(For previous posts in this series, see here.)

The most basic problem with almost any religion is the fact that they raise ‘faith’, which is the irrational acceptance of things in the absence of, or even counter to, credible evidence and reason, to the level of a virtue. This is simply asking for trouble. Once you have said that you believe something just because some book says so or some inner voice tells you to do so, you have lost all standing to condemn others whose own inner voices (or the voices of their priests, rabbis, or imams) tell them to do unspeakable acts in the name of obeying god’s will.

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Dean Baker (co-director of the Center for Economic and Policy Research in Washington, DC) argues that the US is heading towards a recession, if not already in one, and he says that the main cause is the collapse of the housing bubble and not the spending on the Iraq war, though that is not helping either.

The villains in this story are the economists who somehow couldn’t see an $8 trillion housing bubble, the banks that fueled the bubble with bad and often predatory loans, the regulatory institutions that did nothing to prevent the growth of the bubble and the spread of predatory loans, and most of all, Alan Greenspan and the Fed who blessed the whole thing.

We have to hold these folks responsible for their bubble economics. The best place to start would be to remove them from positions where they are still making economic policy.

On Tuesday, we saw the Federal Reserve decide to pump $200 billion into the financial system to try and alleviate the crisis and it sent stock prices soaring that day.

I didn’t understand exactly what they did or how it was supposed to work because the news was reported in a very obscure way. Fortunately for people like me, in another article Baker explains clearly what is going on here and argues that the media is not characterizing this action for what it really is: a federal bailout of the banks that were partly responsible for this mess.

Can’t the media find any economists who don’t think that handing hundreds of billions of taxpayer dollars to the big banks and the incredibly rich people who own and manage them is a good idea? Apparently not, given the coverage so far to the Fed’s proposal to lend $200 billion to the banks using mortgage backed securities as collateral.

The workings of the Fed and the financial markets can appear complicated, so let’s simplify matters a bit to make it more clear what is going on here. Suppose that it was suddenly discovered that much of the wealth held by the country’s leading financial institutions was in fact counterfeit. Instead of having hundreds of billions of dollars of real currency in their vaults, institutions like Citigroup, Merrill Lynch, and Bears Stearns actually had hundreds of billions of dollars of counterfeit currency. Suppose further that the public did not know exactly who held what in terms of counterfeit currency, only that all of them had a lot of it. (The point here is that these banks hold mortgage backed securities, many of which are only worth a fraction of their face value, and therefore can be viewed as the equivalent of counterfeit currency.)

In such circumstances, investors would be very reluctant to accept the credit of any of the major financial institutions. They couldn’t know whether most of their assets were in fact counterfeit, and they were dealing with a bankrupt institution, or whether the counterfeit currency was only a limited share of the wealth, which would not jeopardize the institution’s ability to meet its obligations.

This is in fact the credit squeeze that we’ve have recently witnessed. The spread between the interest rates on a wide variety of assets and the interest rate on safe assets (U.S. government debt) has soared. As a result, the Fed’s effort to stimulate the economy, by lowering the federal funds rate, has been largely unsuccessful because other interest rates have remained high.

In response to this situation the Fed today announced that it would lend $200 billion to banks and other financial firms, accepting mortgage backed securities as collateral. This is effectively the same as saying that the Fed is going to lend money to banks and accept the counterfeit currency as collateral, treating it just as though it were real money.

The intended effect of this policy is to convince other investors that the counterfeit currency is in fact real currency, or at the very least that there is a really huge sucker out there (the Fed) which is prepared to treat the counterfeit currency as real currency.

So how does this story play out? Well, insofar as the Fed is successful, the counterfeit currency retains its value for a while longer. This allows Citigroup, Merrill Lynch, Bears Stearns and the rest of the big boys more time to dump their counterfeit currency on suckers who haven’t figured out how the game is played.

It is possible that they won’t be able to find enough suckers, in which case these banks will end up defaulting on their loans and the Fed (i.e. the government) has lost tens or hundreds of billions dollars paying good money for counterfeit currency. Alternatively, perhaps the big boys are successful and can offload enough of their counterfeit money to restore themselves to solvency before the music stops. Then the Fed is repaid, but the counterfeit money now sits in the hands of other, less informed, or less inside, investors.

You should really read the whole of this excellent article.

Baker shows how once again, we have the Federal Reserve colluding with the government to use taxpayer money to protect and enrich the wealthiest people in the country.

POST SCRIPT: The work of Satan

Almost everyone has had encounters with those annoying little plastic containers of milk that always seem to squirt onto your clothes when you try to open them. Stephen Fry and Hugh Laurie deal with this menace appropriately.

In the current race for the presidency, it has become clear that among the candidates who might be suitable, the Villagers are supporting Hillary Clinton and Barack Obama on the Democratic side and Mitt Romney, Rudy Giuliani, and John McCain on the Republican side. All of them have made the proper obeisance to the Village gods.
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It is hard to understand American politics without having a clear idea about the nature of how power is controlled and the important decisions made.

The first step to understanding is to not take seriously divisions along the lines of Democrat-Republican or liberal-conservative or left-right. While such terms may be useful in limited contexts, they are mostly used to distract people from seeing the real action, similar to the way that magicians Penn and Teller distract you without you even realizing it so that you do not see how the trick is really done. A good example of issues that are meant to distract was the infamous Terri Schiavo affair. (This is why I always say that it is not the things that politicians strongly disagree about to which we should pay close attention but the things that they agree on.)
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(Please see here for previous posts in this series.)

One of interesting things about evolution is that it seems to be speeding up with time. Earth was formed about 4.7 billion years ago and it took about a billion years for the first single-celled life to appear about 3.5 billion years ago. It then took another 2.5 billion years for the first multi-cellular life form (like sponges) to appear. So everything else, all the insects, animals, and birds, came into being within the last one billion years or so.
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If you read some of the more thoughtful analyses of the reasons behind the 9/11 attacks, you may have noticed repeated use of the word ‘blowback’. Some may not be aware that this word is used by the CIA to denote the consequences that its covert activities abroad might cause, and the disasters they might someday bring down on the US.

The idea that one’s actions have repercussions is perfectly sensible. It is absurd to think that US foreign policy, especially when it is used aggressively and militarily and covertly to interfere in the internal affairs of other countries, will not give rise to opposition and antagonism that may manifest itself in unexpected and unconventional ways.

This rational view of how actors behave on the world stage is excoriated by those demagogues in the media (by which I mean the major political leaders and pundits) who prefer to couch foreign policy debates in simple dualistic good-and-evil terms, and to suggest that the ‘evil they’ hate the ‘good us’ simply because of our virtue.

The word ‘blowback’ and its associated meaning moved from the murky clandestine world and entered the popular culture when it was used as the title of an influential book Blowback: The Costs and Consequences of American Empire published in 2000 by Chalmers Johnson. Johnson is a former CIA consultant and a professor of Asian studies at Berkeley, and was an avowed cold-war warrior during the Vietnam war era.

Johnson has now written a very interesting article titled Evil Empire: Is Imperial Liquidation Possible for America? on the current state of affairs. The whole article is quite long but well worth reading but here are some excerpts:

The United States, today, suffers from a plethora of public ills. Most of them can be traced to the militarism and imperialism that have led to the near-collapse of our Constitutional system of checks and balances.
. . .
If these people actually believe a presidential election a year-and-a-half from now will significantly alter how the country is run, they have almost surely wasted their money. As Andrew Bacevich, author of The New American Militarism, puts it: “None of the Democrats vying to replace President Bush is doing so with the promise of reviving the system of check and balances…. The aim of the party out of power is not to cut the presidency down to size but to seize it, not to reduce the prerogatives of the executive branch but to regain them.”

George W. Bush has, of course, flagrantly violated his oath of office, which requires him “to protect and defend the constitution,” and the opposition party has been remarkably reluctant to hold him to account. Among the “high crimes and misdemeanors” that, under other political circumstances, would surely constitute the Constitutional grounds for impeachment are these: the President and his top officials pressured the Central Intelligence Agency to put together a National Intelligence Estimate (NIE) on Iraq’s nuclear weapons that both the administration and the Agency knew to be patently dishonest. They then used this false NIE to justify an American war of aggression. After launching an invasion of Iraq, the administration unilaterally reinterpreted international and domestic law to permit the torture of prisoners held at Abu Ghraib prison in Baghdad, at Guantánamo Bay, Cuba, and at other secret locations around the world.

Nothing in the Constitution, least of all the commander-in-chief clause, allows the president to commit felonies. Nonetheless, within days after the 9/11 attacks, President Bush had signed a secret executive order authorizing a new policy of “extraordinary rendition,” in which the CIA is allowed to kidnap terrorist suspects anywhere on Earth and transfer them to prisons in countries like Egypt, Syria, or Uzbekistan, where torture is a normal practice, or to secret CIA prisons outside the United States where Agency operatives themselves do the torturing.

On the home front, despite the post-9/11 congressional authorization of new surveillance powers to the administration, its officials chose to ignore these and, on its own initiative, undertook extensive spying on American citizens without obtaining the necessary judicial warrants and without reporting to Congress on this program. These actions are prima-facie violations of the Foreign Intelligence Surveillance Act of 1978 (and subsequent revisions) and of Amendment IV of the Constitution.

These alone constitute more than adequate grounds for impeachment, while hardly scratching the surface.

It is a measure of how weakened the Congress has become that it has failed to seriously consider impeachment of the President despite having a very strong case for doing so. Only Congressman and Democratic presidential candidate Dennis Kucinich has made any moves to at least impeach Vice President Cheney.

POST SCRIPT: The flourishing of nonsense

Not heard about best selling self-help book The Secret? These two funny guys from Australia explain what it is all about and take the correct attitude towards it. (Thanks to Onegoodmove.)

One reason that religion is a negative influence in society is that it enables other evidence-free beliefs to flourish in its wake, because it creates a climate where vague mystical and supernatural forces are given credibility. How else can one explain the vast numbers of people who take stuff like The Secret seriously?

Materialists can dismiss this stuff as nonsense because it invokes some mysterious and unknown agency that intervenes in the world in response to human requests. But on what basis can someone who believes in a personal god do so, even if they wanted to? Isn’t The Secret based on prayer and faith, just like religion?

In the previous post, I briefly described the political and social crisis that China faced in Confucius’ time due to the gradual breakdown in social order due to the erosion of a sense of tradition and custom and sense of propriety. Confucius was dissatisfied with the two opposite responses that were being suggested to deal with the problem. The Realists approach was to use force to create order, exploiting the ability of the ruler to deal out rewards and punishments. The Mohists said that you had to teach people to love all equally. Confucius felt that to ignore the special affection that one felt for one’s own family was unrealistic. In this he was prescient in that modern evolutionary theory argues that natural selection does indeed result in one having special feelings to those to whom one is related, with the feelings getting stronger the closer the people are related.
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In previous posts, I wrote about how to talk to the devout concerned believer, the devout offended believer, and the fundamentalist religious intellectual when you tell people you are an atheist. Today I will deal with the last case.

The liberal or moderate believer: The hardest group for the atheist to deal might be, strangely enough, the people who are religious believers of the ‘moderate’ and ‘liberal’ variety. This may seem odd because such people tend to be rational and scientific about almost all aspects of their lives, so one would think that it would be easy to have a dialogue with them. But we know that often the most severe disagreements and arguments occur within families or like-minded groups, mainly because we understand each other so well and know each other’s weaknesses.

The reason for the awkwardness between atheists and liberal or moderate religious people arises for the same reason. Most people grow up with the same beliefs as their families and their communities. Once you become an atheist, the scales fall from your eyes and you realize that many of the religious beliefs you used to cherish make no sense at all anymore. But the rest of your views and values have not changed much and the people around you still are the same. So you have the difficult challenge of trying to understand how you could have unquestioningly believed all this stuff for so long and also why the people around you still continue to do so.

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You would think that experienced career politicians would have some sense of how to avoid saying things that gratuitously insult people. And then you read things like this:

Former Wisconsin governor and Republican presidential hopeful Tommy Thompson told Jewish activists Monday that making money is “part of the Jewish tradition,” and something that he applauded. 

Speaking to an audience at the Religious Action Center of Reform Judaism in Washington D.C., Thompson said that, “I’m in the private sector and for the first time in my life I’m earning money. You know that’s sort of part of the Jewish tradition and I do not find anything wrong with that.” 

Thompson later apologized for the comments that had caused a stir in the audience, saying that he had meant it as a compliment, and had only wanted to highlight the “accomplishments” of the Jewish religion.

Much attention has been focused on Thompson’s casual invocation of the stereotype of Jews as being focused on money and being surprised that his audience did not receive it as a compliment.

But there is another offensive idea in this passage that I hear repeatedly and which has not been remarked upon, and that is his assumption that people who occupy high government office don’t make any money worth speaking of, and only begin to do so when they leave government service and enter the private sector. Surely most people would find this offensive? After all, this person was the governor of a big state and also the US Secretary of Health and Human Services. In both those jobs he would have been paid a salary and obtained perks that almost everyone else in this country can only dream of. But for Thompson and others like him, that is nothing. And what is worse, they act like they have sacrificed on our behalf when they take on these high paying jobs.

Yes, it is true that they probably make much more money when they move to the private sector and exploit the contacts they developed while working in government. But what they get paid as high government officials is still not peanuts and it is a slap in the face to those who earn much less to act as if it were nothing.

Very, very few people will make as much money as Tommy Thompson in either of the two jobs whose salary he disdains. Surely he cannot be oblivious that he earns more than the vast majority of Americans, and when compared to the rest of the world, where poverty is rampant, must rank in the very top tier of income earners. So how is it that a career politician like Thompson can be oblivious to the effect of his words?

Former Speaker of the House of Representatives and potential presidential candidate Newt Gingrich provides another example of obliviousness. He recently caused a fuss when he seemed to imply that Spanish was the language of the ghetto. He then tried to make amends by saying (in Spanish) that what he was really trying to say was that you really needed to learn English if you want to succeed in America.

Really? He thinks that this is news to people? Gingrich painfully spelling this out indicates that he thinks that Hispanics are too stupid to have figured this out by themselves. Of course everyone in America knows that knowledge of English is necessary to advance in almost any aspect of life. The real issue is why this knowledge and awareness does not always get translated into concrete action.

I similarly cringe when politicians preach to children that success in school will lead to better lives. Do they think that these students don’t realize this? Have they never talked to these children? Have they never read any of the research on what students’ views on education are? Children know that high levels of education usually results in a better standard of living. They just don’t act on this knowledge. Again, the real question is why their awareness does not manifest itself in appropriate actions.

And then there is John Edwards. Here he is, from a very poor family background, running for president on a platform that is about the two Americas, the rich and the poor, and the need to be sensitive to the needs of those less fortunate. And then he goes and gets a $400 haircut, for which he has been roundly criticized.

How is it that experienced politicians do not realize how such words and actions might rub people the wrong way? Perhaps it is because they have no real conception about how most people live. Thompson’s world, the people he hangs out with, is probably that of corporate CEOs and other wealthy people and that is the kind of money that he thinks he too deserves to earn. Gingrich’s world is that of successful English speakers who cannot conceive of why other people might not aspire to be like them. John Edwards probably moves among people for whom such expensive haircuts are standard. Laura Bush apparently spends $700 to get her hair done, so I am guessing that these people don’t go to Best Cuts.

None of these things necessarily reflect on how well they might perform in office and should not be overanalyzed. But they do indicate a curious obliviousness to how they might be perceived.

If they really moved around with the people they claim to represent, they might not speak or act so objectionably.

POST SCRIPT: Must-see TV for media watchers

Bill Moyers has a special that examines the media’s complicity in selling the Iraq war under false pretenses. It airs on PBS stations on Wednesday, April 25 at 9:00 pm (check your local listings).

Editor & Publisher says of the program:

The most powerful indictment of the news media for falling down in its duties in the run-up to the war in Iraq will appear next Wednesday, a 90-minute PBS broadcast called “Buying the War,” which marks the return of “Bill Moyers Journal.” E&P was sent a preview DVD and a draft transcript for the program this week. While much of the evidence of the media’s role as cheerleaders for the war presented here is not new, it is skillfully assembled, with many fresh quotes from interviews (with the likes of Tim Russert and Walter Pincus) along with numerous embarrassing examples of past statements by journalists and pundits that proved grossly misleading or wrong. Several prominent media figures, prodded by Moyers, admit the media failed miserably, though few take personal responsibility.
. . .
Phil Donahue recalls that he was told he could not feature war dissenters alone on his MSNBC talk show and always had to have “two conservatives for every liberal.” Moyers resurrects a leaked NBC memo about Donahue’s firing that claimed he “presents a difficult public face for NBC in a time of war. At the same time our competitors are waving the flag at every opportunity.”
. . .
At the close, Moyers mentions some of the chief proponents of the war who refused to speak to him for this program, including Thomas Friedman, Bill Kristol, Roger Ailes, Charles Krauthammer, Judith Miller, and William Safire.
. . .
The program closes on a sad note, with Moyers pointing out that “so many of the advocates and apologists for the war are still flourishing in the media.” He then runs a pre-war clip of President Bush declaring, “We cannot wait for the final proof: the smoking gun that could come in the form of a mushroom cloud.” Then he explains: “The man who came up with it was Michael Gerson, President Bush’s top speechwriter.

“He has left the White House and has been hired by the Washington Post as a columnist.”

You can see Bill Moyers being interviewed by Bill Maher and a preview of the program here.