___

Hi Richard,

Here are a few thoughts, in your order of asking.  I appreciate you are not American, which says a lot (most of it probably good) about your media exposure.

1. There are several ways to look at the collapse. The “real” cause, in my mind, was an explosion in global liquidity, itself caused by the Bank of Japan and the Carry Trade, and the huge influx of petrodollars resulting from radical rises in oil pricing.  (Our members/subscribers have been watching this since before these things happened, which no doubt gives them an easier perspective on this than non-members would have.  I’ve been writing about it for years.) 

My comment re: Bush (and, in the case of one Act, Clinton) is that he gutted regulatory legislation, intentionally appointed non-enforcers to key financial regulatory positions (like the SEC), and made sure that there was no oversight, no regulation, and no action of any kind that would threaten or temper the moves by commercial and investment bankers that eventually blew up the global economy.  These moves (off-sheet liabilities, insurance exposures sixty times the market value of the firm, mis-ranked mortgage packages, etc.) are directly the result of the Bush approach to governing, and I consider him both directly and indirectly responsible.

2. I don’t think Obama is glib; he seems to me to be talking quite thoughtfully about the huge issues he and we were handed.

He and Geithner have save the world from what they both saw on inauguration day: a real global economic abyss, caused by ethical, legal and financial breaches so great and deep that there was no assurance of avoiding real global collapse.  People tend to forget this rather quickly, particularly now that we seem to have been saved.  One might begin by saying, Thank you.

Next comes the part you, and our eloquent president, are both worried about: when is it time to pull back.  He knows it’s a big issue, you know it, and I know it.  I have always felt that the real problem, rooted in the original cause, is too much global liquidity.  Just having everyone print and spend more money won’t fix it, rather, it will exacerbate it.  Obama has begun talking about pulling back, but the question is when.

So yes, I, too, am worried about hyperinflation.

3. Bush was NOT deceived by his intelligence services; this is a bit of pastiche served up by the Bush team, after the fact, as a lie to cover their own misdirected activities.  People either missed, or have forgotten, that CIA leader George Tenet testifying before the Senate, prior to the Iraq War, that Saddam and Iraq did not pose a threat to the U.S. worthy of war.

You probably didn’t know that.  There is a fascinating story of the Bush team manipulating the CIA (and not the other way around), including installing a new agency uber-boss (ODI), arrogating almost all CIA tasks to the Pentagon, and then, when Tenet went along for the ride, giving him a Congressional Medal of Honor – and firing him.

What a joke.  And no one seems to have caught the whole tragic / comedic play.

It is, however, very true that Cheney and Rumsfeld appeared to have been completely bamboozled (fooled) by the exiled Iraqi National Congress and the strange, self-serving Mssr. Chalabi.  He took them for a real ride, and was only able to do so because they had shut themselves off from the country experts in the State Department and the CIA.

As for Colin Powell: his perfidy in the Iraq War buildup (he was against it, I believe, but went along with the lies and fake evidence to keep his own career on track)was professional suicide.  As far as I can tell, a previously-great man self-destructed in front of the world during his goofy UN go-to-war speech.

Bush was more a puppet than a deceiver, but he was a knowing puppet.  What is the ethical cost of that position?  Cheney was the happy deceiver, as we continue to find out day by day. 

There were never any WMDs, but Cheney and others continued to suggest that there were WMDS that got somehow lost or hidden, on Fox (not) News, while also claiming that Saddam really was linked to Al Quaeda.  Talk about misdirection.

The best global science today shows that some number between 600K and 1MM Iraqi civilians have been killed since the U.S. attack began.  No one is claiming that the US Army massacred anyone (ie, no one is claiming any My Lai – llike incidents.)  But if you are interested, you can go  back and review the first full-scale U.S. attack on Anbar, and on the town of Fallujah. 

I just picked this video up from a Google search on the town, it is called “The Massacre of Fallujah”.

http://www.dailymotion.com/video/x5axbm_the-massacre-of-fallujah-iraq_news
I don’t believe that, as bad as Saddam was, he was responsible for more Iraqi civilian deaths than Bush. And that is ironic.  If the Johns Hopkiins and European research teams are correct, Bush killed more innocents than Saddam.

5. The war in Afghanistan was a direct, and perhaps necessary, result of 9.11.  The Taliban had sheltered the terrorists who bombed the Twin Towers, and refused to hand Osama et al over to us.  End of story.  And yes, it has been a bloody one, wholly self-inflicted.  It is a difficult war, but not, in the sense of Iraq, a commercially-driven, or stupid, one.

6. If I understand your question: yes, all presidents are expected to put their own people into top jobs in the government, as part of the changeover.  But don’t let this cloud your understand of what Bush did that was strictly illegal:  presidents are not allowed to select Department of Justice employees based SOLELY upon party affiliation.  I still expect Bush team members to face felony charges over these actions.

Thank you for writing in a thoughtful letter, Richard.  I hope these comments help.

We have likely avoided global economic oblivion.  The Republicans, who are largely at fault for this horrible experience, have been incessantly whining about spending, self-dealing, and anything else their focus groups can come up with: how truly ignorant, and dangerous to the world.

We, the world, owe a debt of gratitude: first, to Ben Bernanke, who came in modestly, faced a completely frightening task, and did it well, while ignoring the many partisan voices that had no backing in intelligence or data.

Second, to Hank Paulson, who also was and remains a subject of criticism, for many imagined wrongs, while he, at the time, was the only officer awake on deck.  Imagine having been Paulson, surrounded by economic idiots like Bush and Cheney, and staring over the edge into what not only seemed like, but really was, the Abyss.  Thank you, Hank, for scaring DC just enough to get their jowls out of the troughs and do some meaningful things to avoid disaster, without scaring the world so much that the sky fell in.

Even more to the point, we have Barack Obama, and his hand-picked team of professionals, who since the early days have quietly, every morning, looked into that same Abyss, and reduced its depth by a few miles.  No one is getting any thanks for this, so I would like to go on record for appreciating the difficulties, intellectual, emotional and political, that these chosen financial professionals are experiencing dailly, and conquering as they go.

So that is the Good News: by accident, we had an expert in place in a Bush administration riddled with amateurs.  And we chose Obama, who did what we hoped, and picked the best people in the country to take the wheel.

The Bad News: it isn’t over.  We’re about at the half-way point now.  We are not going to repeat the Great Depression, I think, and that is great, but this is the moment of second-greatest danger, as everyone assumes we’re OK, when we are not there yet.  What I mean by this: there remain plenty of actors on Wall Street who were doing intellectually dishonest things to “make money” without creating value, and who are ready tonight to go right back at it, hammer and tongs, without a second thought.  Wow!  Really?

One example of this is in the oil pricing story, where the same schemers are now back again, driving up prices without a thought: why should they care if their personal antics, worth a few bucks in income, put a heavy tax on the global economy?  They just don’t get it.  Since they don’t, I hope someone in Washington will, and will decide that price manipulation of energy is a federal felony worth prison time.  More to the point, that they will seek out such miscreants and put these white collar criminals behind bars for a very, very long time.

Given that the worst is over, but the battle is not, now is a good time for our subscribers, members and blog readers to be vigilant, careful, and not to act as though risks are now history.  Plenty of small banks will fail in the next year (watch out, Georgia); California will likely go bankrupt in some form within 90-120 days.  More people will lose their jobs, and retail in the U.S., our largest economic input historically, will be in the gutter. 

But for those who are careful and paying attention, there are already opportunities, globally and locally, in U.S. real estate, in commodities (copper in China, anyone?), in large scale opportunities in alternative and clean energy.  The world is changing in fundamental ways, and that is always the best time to make money.

So, again: Thank you, Hank, Ben, Barack, and Tim.  The world owes everything to you, after we twice ran the Monkey in the Cockpit test. 

Whatever the angry men on radio and TV are shouting out this week, you saved us from that darkness over the edge that Hank saw the weekend after Lehman failed. 

For those who are serious about making money, there are today more ways of doing so than there have been for many years, and these are real, rather than fraudulent.  And for those who are serious about world affairs, we are back in adult, professional hands, and none to soon.  Now we just have to be very, very careful.

Rather, I think it is more interesting to continue the very serious conversation about which exact crimes they have committed, who has committed them, and what kind of punishment they may expect to receive, a process that will begin hours (not days) after they relinquish power.

I want to say one quick thing about Obama’s comments on this, echoing Paul Krugman in today’s NYTimes: a) Obama would be making a huge mistake, despite the short-term advice being given him by inside counselors (the top one the son of an Israeli terrorist) about letting the Neocons and other criminals get off the hook; and, b) it isn’t up to him.

This latter view is worth pursuing:

Who cares what Obama decides to do about Bush? Excuse me, but I just could not care less. When criminals break the law, we don’t ask candidates-to-be if we should prosecute. I would suggest that ANY comments by the Obama team indicating a lack of will to prosecute would, of itself, be worth examining as being in some way accessory.

In other words, Obama: on this subject, please shut up. We are not interested in your first big mistake: not prosecuting the most evil and dangerous villains ever to misuse power in the U.S. government.

Therefore, regardless of the Obama political calculations, we should be resolved, as we have in past similar situations (Iran Contra, Watergate) to put these crimininals to trial.

There are so many crimes, it seems almost impossible to list them; I certainly won’t try to here, but will leave it to experts in each department and field to do so. Krugman says he has counted six different departments wherein crimes were committed; that seems too small a number, but it does not matter.

Here is a simple question: who is responsible for nearly a million civilian deaths in a faked war? There was never, ever a need for an Iraq war; and that statement will stand the test of history. Given its truth, we should not be talking about the few thousand GI deaths as the cost of the war, but should recognize that the United States, without cause or any particular aggression on Iraq’s part, and without any proven concern for its own safety, did cause the deaths of between 600,000 and 1,000,000 civilians in that country.

Let’s see now, is Dick Cheney ready to stand up and pay for this? Exactly how, Mr. Cheney, are you planning on doing that?

One million civilian dead.

And then we have the increasingly-correct pattern I have discovered about the entire Bush administration: it was about nothing smaller or larger than regular old Texan self-dealing. If you are familiar with Texas political history, self-dealing is kind of like getting up in the morning. But, for the rest of us in the Union, self-dealing is unethical and often illegal.

The story of the Bush administration will fall into prosecutorial parts, all of them very large, and all of them worth the effort of pursuit and conviction:

1. Killling of Innocent Civilians. With no cause, and based upon lies and deception, the Bush administration invented a war which led directly to the deaths of about 1 million civilians. Welcome to Hell, boys. If the reconstituted Justice Department doesn’t get you, Satan surely will. I’m glad y’all are so religious, that’ll be worth five points.

2. Self-dealing. Richard Clarke noted your map showing an Iraq already divided between oil companies nine months before you declared war. In fact, self-dealing is the single term that describes the entire Bush time in office. Everything the Bush folk did was, in some way or other, self-dealing. Specifically, historians will be working for years to figure out how you managed to milk $3T (trillion) out of taxpayers and transfer it to – - well, that is the interesting question, isn’t it? Did it all go to Cheney, since he was the real president most of this time, and he retained real financial connections to Halliburton, and Halliburton got most of the money?

But that is being way too simple about all of this. Let’s just assume that, starting with Enron, Kenny Boy Lay, and moving through Cheney’s top-secret energy committee meetings, on into the Iraq War, you used every opportunity, not to serve your country, but to serve your friends. With $3T in cash. Oww! Gee, some large number of people are SURELY going to jail on that one. $10B in cash missing in boxes in the first weeks of the Iraq War, and today, maybe $350B missing so far, with so much more still undiscovered — WOW! George, there is no other word for this kind of theft from the taxpayer other than, well, breathtaking.

Don’t worry. We will find it. And we will find your fingerprints, and those of your self-dealing Texas pals, eventually. It might take three or four years, but we have time.

3. Perverting the Justice Department, and Justice, itself. Others have written eloquently about this; it was, generally, mirrored in the EPA, and in other government agencies. I personally think your goofy AG Gonzalez will serve time, and many of his mis-guided screwballs will also go to jail. Mssr. Yoo is first in line for writing 8th grade level deceptive opinions on why torture etc. was legal. Other appointees made for purely political purposes will come next.

In a brief not-quite summary: in addition to killing millions of innocent civilians without cause, self-dealing trillions of dollars to Halliburton, KBR, and your own family, and doing your best to destroy the Rule of Law and Bill of Rights in this country, there remain thousands of other, smaller, but also important, crimes, for which you

The Defendants, civilians
George W. Bush
Dick Cheney
Donald Rumsfeld
Douglas Feith
Richard Perle
Larry Franklin
Paul Wolfowitz
Condoleezzaa Rice
John Yoo
Alberto Gonzalez
Unnamed John Does in the Justice Department
Unnamed John Does in the EPA
Unnamed John Does in the other departments of government
“Scooter” Libby
Karl Rove

Are hereby charged to answer, on the xxth of February, at XXXX in Washington, DC.—-

The world is watching, and, more importantly, so is the nation. Even more important, so are the criminals who did these really, really horrible things.

This prosecutorial decision is not up to the Obama Transition Team. This is about breaking the law.

Krugman says that, without punishment, you will continue doing what your Dad did in Iran Contra.  BTW, George, I did in fact notice that your very first act in office was to extend the secrecy of your father’s archives, beyond their usual time coming public.  So: Iran Contra.  Daddy started it, You continued it.

I think Krugman is right: if no one is punished for the most flagrant and greatest violation of U.S. laws in history by (illegally?) elected politicians, how can we go forward?  How can the world, knowing that the Z Team is just waiting, in reserve, to come back onto the field and do it all over again?

Neither the country, nor the world, can afford it; nor can we afford even the doubt about it.

We need to be clear: when you intentionally, flagrantly, break the law, we will come after you.  Even if you are or were an elected official.

That is the most well-loved aspect of America, and it is the part of America we most want to keep.

So, Mssr. Obama, please don’t discuss this publicly at any greater length.  If I wanted you to be the person who decided whether the law mattered or not, I would have voted for you as the Decider, instead of as the President.

Put some steel in that backbone, and get used to having it there.  Your widest road to failure is paved with having no personal stand.   We all like Henry Clay when it comes to geographical compromise.  None of us would espouse the same approach to murder, or abrogation of the Bill of Rights.

The Bush Team is going to jail, and one hopes, quite soon.  Of course, then we’ll have to face the ultimate self-dealing question: Can a President pardon himself and all of his self-dealing friends for crimes in the future, for which they have yet to be charged?

The answer is no, but I have no doubt he, and they, will try.  They have already proved to us that they have no personal shame.

He can’t just be insane, so — what is it?  What explains his behavior?

Today, as Congress fished around for money to save the U.S. auto companies, in a pickle because they had not invested earlier in alternative – energy projects, George Bush gave a speech, suggesting that Congress take the money from alternative energy projects to prop up the dying carmakers.

Is he really an idiot?

Some day, in the not so distant future, several things may happen:

1. As laid out in Harper’s this month, the President, the Real President (Cheney) et. al may face domestic or international criminal charges for war crimes.

2. Not that George can not pardon himself or others for international crimes, as in the Nurnburg Trial.  Even if he escapes domestic prosecution, he may end up like Pinochet, hounded worldwide by courts elsewhere, kidnapped, dragged around, arrested and jailed elsehwhere, etc.

3. The simplest way to understand the entire Cheney/Bush regime is to assume that family ties to the Saudis were more important than catching bin Laden, that oil in general was more important than anything Bush swore to uphold on that Bible during his inauguration, and that Bush et. al (the heading on future lawsuits, ad infinitum) were embarked on an intentional, planned, consistent program of looting taxpayer monies for their personal and private benefit.

It is impossible to forget: We still have a month and more to go.  There are plenty of miscreants on a master scale who would like to have a parting shot at screwing everything up for normal people in return for private gain, at the cost of a single large check to the Bush Library (Bush doesn’t read books; what a joke).

Bend over, and Get ready.  George never cared for us then, and he still doesn’t today.  He serves only his family, and a few close “friends.”