March 31, 2006

Scalia Not Impartial on Hamdan

Supreme Court justice Scalia's impartiality is reasonably questioned in the Hamdan v Rumsfeld case. He should recuse himself from the case.

The Hamdan case challenges legality of the military commission that seeks to try bin Ladin's former driver for war crimes. Newsweek reported that, before testimony on the Hamdan case was completed, Scalia gave a speech in Switzerland, where he dismissed the idea that the detainees have rights under the U.S. Constitution or international conventions. During the speech Scalia said he was "astounded" at the "hypocritical" reaction in Europe to Guantanamo. Scalia said "War is war, and it has never been the case that when you captured a combatant you have to give them a jury trial in your civil courts."

A chauffer is as much of a combatant in this "war on the tactic of terror" as a biased Supreme Court Justice is.

Voice your opinion:
Contact the Supreme Court

Note: This piece draws on text from:

March 27 DemocracyNow! headline

Washington Post

March 28, 2006

The Citizen Will Show

A funny thing happened on my way to Korea and back. Well, actually it was an article of mine that apparently made the trip. The punch line, as translated and retranslated, was "The Citizen Will Show." That pretty well sums it up.

One part of the translation does concern me, however. That is, "thuk Recalling the President with the sword and... the child wild world being horrible."

I want the Secret Service to know, that's not exactly what I said. I want him impeached, not recalled. The part about the sword is some korean's poetic license.

To clarify:
바른언론 빠른통신 인터넷 연합뉴스>자유토론 보기

Gary Hart Calls on "the people" to Check Bush "Tyranny"

Two-time presidential candidate Gary Hart has drawn on writings of the Founding Fathers to define Bush's consolidation of power as "tyrany," and calls on the people to check this constitutional crisis.

A Simple Sequence of Logic:

Bush is concentrating executive powers under the "war on terror," which are not granted by the Constitution and are prohibited by Congress.

James Madison defined tyranny as the concentration of powers in one branch of the government.

Madison's solution to tyranny relied upon either Congress or the Supreme Court checking the president. Presently, Congress will not check the president, and no legal case is working its way towards a Supreme Court judgment.

Facing the failure of our system of checks and balances, Hart proposes the question, "Can what Thomas Jefferson called the "common sense and good judgment of the American people" help us now?"

Hart argues that the people can and must check the president's tyranny, but first they must wake up to the present constitutional crisis.

Note: The text above draws heavily on the March 27, 2006 article by Joyce Appleby and Gary Hart

March 26, 2006

Si se Puede by the Hundreds of Thousands

Immigrants are facing the prospect of Congressional legislation that would build a fence along one-third of the US/Mexico boarder, criminalize undocumented immigrants and criminalize people who feed and house these immigrants by classifying them as human traffickers. Because the House legislation, HR 4437, has already been passed, immigrants' concern is palpable as the Senate considers the Sensenbrenner Bill.

This concern materialized in Los Angeles as 500,000- 1.5 million people took to the streets chanting "Si Se Puede" (Yes we can) on March 25, 2006 (Associated Press). Having some personal exeperience with peace protests, I know that's a huge number of people (a demonstration is considered very successful if 100,000 people participate).

According to the AP article, the "legislation ... would make it a felony to be in the U.S. illegally, impose new penalties on employers who hire illegal immigrants, require churches to check the legal status of people they help, and erect fences along one-third of the U.S.-Mexican border."

The massive LA protest isn't an isolated demonstration. On Friday March 10, to the suprise of many, Chicago police estimated over 100,000 protesters in the streets of that city (Coverage Link). Street protests have occured elsewhere, including 5,000 to 7,000 on March 25, 2006 in Charlotte, and tens of thousands in Washington, DC on Monday March 7, 2006 (Wash Post Link). Denver, CO had a demonstration of about 50,000 and Phoenix, AZ had a demonstration of about 20,000, which was its largest protest in history.

These protests, often on week days, demonstrate a massive base of human power for which this issue ressonates. A more humane approach to immigration reform would be wise in the face of the likely resentment the proposed legislation could engender in this huge constituency.

March 12, 2006

Censure Bush for Violating 4th Amendment

Senator Russ Feingold's call to censure bush for the illegal domestic spying program is an appropriate response. Failure to respond in some way would condone this type of behavior in future presidencies and erode the fabric of our self-governing system.

March 11, 2006

The Biggest Fear in Real Estate

The front page of today's Wall Street Journal reads, "Many mortgage borrowers may face financial problems or even foreclosure as adjustable-rate-mortgage payments are reset higher." Why has the WSJ used the prominent upper right-hand corner of it's front page for this message? Perhaps their aims are similar to those of the Federal Reserve, to stop the unhealthy speculative boom in the real estate market. That boom is slowing, but the question remains: Will the boom become a bust? More important, would such a bust spread to the entire economy?

The answer to the first question depends on the local market. Some markets might not see a bust, like Baltimore, Maryland, which will experience housing demand in response to recent military base realignment decisions. Others might be in for a shock, for reasons below.

First-year economics teaches us that prices drop when supply increases. It was with this in mind that David Seiders, cheif economist for the National Association of Home Builders recently said, "the biggest fear I have is investor-owned units coming back on the market in large numbers." [1] He has good reason to fear, because there's a record number of such units available to flood the market.

Second homes now comprise 38 percent of the nation's entire existing housing stock, according to the National Association of Realtors' "2005 National Association of Realtors Profile of Second-Home Buyers" released in March 2006.[2] Add to that the "millions" of borrowers who face foreclosure because they have exotic balloon-rate mortgages, and the "potential" for a downward bust in prices is undeniable.

That potential is a main ingredient for a bust. The other ingredient is self-reenforcing feedback. Lets look at a boom cycle as an example of such feedback. In the earl-1990s the Asian market was getting attention in the business press and many people pondered investing in foreign stocks. Early investors acted and the stocks rose. This rise gave confidence to a few more investors who entered the Asian market driving the stocks and other asset prices up further. This undeniable rise reenforced the justification for others to invest, which in turn drove up the prices. The feedback process continued, word got around to less informed investors who boosted the stocks further. There is often a "testing" period, when wise investors leave the market for fear of a downturn, and the rise slows or even dips, but this is often counter-balanced by late comers to the speculative boom. Eventually, the dip turns back up, fears of a downturn subside, and the self-reenforcing boom continues. This was the case in Asia until 1998 when the bottom fell out. The spread of this crash became known as "the Asian contagion."

What is clear is that this self-reenforcing feedback process works in both directions. Eventually, profit takers start to leave, and the stock price comes down a little. Those who got in late have little profit margin to loose, and they get must get out quickly, causing a clearly evident price decline. This undeniable decline reenforces the rationale for leaving, and others start to fear an actual loss on their investment. The same logic certainly applies in the case of the current real estate market, though the process is slower than for stocks; investor-owners don't want to get stuck holding a property they must maintain, particularly if the rigors of being a land lord is not their strong suit.

A third ingredient of boom-bust mechanics is summed up by the phrase, "the bigger the rise, the bigger the fall." For five years, real estate prices have witnessed dramatic annual rises. The annual percentage assessment increase in Maryland for at the end of 2005 was 20%. The range by county was 13%-26%. [3 Baltimore Sun] This followed five years of similar annual increases. But forget the numbers, who hasn't heard someone say, "I couldn't even afford to buy my own house today if I was in the market to buy." I've heard this statement a half-dozen times from people with well-paying jobs.

But, as convincing as that might be, that's all hypothetical. There is hard evidence of "the biggest fear" coming to pass. The Baltimore Sun article, referenced above, was accompanied by another article entitled, "slowdown poses new reality for buyers, sellers in region." The article includes a graph entitled, "listings soar" in which the number of homes for sale is shown to have more than doubled in a year. This is happening in the Baltimore market, which is supposed to be buffered by pending demand due to military base expansions. The 25% drop in San Diego housing prices from 1990 to 1996 also wasn't hypothetical. [4]

Now, to address the question of a potential spread of real estate woes to the rest of the economy. On August 8, 2005, economist and columnist Paul Krugman had a piece in the New York Times entitled "That Hissing Sound." He notes that the economic recovery since the 2001 stock market crash "wouldn't have happened at all without soaring spending on residential construction, plus a surge in consumer spending largely based on mortgage refinancing."

Will people run back into the stock market if the real estate market deflates? Major US auto manufacturers now make most of their profits on finance fees for car purchases, rather than on the product itself. The average US citizen has a negative savings, implying that the auto industry might have squeezed as much real money out of the public as it can for some time to come.

Then there are our financial institutions. They too have huge exposure to the real estate market. In February 2003, the Office of Federal Housing Enterprise Oversight released a REPORT that lost the OFHEO director his job. The director, Armando Falcon, had the nerve to explain that major commercial banks were heavily invested in risky real estate-based financial instruments crated by Fannie Mae and Freddie Mac. This meant that if the real estate market goes south some major banks will go with it, and with the banks go other parts of the economy in a chain reaction.

For example, the report indicates that major insurers are also at risk. So, imagine you run a business that has no relation to real estate, so you think, say import/export. One morning you read in the business section of the news paper that real estate is taking a beating. The next morning you read some banks are getting shaky, fortunately, not the bank with which you conduct business. The next week, you read that your insurer has gone belly up because it was invested in real estate. Suddenly, you realize that your business is related to real estate, and that the world is a very dangerous place. You pray nothing bad happens to your current import shipment, while you frantically seek another insurance company. Unfortunately, you learn that the four biggest insurers were heavily invested in real estate. Maybe the "biggest fear in real estate" isn't the possibility that gobs of "investor-owned units will come on the market in large numbers," but the fear that real estate is strongly coupled to the rest of the economy.

1. "Housing Slowdown Ripples Through Economy," March 6, 2006, Associated Press, David Koenig.

2. Realty Times, March 10, 2006

3. Baltimore Sun, December 30, 2005 "Home assessments jump over 20 percent statewide."

4. Paul Krugman, "That Hissing Sound," New York Times Opinion section, August 8, 2005.