order to ease traffic congestion. But when they are on the road these big trucks TAKE the right of way, regardless of whether or not they are legally entitled to it. The rule is, the bigger the truck, the more right of way its driver believes he is entitled to.
Another curious feature of India’s divided highways is the fact that trucks can enter them and travel in the opposite direction of traffic for distances of several miles until they reach a break in the median strip where they can cross over onto the other side and the proper traffic flow lanes. Imagine my surprise when the car I was in had to shift to the left from the inside right hand speed lane on the highway from Delhi to Agra because a huge truck was barreling down the road straight at us in that same lane.
Automobile and truck horns constantly assault one’s hearing when you are on the road because India’s drivers not only don’t pay little attention to what is beside or behind them, but also because they do not use their indicators or yield the right of way, and they frequently change lanes without signaling. Furthermore, Indian drivers also frequently pass on blind corners, up steep hills or in the face of oncoming traffic and many of them either don’t use their headlights or turn on their high beams when they encounter on coming traffic, blinding the other driver. Small wonder India has 131.2 fatalities per 10,000 motor vehicles compared to only 1.4 for the UK and 1.8 for Ireland.
However, assuming that one is smart enough to hire a driver to take you to see the many wonderful sights that there are in India, you will be truly amazed by many of them. I stayed close to New Delhi for my first two weeks and still didn’t see everything that there was to see in the Capital of India, but I probably could have had it not been for many hours I spent in the United Nations workshop that was the primary purpose for my trip. Having said that, it was also the native Indians who took part in that workshop who served as my guides to what sights I should and eventually did see during my stay.
My first weekend was spent visiting the National Gandhi Museum and the Memorial of Mahatma Gandhi at Rajghat on the bank of the Yamuna River in New Delhi. At the memorial site known as Rajghat Samadhi, there is an eternal flame burning at the spot where Mahatma Gandhi’s mortal body was consigned to flames at his funeral.
The memorial itself is striking for both its beauty and its simplicity, which would also be in keeping with Gandhi’s ideal of simplicity. It consists of the brick platform on which Gandhi’s body had been laid, and a black marble platform of the same size and dimensions which are surrounded by a white marble fence and several acres of beautifully landscaped grounds. Visitors must remove their shoes (10 rupees to check them at stand near the entrance) so the stone walkways will give you a “hot foot” but fortunately there is plenty of “cool” grass to walk on nearby as well.
The National Gandhi Museum is within easy walking distance from Rajghat and is filled with photographs, paintings and sculptures of Mahatma Gandhi as well as a full scale replica of his bedroom and “office”. The museum also has numerous other artifacts including “Official” documents and plaques which were given to Gandhi by leaders from other countries and organizations around the world in recognition of Gandhi’s contributions to India’s history, democracy, non-violence and world peace.
I must say, however, that I am still mystified as regards why Gandhi was never awarded the Nobel Peace Prize. This seems to me to be a striking omission by the Nobel Peace Prize Committee, but one that I hope they will someday choose to correct even if it’s a posthumous award.
In addition to the numerous historical artifacts which surround visitors when they are inside the museum, there are also some very interesting displays outside as well. At the entrance is a large rock carving depicting Gandhi’s “Great Salt March”, a non-violent protest against a salt tax which shook the British Empire and led to world wide recognition of the legitimacy of India’s claims for independence.
Next door to the museum is a full scale replica of Hridayakunj, the residence of Mahatma Gandhi and Kasturba, the beloved wife of Gandhi who died in his arms while they were both still imprisoned by the British. The residence is surrounded by beautiful gardens including the wonderful gazebo where I had my picture taken under the hands of a huge sculpture of a seated Gandhi. Next week I will discuss my visit to Qutab Minar and the Akshardham temple.

My Indian Adventure

Republican Politics, American Style
Published on January 15th in Metro Éireann By Charles Laffiteau

I closed last week’s column by noting that I arrived in New Delhi refreshed and eager to begin my Indian adventure thanks to a fortuitous free upgrade to a “bed” seat in the First Class section of my Qatar Airways flight from Doha to New Delhi
By the time I retrieved my bags and cleared Indian customs it was almost 5am, so I took the first of my two “conventional” taxi rides from the airport to my home away from home, the Hotel Empire, which is located in the Safdarjung Enclave not far from Jawaharlal Nehru University in southwestern New Delhi. It was a conventional taxi ride in that the taxi not only had a taxi sign, meter, doors and windows, but also air conditioning. For the balance of my stay in New Delhi the only other time I rode in a conventional taxi was on my return trip to Indira Gandhi International Airport three weeks later.
That was because I discovered these conventional taxis actually cost three to four times more per kilometer traveled than the ubiquitous door less, window less, green and yellow three wheel “rickshaws” that ply their trade throughout the city and the rest of the country. Now by way of comparison, the distance I traveled from the airport to the Hotel Empire is comparable to traveling from the Dublin Airport to the City Centre at a cost of only 400 Indian rupees or about 6 Euros. But covering the same distance in a rickshaw costs all of 100 rupees, approximately one and a half Euros.
Another interesting characteristic of both public and private transportation in New Delhi is the type of fuel they use. While the conventional petrol and diesel we use to fuel our cars and trucks here in Ireland is also used by many vehicles in New Delhi, compressed natural gas (CNG) is mandated for the public transport system of India’s capital. In fact the Dublin Bus equivalent, the Delhi Transport Corporation (DTC), actually operates the world's largest fleet of CNG powered buses.
But what I also noticed was that most of the rickshaws as well as many personal vehicles in New Delhi have also been converted to CNG. The cost of converting a gasoline vehicle to burn CNG runs about 600 to 700 Euros, but the fuel savings are immense since CNG only costs 19 Rupees or .29 Euros per kg compared with 56 Rupees or .86 Euros per liter for petrol. CNG is also much more environmentally friendly because using it instead of petrol and biofuels also drastically reduces CO2 carbon emissions without impacting the world’s food supply and pushing up food prices.
But while New Delhi appears to be ahead of many other cities in the US and Europe when it comes to addressing the problems associated with vehicular CO2 carbon emissions, it still has a long way to go as regards the condition of its road, bridge and mass transit infrastructure. If you think Ireland has problems with bumpy roads, mind-numbing traffic congestion and spotty rail service then just wait till you visit India. The main roads and paved side streets are uniformly bad with uneven surfaces, large cracks and numerous pot holes, some big enough to swallow a small child.
Some of the wider thoroughfares actually have painted stripes on the pavement to separate the lanes of traffic, but I view this as a waste of time and money since absolutely no one pays any attention to them. For instance, the main road in front of my hotel had three such traffic lanes, but as my photos taken from the front of a rickshaw show, drivers jam their vehicles five or six abreast into this 3 lane road space. The so called rush hour from 7 to 9am and 5 to 7pm when traffic is supposedly at its worst during the work week, is a bit of a misnomer since it actually starts around 6am and doesn’t let up till after 10pm. The only difference I could see between “normal” traffic and rush hour traffic was that traffic on the side streets moved a bit faster between 10am and 4pm and after 8pm.
Unlike Dublin bus passengers, New Delhi bus riders actually have different types of buses and fare levels to choose from. The cheapest fares are offered on older buses where passengers often ride on the roof or hang onto the sides and which appear to be held together by nothing more than string and baling wire. A higher fare will get you a spot to stand inside a newer and slightly less crowded bus while the newest and most expensive buses yield its passengers a seat or a place to stand in air conditioned comfort. Both DTC and privately owned and operated buses have color coded stripes on them which tell passengers the fare, which runs between two and ten Rupees (.03 to .15 Euros). By the way if you happen to be walking on a street and see one coming, be careful. The drivers not only drive very fast but they also have a tendency to run over pedestrians too.
New Delhi has a decent suburban rail system and an overcrowded Metro rapid transit system with a combination of elevated, at-grade and underground lines. But believe it or not, most of the Metro and railway stops are nowhere near any bus stops. I should also note that while I was in New Delhi, a partially built bridge designed as part of the Metro’s expansion collapsed, sending concrete and steel beams crashing down on several vehicles in a crowded neighborhood, killing 4 people and injuring another 20.
So while getting around New Delhi is relatively cheap by Irish standards, there is also a certain amount of risk involved. But whatever the drawbacks of public transportation are, they pale in comparison to taking your life into your own hands by renting or driving an automobile. I’ll discuss this and the sights of New Delhi next week.