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SYNDICATED COLUMN: New Year’s Revolutions?

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Ted Rall

There’s Plenty of Money Around. Let’s Take It.

What’s the difference between you and a corpse? You both contain the same organs, the same fluids–all the same stuff. Inside you, stuff moves around. That’s the difference between life and death.

What’s the difference between economic boom and bust? Again: movement. The United States of America is just as rich today as it was a year or, for that matter, ten years ago. It still possesses the same rich natural resources, the same enviable geography, and the same productive, innovative and energetic workforce. Our country still has enormous intrinsic value. But money, the lifeblood of any economy, has stopped moving around.

Wealth is still here. But the economy has flat-lined.

We know what caused the problem–the double bursting of the dot-com and housing bubbles, coupled with government regulators who took the last three decades off from work and financial analysts who said the old rules no longer applied. (The old rules always apply.) The underlying meta causes of the Crash of ’08 were an unholy trinity of stagnating wages, easy credit and brilliantly executed consumer propaganda that convinced people they were lame unless they bought all the latest stuff. But that’s a discussion for another time. This week, let’s think about how to escape the deflationary spiral that will reduce the world’s richest nation to penury unless something is done soon.

The Fed, having reduced interest rates to zero, is out of ammo. Banks are using the $700 billion bailout to buy each other up, enriching only themselves and a few hundred investment bankers. (In all fairness, Treasury Secretary Henry Paulson told them to do just that.)

President-Elect Obama’s plan blends George W. Bush and FDR’s greatest hits: a symbolic Bush-style tax cut of $500 per person ($1,000 per couple) and a $850 billion infrastructure construction bonanza reminiscent of the WPA projects of the 1930s. Obama’s tax cut won’t stimulate the economy; they never do. Due to the “multiplier effect,” Obama’s economists predict that his public works projects will create 3.2 million new jobs by the first quarter of 2011. “Peter Morici, economist at the University of Maryland, projects that $100 spent on a bridge or school boosts economic activity by about $200,” reports the Associated Press. (That doesn’t count the benefit of improving Americans’ longer-term productivity. For instance, better roads could reduce commuting times or help get goods to customers more efficiently.)”

A public works program is a good idea. But Obama’s plan won’t be enough to put a dent in the skyrocketing unemployment rate. 3.2 million jobs would be barely enough to replace six months worth of job losses at current rates. And most analysts think those rates will rise. With the federal budget continuing to sink $9 billion a month into the fiscal sinkhole of Iraq, there isn’t much cash to make the plan bigger.

“With negative or low economic growth projected well into the future, the economy needs a long-term fix,” says Stanford economist John Taylor, who worked in Bush’s Treasury Department. Definitely. But what?

Unless something big happens (like every pundit, I should predicate every prognostication with the acronym USH for “unless something happens”), the depression will deepen quickly. Our economy is two-thirds dependent on consumer spending, but consumers are stone cold broke. Decades of attacks on labor and free trade agreements caused wages to stagnate as inflation raged, so Americans have no savings to draw upon. Credit is no longer available as a back-up.

The American consumer has left the building.

Demand will keep shrinking, forcing companies to lay more people off, which will accelerate the shrinkage of their customer bases. Prices will drop to chase the few dollars left in the economy, triggering deflation. It’s already begun: Prices fell 1.7 percent in November (20 percent on an annualized basis). Debtors will try to pay off inflated credit card bills and mortgages with deflated money. They will fail. Misery will spread.

What happens next, I think, is that people will do what large numbers of people always do when they need money and food but can’t find a job. They will start to think about the rich, who still have all the wealth they accumulated while money was still circulating. And they will take it from them. It might be the easy way, through liberal-style income redistribution. Or it might be the hard way. Either way, it goes against the laws of nature to expect starving people to allow a few individuals to sit on vast aggregations of wealth.

When I was young, I assumed that revolutions resulted from ideology, because idealists wanted a fairer world. Now, as we stare down the barrel of economic apocalypse, I realize that they’re carried out by desperate people who have nothing to lose, in Marx’s words, and everything to gain. They take stuff from the rich and write the ideological tracts after the fact.

With the economic distress we’re likely to see in the coming year or two or three, revolution will become increasingly likely unless money starts coursing through the nation’s economic veins, and soon. Will it be a soft revolution of government-mandated wealth distribution through radical changes in the tax structure and the construction of a European-style safety net, as master reformer FDR presided over when he saved capitalism from itself? Or will the coming revolution be something harder and bloodier, like the socioeconomic collapse that destroyed Russia after the fall of the Soviet Union? To a great extent, what happens next will depend on how Barack Obama proceeds in his first weeks as president.

COPYRIGHT 2009 TED RALL

Israelly Dumb

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Ted Rall

Posted by Susan Stark

WE ARE NOT ALONE

We, Palestinians, are not alone
The best of humanity is on our side
Mighty truth… Gracious morality is on our side
Justice, dignity, human values, radiant hope are on our side

Soil, sand, and stones
Trees, poppies, lemon zest, and morning mist
Jerusalem sunshine and Jenin’s moonlight
Haifa’s Carmel and Jaffa’s shoreline
Are all on our side

We stand firm
As the stick of Moses
Splitting good and evil
Refusing to bow down

Our tragedy is a sieve
Filtering the wicked away

We all live a fleeting moment and soon die…
Better to die standing on our feet
Than to live crawling on our knees

Better to live with a wounded body
And a soul whole
Than to live and die
Inflated by arrogance
Bent by corruption
Twisted by greed
weighed down by oppression
Lusting after power
With a disfigured soul

Poem by Nahida

My Letter to Newsweek

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Ted Rall

To the Editor:

There’s a saying among political cartoonists: “I thought my cartoon was good. But then it appeared in Newsweek.”

Once again, your annual “The Year in Cartoons” collection of editorial cartoons highlights your magazine’s long-running war on political humor. Its title also violates truth-in-advertising laws. Your selection is incredibly narrow, focusing only editorial cartoons without a political point of view drawn by about a half dozen working editorial cartoonists. “The Year of the Blandest Cartoons By Six Guys” would be more like it.

Newsweek’s readers deserve to know that there are hundreds of editorial cartoonists in the United States. They have as many drawing styles and political viewpoints as you can imagine. The vast majority of them are hard-hitting, highly opinionated and viciously partisan. They are pit bulls (mostly without lipstick, though there are amazing women cartoonists too), not the teacup poodles exhibited in your misleadingly-titled round-up.

In a universe of inspired and inspiring political cartoons, you managed to find the absolute bottom of the barrel. Are you afraid of actual opinions? Or do you just have bad taste? Either way, you ignored all the good stuff—including by the cartoonists whose work you included, all of whom have far more important, riskier and funnier work in their 2008 portfolio that you chose to pass up. A computer-generated randomizer would have picked smarter cartoons.

Ted Rall
President, American Association of American Editorial Cartoonists

SYNDICATED COLUMN: Obama’s Weasel Words

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Ted Rall

On Iraq, Antiwar Candidate Delivers More Carnage

Obama won the Democratic nomination and the presidency by speaking out against the Iraq War. Now that he’s packing for Washington, however, the old Chicago lawyer is using Harvard Law weasel words to make sure the war goes on for years.
Germans are organized. The French are snotty. Americans have a national character trait, too: inattention. It’s now obvious that Obama exploited our hard-wired inability to read between the lines to lay the groundwork for what many of his supporters will soon view as a terrible betrayal.

Right there, in a July 14th op/ed, is Obama’s triumph of plausible deniability: “The differences on Iraq in this campaign are deep,” he wrote in The New York Times. “Unlike Senator John McCain, I opposed the war in Iraq before it began, and would end it as president.”

Seems clear. End means end. Finito. No more. But there’s an interesting phrase in Obama’s promises to pull out, repeated throughout the campaign”: “combat troops.” “We should seize this moment to begin the phased redeployment of combat troops that I have long advocated,” he wrote in his op/ed. “We can safely redeploy our combat brigades.”

“It’s time to end this war,” Obama concluded. Ending the war would mean following the political cartoonist Matt Bors’ prescription: The troops would go to the airport. They would board planes. They would fly away.

But Obama doesn’t want to end the war.

Obama will classify some units as “combat troops” and send them to Afghanistan, which he wants to expand into an even bigger war. But tens of thousands, maybe even hundreds of thousands of troops, will remain in Iraq, killing and getting killed.

“Even though the [U.S.] agreement with the Iraq government calls for all American combat troops to be out of the cities by the end of June [2009],” reported the Times on December 22nd, military planners are “now quietly acknowledging that many will stay behind as renamed ‘trainers’ and ‘advisers’ in what are effectively combat roles. In other words, they will still be engaged in combat, just called something else.”

Obama isn’t just recycling Clinton’s staff. He’s also into his aphorisms: It depends on what the meaning of “combat troop” is.

How many non-combat combat troops will still be shooting and bombing Iraqis after 2011? “My guess is that you’re looking at perhaps several tens of thousands of American troops,” says Defense Secretary Robert Gates, a Bush appointee who has been asked by Obama to stay on—presumably because he approves of the superb job the Bush Administration has done in Iraq. Obama’s military advisors, reports The Los Angeles Times, “have said that residual force could consist of as many as 50,000 troops.”

When Americans hear about military advisers helping to train foreign forces, they think of JFK, who sent a skeleton crew of 1,400 advisers to South Vietnam in 1961. (Let’s not dwell on how that turned out.)

50,000 troops—this being the Pentagon, you know it’ll be more—is a full-scale war. Indeed, when President George H.W. Bush invaded Panama and overthrew its government in 1989, he used 57,000 troops.

Of course, we should have seen this coming. Obama talked and talked and talked about his opposition to the Iraq War. He’s good at that. But whenever he had a chance to put his vote where his mouth was, he chumped out. Time after time, he voted for Bush’s requests to send billions of taxpayer dollars to Halliburton and other war profiteers. He never voted no.

“I have been very clear even as a candidate that, once we were in, that we were going to have some responsibility to make it work as best we could, and more importantly that our troops had the best resources they needed to get home safely,” Obama said during the campaign. “So I don’t think there is any contradiction there.” But the money isn’t provided to get our troops home safely. It’s to keep them in Iraq, fighting and killing and being killed. As Obama well knew.

With Detroit automakers and three million jobs teetering on the brink of disaster for lack of a $25 billion bailout, you’d think Obama would want to end a war that wastes that much in 12 weeks. Yet, even in a depression, Barack Obama is no less devoted to the pit of blood and treasure that is Iraq than George W. Bush.

Forget preemptive war. How about preemptive impeachment?

COPYRIGHT 2008 TED RALL

Party Like It’s 1993

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Ted Rall

I’m continuing to work on the archives. The latest changes: 2005 and 2006 now have titles and appear in reverse chronological order. Also, the 1993 stuff from my Chronicle Features period is now online for the very first time.

It’s a period with interesting parallels to our own: a young conservative Democrat had just been elected with high expectations after a Bush had messed up the economy, which continued to suffer for several years before the dot-com boom caught fire.

Letter to Time Magazine

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Ted Rall

TIME published its list of “Top 10 Editorial Cartoons of 2008” and it’s, well, fucking atrocious. So I’m sending this Letter to the Editor to TIME:

To the Editor:

Your list of the Top 10 Editorial Cartoons of 2008 is an insult to editorial cartoonists, many of whom are losing their jobs to the economic downturn in the newspaper industry. In 2008 hundreds of brilliant political cartoonists produced thousands of hard-hitting, thought-provoking and hilarious cartoons about everything from the flash in the pan that was Sarah Palin to the rise of Barack Obama, and all you could come up with was this phoned-in crap?

Never in American history have so many talented artists worked in so many diverse styles using as many approaches to produce as exciting editorial cartoonists. Yet never have the political cartoons appearing in print in mainstream print media have been so bland, inane, and just plain stupid. (The good stuff appears in alternative weeklies, family-owned dailies and, of course, online.) It’s a paradox, and it’s hurting our profession.

It’s one thing for lousy cartoons to appear in print somewhere. It’s downright appalling to anoint them the best work produced by a field in a given year. Heck, even among the artists you selected, they all did much better work than the pieces you picked. How would TIME like it if someone published a list of the Top 10 Newsmagazines of 2008—and it was just a list of blogs by 16-year-olds typing in their parents’ basements?

Do us a favor: If you can’t find a few clean and sober editors to take the time to sort through the year’s editorial cartoons, don’t bother.

Very truly yours,

Ted Rall
President
Association of American Editorial Cartoonists

SYNDICATED COLUMN: LBO No Mo

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Ted Rall


Stop Speculators From Ruining Strong Companies

The Crash of ’08 offers the incoming Obama Administration a rare chance to rein in the excesses of our economic system. I can think of few better places to start than banning leveraged buyouts.

Leveraged buyouts (LBOs) are Wall Street’s solution to American capitalism’s dirtiest secret and biggest problem: no one has any money. Really. Working as an investment banker during the 1980s, I was repeatedly astonished when deals would fall apart because would-be buyers of major corporations didn’t have enough cash on hand to buy a house in the Hamptons. Many of the wealthiest people in the world, it turned out, have zero or negative net worth. According to The New York Times, for example, one of Donald Trump’s biggest sources of income was his job hosting the TV show “The Apprentice.” Those buildings with his name on them? He leased his name to developers who liked his brand.

It’s true: the rich are different than you and me. But not because they’re rich. If most “wealthy” people ever had to settle up with their creditors, they’d be worth less than the average homeless Iraq War vet. What they do have—or, until recently, had—big lines of credit.

LBOs are a way for cash-poor “rich” people and corporations to buy companies they can’t really afford. First the would-be acquirer buys enough stock to get controlling interest in the targeted company. A bank lends him the rest of the purchase price, using the purchased company’s own assets as collateral. Overnight, a profitable company with a healthy balance sheet can find itself burdened with staggering debt—its own purchase price.

Now the corporate raider owns the company. But the company owes big payments to the bank. The raider has two options. He can use his management skills to make it more efficient and profitable. Or he can sell off pieces of the company. More often than not, “turn around” experts find that they’re not much smarter than the management they replaced and end up selling assets and cutting costs. For other acquirers, turn-arounds aren’t the point. They’re out to gut the joint from the start.

The results are the same in both scenarios. Each sale of a division and each round of layoffs reduces the already cash-starved acquired company’s chances of survival. The formerly profitable company is forced to file bankruptcy. Its employees lose their jobs. Because the law inexplicably lets corporations use retirement plans as collateral for loans, they often lose their pensions too. Suppliers are stiffed. Customers suffer higher costs due to less competition.

It’s bad news for most people—but not for everyone. The corporate raider sells off his equity stake in the company before the fiscal excrement encounter the fan, then pays himself and his friends millions in golden parachutes. The bank, which collected high interest payments as the company began its post-LBO decline, seizes and sells off what remains of the company’s assets.

Here’s another way to look at it: Let’s say you want to buy a car you can’t afford, like a Rolls Royce. You “buy” the fancy hand-crafted auto using the car itself as collateral. When the payments come due, you sell the engine, tires, carburetor, CD player and other parts to a chop shop. You pocket the cash and default on your loan. This, of course, is illegal—yet in this scenario all that’s been lost is a nice car.

LBOs inflict much greater damage. They transform profitable companies into bankrupt ones, throw thousands of people out of work, stifle competition and deprive government of the tax revenues it needs in order to build schools, maintain roads, and drop bombs on Muslims. Yet LBOs are legal.

Generally speaking, LBOs succeed under two conditions: an expanding economy and a management team able to radically increase profits in a short time. These conditions are rarely present at the same time, and almost never for very long.

Signs that the LBO model was untenable began appearing 20 years ago, when two of corporate raider Robert Campeau’s victims, the Revco drugstore chain and Federated Department Stores, went bankrupt. Federated, which employed thousands of American workers before Campeau came along, had been saddled with LBO debt equal to 97 percent of its net assets.

LBO transactions have since led to scores of bankruptcies and hundreds of thousands of Americans losing their jobs—all to line the pockets of a tiny cabal of greedy speculators. The LBO goons’ latest victims, ironically enough, are the media giants lionized by their own business reporters in breathless puff pieces.

In 2007 Sam Zell, described as “a 65-year-old billionaire and president of Chicago-based Equity Group Investments,” bought the Tribune Company for $8.23 billion. Tribune was one of the largest media chains in the United States, owning The Chicago Tribune, The Los Angeles Times, The Baltimore Sun, 20 television stations, and other properties—as well as the Chicago Cubs baseball team. Like most “billionaires,” Zell didn’t have any money. Like most takeover artists, he didn’t know anything about the multibillion-dollar business he wanted to run.

Zell invested a mere $315 million (3.6 percent of the purchase price) and stuck Tribune with $8.4 billion in debt, promising to make early debt payments by selling the Cubs and turning around the company’s flagging newspapers.

Everyone saw trouble ahead. “The leveraged buyout is making Tribune one of the riskiest newspaper companies, according to John Puchalla, a media analyst at Moody’s Investors Service in New York,” reported the Bloomberg business wire service at the time. Now, a year later, Tribune has filed Chapter 11. Layoffs are coming fast and furious. After just 18 months under Zell’s careful stewardship, Tribune—formerly a profitable company—reports assets of $7.6 billion and debt of $13 billion.

“Factors beyond our control have created a perfect storm—a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support our debt,” Zell said, acknowledging the disaster.

Zell is right about the credit crisis. But it would have a lot easier for Tribune to weather the storm if he’d never come along.

COPYRIGHT 2008 TED RALL

SYNDICATED COLUMN: Smells Like Bob Dylan

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Ted Rall

Why Obama is Just Another Boomer

Barack Obama, people are saying, is the first Generation X president. Are they right? And if so–does it many any difference?

“The battle for the Democratic nomination in the U.S. presidential election,” reported Agence France Presse wire service nearly a year ago in January, “is as much about ‘Generation X’ wresting power from Baby Boomers as it is a battle between Barack Obama and Hillary Clinton…Most significantly, analysts say, it is the first time someone from the so-called Generation X has run for the White House.”

A Gen X president is, or would be, a big deal. Xers’ major concerns–student loan debt, underemployment, age discrimination against the young, the environment–have never gotten much attention in the media or in mainstream politics. But is Obama Gen X?

Membership requirements for Gen X have long been fungible. Demographic purists say Generation X began with those born after 1964, when a sharply dropping birth rate marked the end of the postwar Baby Boom. Sociologists, who look to common cultural and economic reference points as generational signifiers, include everyone born from 1961 to 1976. If you grew up with LBJ, Nixon and Hendrix, you’re a Boomer. If your touchstones are Carter, Reagan and Molly Ringwald, you’re X.

Some analysts put Gen X as late as the 1981 birth year, but I side with Canadian author Douglas Coupland because, well, he wrote the book. When Coupland published “Generation X” in 1990, its subjects were twentysomethings. Do the math. That includes anyone born in the 1960s.

By any account, Obama’s birthdate–1961–barely admits him to Gen X. Yet Gen X won him the presidency. Sure, a higher proportion of Gen Y voters than Gen Xers supported Obama (66 to 52 percent). But twice as many Xers showed up at the polls. The One couldn’t have done it without the X factor.

Prominent Xers embraced Obama early in the process. “[Obama] attended an anti-apartheid rally in Southern California,” said “X Saves the World” author Jeff Gourdinier during the early primaries. “He writes about his doubts about the effectiveness of that form of protest…He is very honest about his skepticism. That is the Gen X sensibility.”

“Our time to lead has come,” gushed Elizabeth Blackney, a 35-year-old Republican blogger from Oregon. But she and the rest of my underemployed, underrecognized generation may have to wait. Now that Obama has our votes, he has a lot more love for Generation Y than for Generation X.

The Nation, the Bible of liberal Baby Boomers, is atypically smart on this point. “For Obama, who is 46, and his followers, Boomer politics clearly have to go,” writes Lakshmi Chaudhry of the 1980s and 1990s “culture wars,” which constantly rehashed Vietnam and other hoary so-last-century conflicts. “What is less obvious is whom Obama represents. He often speaks to the Millennials, recently telling cheering college kids in South Carolina, ‘It’s your generation’s turn.’ But rarely mentioned is Obama’s own generation, i.e., Generation X, the Lost Generation, whose name has been virtually erased from the national conversation.”

In my 1998 Generation X manifesto “Revenge of Latchkey Kids,” I called it “generational leapfrog.” Generational leapfrog is the tendency of the good things in American life–high-paying entry-level jobs, generationally directed social programs, free love–to jump from the Baby Boomers born between ’46 and ’64 to their children, Millennial/Generation Y types born after ’77.

It happened in editorial cartooning, my chosen profession. The vast majority of political cartoonists working at daily newspapers, those who get decent salaries and actual benefits, are Boomers in their 50s and 60s. If and when a new job opens up, it goes to an artist fresh out of college–a Gen Yer. Thirtysomething and fortysomething Gen Xers need not apply.

Demographers William Howe and Neil Strauss predicted this phenomenon in their 1991 book “Generations.” They argued that Xers belong to a “reactive” generation doomed to be ignored by everyone that matters–Hollywood, Madison Avenue and Washington. Like prior “reactive” generations (the last one was Hemingway’s “Lost Generation”), they will probably not see one of their own become president.

Howe and Strauss note that members of a generation can exhibit cultural signifiers and other traits more closely related to another generation. As a self-identified Gen Xer (1963/age 45), I spent my college years attending concerts by late-period Blondie, the Dead Kennedys, Flipper and the Clash. Punk rock and New Wave defined my coming of age. Like most of my peers, I later got into post-punk and grunge bands like Nirvana. But many of my classmates were more into the Doors and Bob Dylan. Born too late to enjoy the Summer of Love, they nevertheless identified as Boomers.

By this measure, Obama is a Boomer. His favorite music? According to his Facebook page: “Miles Davis, John Coltrane, Bob Dylan, Stevie Wonder, Johann Sebastian Bach (cello suites), and The Fugees.” Yech. His favorite movies? “Casablanca, Godfather I & II, Lawrence of Arabia and One Flew Over the Cuckoo’s Nest.” Great films. I love them all. But a Gen Xer would have been more likely to namecheck “Repo Man” and “Slacker.”

Generation Xers who hope that one of their own is finally in a position to address their long ignored concerns had better believe this: Obama is paying attention to the young and the old. You in-between types, still paying off your college loans and facing discrimination in the workplace because of your age, will have to keep on keeping on the best as you can.

COPYRIGHT 2008 TED RALL

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