Destructive Religious Divide and Political Pastors

Crisscrossing America by plane, train and car during the spring 2008 democratic primary season, reading, listening and watching the multi-million dollar bitter implosive democratic primary campaigns of Senators Clinton and Obama, I couldn’t help exchanging views about it with fellow travelers. It became clear to me after these constructive discussions that America is ready for a change ─ not just in the White House ─ but the role of religion in politics.

The Clinton-Obama political bloodbath is reminiscent of the Democratic Party bloodletting of 1968 in Chicago that I witnessed first hand as a photographer. A badly divided Democratic Party will put Senator McCain in the White House with a foreign policy that will continue to make religion a cornerstone and will make the world shudder even more as it, like the Democratic Party, is further ripped asunder.

America can no longer continue to disregard and disrespect the Founding Fathers admonition and wish to separate church from state. If it does, it will become what the Founding Fathers feared and wanted to avoid ─ a country that is divided and destroyed by religious extremists. When 69 percent of Americans disapprove of the performance of America’s religious Bush, the highest disapproval rating for a president that Gallup has ever recorded, one does have to question the role of religion in American politics today.

America’s religious Founding Fathers were explicit and clear that there is no room for religion in politics for the reasons highlighted and crystallized during the primary season by Reverend Jeremiah Wright Jr. and Pastor John Hagee. The ranting of Reverend Wright Jr. is well known. Lesser known are those of Pastor Hagee, the San Antonio televangelist who has endorsed Senator John McCain, who has offended Roman Catholics and others. Pastor Hagee, called the Catholic Church, among other things, “the great whore” and “a false cult system.” He also offended many with his 2006 statement to National Public Radio that New Orleans had suffered “the judgment of God” because of its “level of sin.”

America is a sinner if it allows religion to continue playing a central divisive role in its domestic and foreign policy, a sinner whose pain and suffering will only get worse at both the economic and geopolitical altars of capitalism.

Gassed Out

Driving in California, from Los Angeles to Sebastopol in Sonoma County and back in April 2008 after my protest horseback ride against high oil prices in Los Angeles, to attend book signings and make speeches on the reasons for the high price of oil, I stopped at several truck stops, diners and country cafes to get gas and personally gas up.

The conversations and concerns of locals at all stops was the same ─ the high cost of gasoline, food, health care, education and hardships of single parenting ─ the basics of American life. Driving through John Steinbeck’s Grapes of Wrath Central Valley by vineyards and wine tasting rooms with the American flag proudly fluttering in the wind over the fertile land and irrigated fields with rolling hills of different shades of green grass, with hues of brown, I couldn’t help think of the beauty of America that was being corrupted by the hundreds of ugly graffiti covered empty rail cars idly parked on the silent rails snaking through the lush valleys, that like America, are waiting for an engine to move forward.

The silent landscape with motionless crane like oil derricks in San Aldo, was periodically disturbed by the occasional derrick huffing and puffing to pump the crude America so desperately needs to bring down the rising gasoline prices at the pump. Gasoline prices rose by more than 20 cents a gallon in the last two weeks of April. Truckers protested the rising fuel prices in Washington as politicians made more empty promises on how to lower gasoline prices, so I decided to share some personal tips on how to minimize the cost of gasoline and how I maximize my bang for the buck at the pump.

Only buy or fill up a car or truck in the early morning when the ground temperature is still cold because all service stations have their storage tanks buried below ground. The colder the ground the more dense the gasoline. When it gets warmer gasoline expands. So buying in the afternoon or in the evening, a gallon is not exactly a gallon. In the petroleum business, the specific gravity and the temperature of the gasoline, diesel, ethanol and other petroleum products plays an important role. A one degree rise in temperature is a big deal but gas stations do not have temperature compensation at the pumps.

When filling up do not squeeze the trigger of the nozzle to a fast mode. The trigger has three stages: low, middle, and high. In slow mode gas is pumped on low speed, thereby minimizing the vapors that are created while pumping. All hoses at the pump have a vapor return. When pumping on the fast rate, some of the liquid that goes to the tank becomes vapor. Those vapors are sucked up and back into the underground storage tank so one gets less value for their money.

One of the most important tips is to fill up when the gas tank is HALF FULL. The reason for this is, the more gas there is in the tank the less air occupies its empty space and makes room for more gas. Gasoline, like gassed politicians campaign promises, evaporates faster than people imagine.

Religion, Sex and Politics

Religion, guns, elitism, bitter Americans and ducking bullets in Bosnia dominate the political debates in the democratic primary as Pope Benedict XVI arrived in America and apologized for the sexual-abuse scandal afflicting the Roman Catholic Church. Sex, religion and politics, the three subjects we are taught not to discuss, dominate America’s political landscape during the democratic primary season ─ not because of the Pope, but Reverend Wright, Senator Barak Obama’s former pastor.

The political mudslinging that spreads hatred and lies about candidates running for office hit an unprecedented high in the Clinton-Obama contest for the democratic nomination. Americans can be forgiven if they are confused by the political expression, “The enemy of my enemy is my friend.” Americans debate what Reverend Wright, a former Marine, said and meant and whose enemy he really is.

But then again, America deposes and executes Saddam Hussein, a secular Sunni, and replaces his government with a democratically elected religious coalition supported by Iran. The anti-democratic and anti-American-coalition occupation Sunni insurgent Saddam loyalists, backed by Syria and U.S. friend, ally and protectorate Saudi Arabia, contribute more than their fair share of support for the political and military confrontations that kill and maim U.S. and coalition military and civilian personnel, along with countless innocent Iraqi civilians.

Sunni-dominated Saudi Arabia raised and contributed to America and the world ─ Osama bin-Laden, 15 of the 19 9/11 hijackers, and Sunni insurgents combating Shiite militias backed by Iran, yet they are, according to the Bush-dominated dynasty political spin doctors, a friend of America. To add fuel to the fire of confusion, Syrians, Iranians, Saudis and all three factions of Iraqis hate Israelis and distrust Jews. Democratic Israel, where Arabs sit in parliament, is vitally dependent on U.S. military and economic support to live comfortably while being stressed out by their determined, fanatical, suicidal neighbors hell bent on annihilating Israel. Yet the democratic primary debates only briefly touch upon these critical geopolitical issues vital to America’s security.

Foreigners visiting America can be forgiven if they believe only gays, pedophiles, peaceniks and bigots run for political office. Sex, religion and Democratic Party politics is resulting in the implosion of the Democratic Party and another possible Republican administration in the White House.

Virtual Hedge Funds

Hedge funds have been described as financial "weapons of mass destruction" by investment guru Warren Buffet. There are an estimated 8,000 hedge funds with over two trillion dollars of assets under management with no government oversight, supervision or guarantees should the funds start melting away in the subprime wake.

Their oversight, risk management and transparency is mandatory to prevent another multi-trillion financial industry meltdown. The voluntary guidelines under which hedge funds currently operate are no longer acceptable in light of what we have learned from the subprime crisis.

In 2007, a presidential working group headed by Treasury Secretary Henry M. Paulson Jr. rejected the idea that the funds needed increased regulation. The voluntary guidelines recommended by two industry groups assembled by the Bush administration earlier this year are a "virtual farce" according to the Connecticut attorney general. Many of the hedge funds are headquartered in the state and their meltdown is a legitimate concern to politicians there. It should be. Not just to them but all Americans. "Hedge funds have become too big and too important to remain outside the rules," said the attorney general. I concur!

America today has a debt of nine trillion dollars that requires us to pay more than two billion dollars a day in interest. Taken together with the more than 40 trillion in social security debt that our children and grandchildren have been saddled with, I do not believe America can continue to carry the risk of a two trillion dollar hedge fund industry collapse.

The regulation of hedge funds will make the financial system more stable and reduce the risk it currently poses to the world financial markets and economy. The subprime crisis has revealed how the banking system and unregulated financial instruments are interwoven with each other, essentially creating one credit market. Policymakers can no longer ignore the systemic risks posed by hedge funds.

Partition

The February 22nd bomb attack that destroyed the gilded dome of the 1000-year-old Shiite mausoleum of Iman Ali al-Hadi in Samarra, was the most graphic visual of the gilded political rubble the U.S. has created in Iraq, and also a sneak preview of the current civil war in Iraq. While Iraqi politicians and U.S. bureaucrats haggle over the formula of a national unity government, the repeated weekly suicide bombings of Shiite mosques remind us of how futile their effort to unite Iraq is.

Iraqis know that a unified Iraq is unsustainable for four reasons: history, religion, ethnicity and politics. They also know the appearance of unity will hasten the removal of U.S. and coalition troops.

The new constitution Iraq approved on October 15, 2005 created three de facto states ─ Shiite in the south, Kurdish in the north, and Sunni in the center. Local laws are superior to national law. The Shiites in the south and the Kurds in the north will own newly discovered oil reserves ─ which are in the Shiite south and Kurdish north. The only remaining issue is the revenue share formula for the Sunnis share of the oil revenues.

Most of the armed and police forces being trained by the U.S. led coalition forces are Shiite and Kurds. The more the U.S. military hands over prematurely to “Iraqis,” the more it will be handing over to Shia and Kurdish militia members that are bent more on advancing ethnic and religious interests than on defeating the insurgency or preserving national unity.
To think that the Kurds and Shiites in Iraq can forget their history and embrace the Sunnis in one central government is delusional and defies reality. Ultimately, the deep, vindictive ethnic and religious factions will fracture the government and country. Nationalism, as manifested by Kurds, Sunni and Shiite Arabs, is no different than the nationalism expressed by the new democratic republics that were part of the former Soviet Union, the Serbs, Croats and Macedonians in Yugoslavia, or the Czechs and Slovaks in Czechoslovakia. The World War I remnants of the Austria-Hungary Empire are no different than Iraq, itself a remnant of the Ottoman Empire.

The artificial borders of Iraq were created by its British colonial overlord to facilitate domination and control of the oil and can only be enforced by an oppressive authoritarian regime. The colonial borders must disappear for democracy to flourish as was the case in the former Soviet Union, Yugoslavia and Czechoslovakia. Likewise Iraq will have to be divided into three separate countries to accommodate the Kurds, Sunnis and Shiites. Trying to keep them together in one democratic state ignores the religious and ethnic historical differences and grudges that have been temporarily put aside as they try to rid their collective tribal lands of the occupying infidels.
A democratic Kurdistan and democratic Sunni and Shiite states will do to Iran and the Middle East what glasnost did to Russia and democratic Eastern Europe. Iran’s mullahs, Syria’s Baathists and the royals in Saudi Arabia will go the way of the ruling elites in Romania, Poland, Yugoslavia and Czechoslovakia.

America can create a lasting democratic model in Iraq for the Middle East. It has to install three democratic regimes and make sure they survive. It is important to avoid another U.S. foreign policy disaster. It would be a colossal catastrophe. America must deliver on its promises to the Iraqi people, America and the world. That is the only way America can extricate itself with honor with its “mission accomplished.” America cannot afford to fail in Iraq. If it does, it will be relegated to a 21st-century debt-burdened bankrupt – financially and politically.

Corporate Welfare Bear

The Federal Reserve decision to underwrite and guarantee $30 billion of Bear Stearns securitized mortgages for the fire-sale of the firm to JP Morgan was nothing short of a corporate welfare stamp of approval by America’s Central Bank of the irresponsible short sighted lending practices of greedy bankers ─ to prevent Bears collapse that will have a domino effect on other major financial institutions ─ and their greedy short-sighted bankers.

There is a real problem when the next day investment bank giants Lehman Brothers and Goldman Sachs report profits down 50%-60% from the previous year ─ and the market rallies. It is a problem that is received with a sigh of relief in the wake of Bear Stearns $2 a share fire sale. The company corporate headquarters is worth more than $1.2 billion, yet Bear was sold for a mere $236 million and a $30 billion guarantee from the Fed as a sweetener. It confirmed its multi-billion dollar mortgaged backed securities portfolio ─ like that of many other investment banks ─ is worth zero.

If Bear Stearns, a company that has been independent in the true American capitalist way for 85 years, survived the Great Depression, was valued at $20 billion in January 2007, and made a fortune in mortgage-backed securities has to be bailed out of bankruptcy, how many more stellar U.S. household name financial institutions will be put on the Bear corporate welfare program before they are cut off and allowed to lose it all like the foreclosed homeowners they profited from? Why doesn’t the government do the same for the dispossessed homeowners?

The Fed’s decision to bail Bear Stearns, lend $200 billion to investment banks, $100 billion in credit lines for banks and other financial institutions, that is pump over $300 billion of taxpayers reserves to prop up investment banks in the fast melting financial markets, merely delayed the collapse of the bear market as the Fed signifies a significant shift in policy and raises the question why aren’t investment banks and hedge funds subject to more stringent regulation? It is time all financial institutions capital and collateral requirements, and regulatory oversight, are overhauled. By throwing out its longstanding rule about lending only to commercial banks and extending this facility to investment banks, the Fed is admitting it was asleep at the wheel as the entire financial system went into meltdown mode before the Fed realized that long-term illiquid assets are not sustainable in short-term money markets ─ and the Fed has became a corporate welfare mom to avoid a global financial meltdown because of its late wake up call.

Mullahs Out of Fire Power at The Polls

The low voter turnout in the March 15, 2008 parliamentary elections in Iran, was the result of inbred apathy and the boycott by government critics, who wanted to send a message to the Mullahs and President Mahmoud Ahmadinejad. “Up Yours!” They wanted to make it clear to Iran’s conservatives that they will not listen to them and will do what they want, when they want.

Yet these critics, many of who were disqualified to run for office and their supporters who did not vote , received an overwhelming outpouring of support from voters nationwide and their Reformist and Independent parties won several seats in parliament. The conservatives split their vote between the mullahs and Ahmadinejad. Jointly, the reformists, independents and conservative mullah faction, can outmaneuver and outvote Ahmadinejad and company ─ and even defeat him at the polls in the next presidential election in 2009.

America should be actively supporting the mullahs critics, including the anti-Iranian government group Mujahedeen-e-Khalq, who have been fighting for a secular democracy to replace the mullahs theocratic regime since the shah was replaced by a mulllahtocracy. Before that, they opposed the shah’s regime and his backing and support from America. That got them blacklisted and they’ve been left on the blacklist so as not to annoy the mullahs. Why? They should be removed from the blacklist and be openly supported by America the way Iran openly supports the insurgents in Iraq and Afghanistan that kill and maim Americans.

Attacking Iran is not the solution to stopping it from developing weapons grade plutonium. Supporting all anti Ahmadinejad factions, including the MEK after they are removed from America’s blacklist, to remove Ahmadinejad and his supporters from office, together with strong financial sanctions on the movement of currencies trading with Iran or belonging to the government that are strictly enforced. Incremental sanctions don’t work. The three U.N. Security Council sanctions, the 110 plus times the U.S. has imposed sanctions against foreign entities that engaged in proliferation or terrorism-related activities with Iran, and the hundreds of litigation cases the U.S. Treasury Department has brought against companies for violating the ban against trade and investment with the Islamic Republic, have failed to stop its nuclear program.

Imposing heavier sanctions in the financial markets against Iran is not sabotaging the on-and-off dialogue between America and Iran. It is expediting the process. If Iran is serious about only developing nuclear power for peaceful means, and not militaristic, it should sit down with America and come up with a mutually acceptable plan that will stop Armageddon. China can be the facilitator.

America can and must pull harder on the financial purse strings as well as the political strings with Chinese chopsticks in order to get America and Iran back together again in a warm embrace.

False Hopes

The global meltdown triggered a $145 billion government stimulus package dubbed Project Lifeline. Project False Hope is more appropriate. The stimulus was created and advocated by the banks that service half of the U.S. mortgage market ─ Bank of America, Citigroup, Countrywide Financial, J.P. Morgan Chase, Washington Mutual and Wells Fargo ─ all members of the so-called Hope Now Alliance. You bet banks are always hoping to be given a lifeline by taxpayers whenever they mess up. And guess who cleans up and pays for the mess? Why should the government repeatedly come to the banks rescue whenever enough of them are in trouble at the same time?

The subprime story is a bad rerun. Nothing new here. It happens repeatedly. New financial instruments and an enthusiasm for risk-taking create dramatic increases in credit, which drive up asset prices thereby justifying still more credit expansion and still higher asset prices. Then comes a top to asset prices and they have to be marked to market. Panic selling followed by a credit freeze results in mass insolvencies and a recession ─ or worse. All the millions of struggling homeowners receive is false hope. Borrowers who have outstanding student or automobile loans and consumer credit will face the same false hope unless real political will to tackle the credit crisis is asserted.

“I was gradually coming to believe that the U.S. economy’s greatest strength was its resiliency ─ its ability to absorb disruptions and recover, often in ways and at a pace you’d never be able to predict, much less dictate,” former Federal Reserve Chairman Alan Greenspan wrote in his book The Age of Turbulence. Wishful thinking by the man who created the mess. Man was he wrong. Now is that any way to manage a monetary policy? Any wonder the financial system is broken and broke?

The Bank for International Settlements said credit default swaps totaling $43 trillion, half the entire asset base of the global banking system were outstanding at the end of 2007. That is reality.

False hope and austerity measures are not the way to correct global imbalances. America needs to export its way back to balancing its books with countries like China and OPEC members increasing their imports from America. It doesn’t make sense and is unsustainable for America, with only five percent of the world population, to continue to consume 30 percent of global resources. Growth and prosperity in the developing world also offer America more export opportunities.

Saudi Love--bin Laden Style

Saudi Arabia bans roses on Valentine’s Day because they are un-Islamic. Now is that any way to portray Muhammad’s love for his women and people? Wouldn’t he have given them a red rose if, in his time, it was the practice to show love?

Muhammad’s youngest and favourite wife, Aisha, vigorously contested the chauvinism of early Muslim clerics. She was the first Islamic feminist.

In 2008, Saudi religious police arrested and prosecuted Fawza Falih who was accused of witchcraft and supernatural occurrences by a man’s claim that he became impotent after being bewitched by her. Witchcraft is considered an offence against Islam in Saudi Arabia. She was sentenced to death.

The House of Saud depends on the most radical southern and eastern clans for their political base. The southern faction is the center of popular support for al-Qaeda and the Taliban because it is the home of the most extreme Muslim sect, the Wahabbis. Ninety percent of the Muslim world rejects the Wahabbi religious tenets as utterly repugnant to the teachings and examples of the prophet as written in the Hadith.

Since most Wahabbis are functionally illiterate, they cannot read about this conflict on their own. Typically they memorize a few passages of the Koran taken out of context, and are unaware of the explanations contained in the accompanying Hadith. The Wahabbis, for example, are taught that Jews are sub-humans and should be killed as a religious duty. In contrast, the Hadith explains that the Prophet Muhammad honoured Jews, married a Jewish woman and forbade forced conversions of Jews, or any religion. He always bowed in respect when a Jewish funeral passed, and promised that good and faithful Jews would go to paradise just as good Muslims and Christians would. He taught that the Jews had their holy place in the west, meaning Jerusalem, while Muslims had their holy place in the east ─ Mecca.

The austere teachings of Mohammad bin Abd al-Wahhab have been prevalent in Saudi Arabia for more than two centuries. The House of Saud owes its control of the fractious tribes of the Arabian Peninsula to the fact that ancestors championed his teachings. Bookshops in Mecca and Medina sell 1,265-page souvenir tomes of his “greatest hits” fatwas or religious edicts. Most are rulings mandating the shunning of non-Muslims: do not smile at them, don’t wish them well on their holidays and don’t call them “friend.” Muslims living in foreign lands are ordered to “harbor enmity and hatred for infidels.” If we didn’t have to fill up our SUVs, would we have to bother with these people? And would these people have enough money to be a bother anyway?

The Saudi royal family and their Wahabbi protagonists have decreed that women cannot work or even sit in the front seat of a car ─ and that includes the Saudi Queen. In contrast, the Hadith records that the prophet worked for his wife, and that she drove her own caravans in international commerce. The prophet forbade racism, whereas the Wahabbis practice it, especially against their non-Arab Shiite minority. The Wahabbis discriminate viciously against women. The prophet, who lovingly raised three daughters, insisted that women should have essentially equal rights in contract, ownership and divorce.

The Arab-Saudi, Wahabbi and Sunni custodians of Islam and Mecca are creating as big a divide in the Middle East as their Texas protectors did in America. They actually fore-wrote it.
Muslim Reformation must do to Islam what the Scottish Reformation did to the Catholic Church: Break the theocratic monopolists. Improving knowledge is about understanding others and improving relations.

Dismayed Land

Hong Kong Disneyland, America’s iconic theme park in China, like America’s iconic financial institutions doing business in China, received a financial wakeup call in late 2007 when they reviewed their year end operating results and discovered they got it wrong and were operating at a loss. Not because of their dealings with the Chinese, but corporate mismanagement, reckless projections, stratospheric expectations and misguided promises ─ by bankers and their government regulators at central banks.

Yet these bankers are rewarded for their misdeeds with handsome severance packages while the regulators continue to espouse and promote deregulation. The global meltdown of 2008, that started with subprime, is the third financial crisis I have experienced in 20 years caused by bankers and their regulators that We the Apathetic Maids repeatedly allow to happen ─ and then pay to clean up the financial wreckage. First there was the savings and loan crisis of 1989, followed by the Enron/Worldcom crisis of 2002 and the grand dame of financial crisis, the global bank run and meltdown of 2008.

The world celebrated Martin Luther King’s birthday in 2008 with a financial fireworks show the likes of which the world has never experienced. First, Federal Reserve Chief Ben Bernanke makes a surprise un-scheduled 75 basis points rate cut after global stock markets collapsed, followed by an announcement by French bank Societe General that it was the victim of a $7.1 billion fraud by a rogue trader ─ the world’s largest. Understandably, financial markets panicked.

The rate cut was too little and to late and further exposed how out of touch Washington policy makers are with the severity and depth of the financial meltdown. The financial dominos were not stopped from falling by the Federal Reserve or the government’s rescue plans. The hastily drawn up “shot in the arm” of between $140 to $150 billion, or about one percent of the US gross domestic product, of tax rebates was the result of panic in the White House at the unraveling of the global financial architecture put in place by America as a component of globalization. Any wonder U.S stocks fell further after Bush’s announcement of his plan to post their biggest weekly drop in five years? That is just the beginning of the panic selling. Some fund managers predict the Dow Jones Industrial Average will plunge to 6,000 points by the end of the year, shedding more than half its value.

No one really knows how bad the subprime crisis is. Losses may soar to $500 billion. The Bank for International Settlements said credit default swaps totaling $43 trillion, half the entire asset base of the global banking system were outstanding at the end of 2007. Total derivatives are estimated to be in the $500 trillion blackhole ballpark. Any wonder financial markets are anxious and politicians in Washington are blamed for the lack of regulation and oversight? Politicians in both parties should be panicked.

America Must Do As It Says

In 1997, during the Asian financial crisis, the U.S. Treasury and International Monetary Fund warned East Asian countries against the risks of bailouts or raising interest rates. Ten years later, America ignored its own past lectures and bought up billions of dollars of bad mortgages and lowered interest rates. This after America managed to pass off hundreds of billions of dollars worth of bad mortgages to banks around the world. Isn’t it time We the Apathetic Maids get career politicians to practice what they preach?

The Fed’s actions cast doubt on the future of paper money. China experimented with paper money 1,000 years ago. As the government printed more and more to fund its own profligacy, people refused to hold it and paper money disappeared from history. The current monetary system ─ paper money with no tangible anchor to back it up ─ is four decades old. As soon as the Nixon administration abandoned the dollar linkage to gold, it led to a severe bout of inflation which was contained by globalization. Inflation is back and can no longer be contained by globalization. It can only be contained by Sino-U.S. interlocalism.

China was able to withstand the subprime crisis and recent global recession that created economic havoc in America because it is no longer dependent solely on America. Furthermore, it has usurped the U.S. as the driver of world growth. The U.S. subprime crisis made Hong Kong the China beachhead for foreign funds. Today China has overtaken the U.S. as the largest seller to the euro-zone and is rapidly doing the same in the Middle East, Latin America, Russia and Africa. Isn’t this a geopolitical partner America should be embracing so that it can also cushion any future global inflationary or recessionary economic disasters?

Responsible Bank Holdings

The Central Bank of China, Asian countries and Arab oil-producing nations account for the bulk of foreign treasury holdings. They are responsible for safeguarding their nation’s wealth and if they allowed the U.S. Federal Reserve to rob them they would be criminally negligent.

To prevent massive sell-offs of U.S. treasuries, leading central banks injected over $300 billion into the financial system and lowered the rates at which they lend to private banks. In America, Citigroup, Bank of America and JP Morgan Chase, the three largest U.S. banks reached an agreement to form an $80 billion fund to help unfreeze the market for short-term debt. The fund is another bad joke given to American taxpayers to again clean up bankers mistakes while we pay for the cleanup job. Warren Buffet said it best. “One of the lessons that investors seem to have to learn over and over again in the future, is that not only can you not turn a toad into a prince by kissing it, but you cannot turn a toad into a prince by repackaging it.”

Marc Faber, the Hong Kong-based publisher of The Gloom, Boom & Bust Report voiced my sentiments in October 2007 when he said: “The Fed feeds its customers with booze, and when they get totally drunk and are about to fall of their chairs, the bartender gives them more booze to keep them going. One day it will lead to the ultimate breakdown” ─ and it did. Those that really need government help are not the banks that created the problem in the first place but the homeowners who are the victims of the banks predatory practices. Why do We the Maids allow the government and its career politicians to save the guilty and punish the innocent?

Austerity measures are not the way to correct global imbalances. America needs to export its way back to balancing its books with countries like China and OPEC members increasing their imports from America.

Reckless Behavior

The subprime crisis is the result of reckless behavior by U.S. banks and negligent career politicians and bureaucrats in Washington. The U.S. Federal Reserve’s larger-than-expected interest cut in 2007 resulted in a sell-off of U.S. Treasury bills and a drop in their value to help bankrupted American homeowners, hedge funds and investment banks. It was a kick in the face to China and other foreigners who own U.S. bonds because rising inflation weakens the dollar. China, like other foreigners, trusted America and built up their safety net by buying American assets and are now being asked to pay for the burst U.S. property bubble.

To make matters worse, the U.S. announced it would “freeze” some subprime loans to help the beleaguered banks amid news that foreclosures rose to a record high. Why do reckless borrowers and their irresponsible lenders have to be bailed out at the expense of We the Apathetic Maids? People and banks should be punished for their mistakes, not rewarded. Otherwise people and institutions that benefit from such protection tend to allow it to influence future decisions and chances are they will repeat their mistakes ─ again at the expense of We the Maids.

The U.S. in effect decided to rob foreigners, including China, to pay for its lending sins. The U.S. current account deficit has been the primary cause of global financial imbalances. Since 2002, the U.S. has been sucking in more than $2 billion a day from China and other countries’ savings to provide easy credit to U.S. consumers that allowed We the Apathetic Maids to spend more than we earned. Foreigners only way to fight back was to sell U.S treasuries which immediately increased bond yields and depressed the U.S. property market and economy.

Sino-U.S. Interlocalism

Wherever I go these days in the world, I encounter numerous Chinese tour groups and individual backpackers, but no Americans ─ the occasional cowboy or lone ranger being the exception. Most Americans I meet pretend to be Canadian.

It is time for the U.S. and Americans to re-assert their global role and presence peacefully ─ proudly come out and spread out onto the world map with their Chinese brothers and sisters and be welcomed with open arms again wherever they go ─ instead of fleeing the world stage like Californians fleeing the periodic infernos that engulf their homes.

Americans should embrace Chinese in the 21st century the way the citizens of Westwego, Louisiana embraced their longtime Chinese-American Sheriff Harry Lee. Thousands, including Hollywood celebrities and a former president, paid their respects to the larger-than-life populist politician with a no-nonsense approach to Louisiana politics during a five-hour viewing of his flag-draped casket.

While the U.S. economy was being battered by the subprime created recession, China’s no-nonsense economic approach achieved its fastest annual growth rate since 1993 in spite of a raft of government measures to control investment and credit growth ─ it grew by more than 11 percent.

Meanwhile, China’s Zhang Zilin was crowned Miss World. She beat 105 other contestants to become the first Chinese winner and the 57th Miss World. Even the contest itself, one of the most-watched events on the planet with a global television audience of more than two billion, has been outsourced from America to China.

China today is one of the richest nations in the world. It holds the largest amount of foreign exchange reserves in the history of mankind. China’s economy is forecast to surpass America and Japan to become the world’s largest economy by 2025 or earlier.

Any wonder China’s rise has brought with it a more assertive approach in dealing with America? This was reflected in the November 2007 Kitty Hawk incident, when China refused to let the Kitty Hawk and eight accompanying ships to make a port call in Hong Kong, to underline its unhappiness over America’s recognition of the Dalai Lama and advanced arms sales to Taiwan. America can no longer take for granted that its military ships have the right to make port calls on Chinese territory.

The U.S. retort of sending the carrier group through the tense waters between the mainland and Taiwan, the first by a U.S. aircraft carrier since 2002, only further angered and alienated Beijing.

It is time Americans recognize and start seriously thinking and doing something about the real economic cost of the U.S. government’s determination to remain the world’s sole shaky and badly bruised superpower ─ at U.S. taxpayers ever increasing expense. Why not share the burden with a willing and reliable partner?

America’s global standing in world opinion is at an all time low. One does have to ponder why America, a country with the most powerful military and intelligence machines in human history, got it wrong on Iran and Iraq and is unable to restore order and democracy in Iraq after more than four years of occupation. America has lost the trust and global leadership role it coveted so much. Americans have to re-calibrate America if it is to regain its leadership role and support for its views and policies.

If America fails to embrace China as its strategic partner in the 21st century to create a joint dollar-yuan pegged basket of their currencies and also form a Sino-U.S. interlocal geopolitical partnership, America will be booted off the world stage the same way America’s national pastime ─ baseball ─ was booted off the Olympic games.