RANDOLPH BRANDT: How Wall Street sunk your house

By Randolph Brandt

A couple of years ago – before the nation’s financial collapse in the final days of the Bush administration – I ran into a now-former Racine mayor, who shall remain nameless, but he was coming out of a bar.

I’d met this mayor a couple of times before, so I felt emboldened enough to mention to him that I was a little concerned that the tax assessment on my relatively modest home had just been increased exponentially, on top of a similarly exponential increase the year before.

“Complain to me when your assessment (and hence, its value) goes down,” the then-mayor replied.

Well, that mayor’s not in office anymore, but a letter this week from the city assessor notified me that my tax assessment finally did go down — by a little more than 2 percent — at a time when I read on Racine Post that housing values may actually be down by as much as 25-30 percent in Racine.

Thanks a lot. By that measure, I’m 2 percent ahead, but 30 percent behind.

It’s my bet you are, too.

The new bunch in City Hall probably will make up the difference in tax revenue with a higher tax rate anyway; meanwhile, there are nearly a dozen homes still on the market in my neighborhood, unsold for many months, despite the “price reduced” addendums tacked onto all the real estate signs.

Whether you’re a Tea Partier or not, it’s time to complain about this situation, and demand financial reform.

How did this happen? How did the largest personal investment in my portfolio — my home — suddenly become unmarketable, or at least only marketable at a significantly reduced price that’s considerably less than I’d been counting on to help pay for my retirement?

Rather than ask the new mayor again (which probably wouldn’t help anyway), I ‘d like to ask Goldman Sachs instead.

There are lots of people in line to ask questions of Goldman Sachs, including several congressional investigatory panels and the newly empowered Securities and Exchange Commission, so I don’t really expect any direct answers from Goldman Sachs anytime soon.

Right now, they’re just denying everything, insisting only that they’re not crooks.

So, I’m left to figure out this major nationwide financial collapse myself.

The explanation goes something like this:

Unlike the stock market, much of the bond market is virtually unregulated by the SEC. Therefore, entities such as Goldman Sachs and other “investment” banks are basically free to invent exotic derivatives to bring to market based on extremely questionable investments, such as packaged, worthless subprime mortgages, and to sell them to unsuspecting retirees and other investors, like you and me.

Since there’s currently no meaningful federal regulation prohibiting this type of fraud, they just went ahead and perpetrated it.

They also knew from the get-go that because they control so much of the nation’s wealth, they ultimately would be deemed “too big to fail,” and that no matter what the risks, the federal government would have no choice but to bail them out or face the country’s financial ruin.

It’s just another example of audacity, not of hope, but of hubris – powerful financial manipulators convinced that no matter what their decisions, there would be a private return for them shielded by socialized risk for everyone else.

If they were right, they’d get rich beyond avarice. If they were wrong, no matter – the rest of the people would have to pay them off anyway.

But it gets even worse. Not only did these Wall Street investment houses knowingly sell worthless bonds to millions of people, but at the same time, they placed alternative bets for themselves —called shorts — expecting those supposedly “triple-A” bond investments they sold to everybody else to fail, so they’d stand to reap billions either way, win or lose.

So, they made money on you and me by knowingly selling those worthless bonds on the open market, while at the same time, they were betting against the bonds’ performance on a private, secret market that is, unlike common stocks, unregulated by the federal government.

They simply couldn’t lose in this rigged game, but you and I did. It caused the housing market to collapse and along with it, the rest of the economy as well.

Back in the day when the mob ran the numbers racket, people would bet on a number, like 1-2-3, based on the possible finishers at the track, and the number would pay off or not, depending upon how well somebody happened to pick the winner.

But nobody anywhere in the chain really knew for certain which horses would finish in which order, so at least the game was, more or less, honest.

If the action on any one number sequence got too great for one bookmaker to risk, they’d simply “lay off” a portion of the bet to other bookies, just in case somebody got so lucky on a big score that a single bookie couldn’t handle it all.

Wall Street, in this instance, did just about the same thing. Goldman Sachs “laid off” the betting action to certain preferred accomplices, hedge fund operators who helped design the scheme.

The only difference between the mob and Wall Street in this instance, however, was that while the mob never really knew which horses would actually win at the track, the hedge fund operators already knew which horses in their packaged securities were lame. They knew the bad bonds from the good ones, and they helped Goldman Sachs pick the bad ones to sell to unsuspecting investors.

They already knew that the “favorite to show” would come in dead last, but they sold people tickets to win anyway, while secretly betting against the favorite themselves.

Whereas such “fixes” among numbers runners would have earned you a pair of cement shoes in the Hudson River or a shallow grave in the Pine Barrens of New Jersey, the same standard of dishonesty among the Wall Street mob now earns you millions of dollars a year in preferred bonuses.

That’s fraud, and that’s what the Obama administration wants to punish now and prevent in the future.

Ironically, the mores of the mob were, in comparison, more pristine than those of the current syndicates on Wall Street.

If that’s not a clarion call for financial reform, nothing is.

(Randolph D. Brandt is a retired newspaper editor living in Racine, Wis.)

Commentary: Here’s an old-fashioned idea: Pay for the war

By Randolph Brandt

Despite all the noise to the contrary, our great entitlement programs, Social Security and Medicare, actually pay for themselves, as would the pending health care reform bill.

Indeed, with the exception of the exceptional emergency efforts to bail out the economy in the closing months of the Bush administration and the first days of Obama’s, pretty much all the rest of our typical domestic needs remain pay as you go.

What doesn’t pay for itself is our war against terrorism and our military incursions into the Middle East and Afghanistan.

No, we’ve been borrowing every dollar to fight those wars for more than eight years, and all those hundreds of billions of dollars have been off budget, off the books, and a straightaway mainline injection of colossal debt shot so far into the body politic that there’s no conceivable cure in sight.

It wasn’t always like that. Our last “Good War,” World War II, was good in many ways, not the least of which is that we actually paid for it. We did that in large measure with increased taxation, with marginal tax rates of up to 94 percent, though the average percentage was closer to 20.

And, yes, we borrowed some, but mostly we borrowed it from ourselves, via liberty bonds sold in great campaigns to the American public. In that way, everyone was seriously vested in the war, and the payback from those bonds went into the pockets of Americans, who used it after the war to fuel the greatest economic expansion in the history of mankind.

We paid for World War II in blood and treasure, but it was the treasure part that paid back many times over for American business, industry, workers and their families.

Then, somehow, after those heady postwar years, we got the idea that we could just fight our wars on the cuff.

President Johnson encountered that public reality during one of our longest, most expensive wars, Viet Nam. Though he first tried to make the war a pay-as-you-go venture, so much opposition built up that he finally gave up on his tax surcharges and austerity measures, especially after people wouldn’t even let him close the Post Office on Saturdays to save money.

So, we printed more money instead, triggering the greatest decade of inflation since the Revolutionary War.

We won the Cold War mostly on borrowed money, too. President Reagan cut taxes but ballooned defense spending at the same time, hoping to drive the Soviet Union out of business. After a fashion, it worked.

We may not have been all that much stronger than the Russians in the beginning, but we did have better credit, so we just outspent them until their Soviet Union collapsed in bankruptcy, trying to keep up with us.

But it left us with the beginnings of the crushing national debt that’s plagued our country for three decades.

We’ve been fighting in the Middle East for nearly a decade, spending tens of billions of dollars — soon to be trillions — in borrowed money, while just putting the tab on a federal credit card, whose bills will come due for the next generation, and the generation after that.

But it’s even worse this time. It’s not only that we’re borrowing all that money, but also who we’re borrowing the money from.

We’re not borrowing it from American citizens this time, but from our erstwhile enemies, the communist Red Chinese.

So, for the foreseeable future and beyond, all the principal and interest that finances the wars we’re unwilling to pay for now will be going to our greatest international competitor, The People’s Republic of China, fueling its next greatest economic expansion in the history of mankind, instead of ours.

It’s also a pretty sure bet that the Chinese aren’t terribly disappointed that we’re exhausting the fighting effectiveness of our military at the same time we’re sacrificing our economic future, all the while contributing mightily to the stupendous growth of their military and economic might.

Perhaps the Chinese will never boast, as the Russians did, that they’ll bury us, but we’re certainly putting them in the position to be able to bankrupt us, much as we did the Soviets.

There is a solution.

For a millennium, the West has been invading the Middle East, whether to liberate the Holy Land in the Middle Ages, fill the power vacuum of the failed Ottoman Empire after World War I, secure the Suez Canal after World War II, or to make sure oil supplies reached the rest of the world in the 1990s and 2000s.

We’re no different, so let’s reach back into history for a possible answer.

During the Crusades, the West financed its wars in the Middle East with what was called the “Saladin Tithe.” That was a 10 percent tax on income named after Saladin, the fundamentalist Muslim holy warrior who vexed the West by trying to drive the Christian Crusaders out of Iraq, Syria and the rest of the Holy Land.

Everybody paid the Saladin Tithe, except those who “took up the cross” to fight in the Middle East, and their families.

Maybe we should consider the same thing, but this time, we’ll call it the bin Laden tax. Think about it; it even rhymes: — Saladin, bin Laden.

Let’s say, everybody pays an additional 10 percent on income and/or transactions for the bin Laden tax, except soldiers who take up the cross, or Jesus rifles, as the case may be. They pay enough just by being willing to go.

The rest of us, though, should be willing to pay for the wars.

So, instead of organizing anti-war protests or Tea Parties, we all ought to gather in front of Rep. Paul Ryan’s office in Racine for a “pay for the war” rally, insisting that our local representative come up with a plan to actually pay for the war, so that we no longer finance our former and future enemies in order to battle our current ones, and so to strengthen the United States of America, for ourselves and our posterity.

(Randolph Brandt is a retired newspaper editor in Racine, Wis.)

Randolph Brandt: Being noble about Nobel

By Randolph D. Brandt

The president of the United States wins a Nobel Peace Prize, and the opposing party mocks him.

The whole world is embracing the kind of openness this president is proposing, a chance to settle conflicts rather than simply jumping in unilaterally to kill and alienate more people.

The Peace Prize has been awarded to American presidents only on several rare occasions.

Once, to President Theodore Roosevelt – ironically, perhaps our most warlike president – for trying to settle the Russo-Japanese War.

Again, to President Woodrow Wilson, whose map for world peace also was scuttled by the opposing party in Congress; thus, instead of peace, we wound up with yet another global war, World War II, the worst one ever.

Again, to former president Jimmy Carter, in a better-late-than-never endorsement of a hope for a more peaceful Middle East.

And now, to President Barack Obama, who’s at least willing to talk to Turks, Armenians, Cubans, Russians, Chinese, Koreans, Iranians and others, and to take the hugely symbolic step of delivering a speech in Arabic.

The rest of the world cries out for the traditional leadership offered by the United States of America. They know that at our best, we stand for a more rational, more peaceful and democratic world. This is a reason, for all of us, to be proud.

So let’s be at our best, rather than at our worst, and refrain from mocking a potential presidential peacemaker, solely for the sake of domestic politics.

When we do otherwise, we appear to the rest of the world as ignorant bullies, just like the old bunch of would-be world dominators who chose to kill millions rather than seek peace and justice.

There is a common thread here. Foreign policy used to stop at the water’s edge. Nixon could go to China. Reagan could dissemble the Soviets.

We now owe that same kind of bipartisan backing to President Barack Obama.


(Randolph Brandt is a retired newspaper editor in Racine, Wis.)

Commentary: Top Ten Reasons for Health Reform

By Randolph D. Brandt

No. 10: Insurance companies will post their rates and services all together online so people can pick the best policy for themselves.

No. 9: Businesses that provide benefits for their employees will be rewarded, businesses that drop benefits for their employees will be penalized.

No. 8: Pretty much everybody will be able to keep the health insurance they have if they like it.

No. 7: People can take their health insurance with them if they change jobs or lose their job.

No. 6: Insurance companies can’t drop you from coverage if you get sick.

No. 5: Insurance companies can’t deny you insurance in the first place if you’re sick.

No. 4: Insurance companies can’t discriminate against people in their rates if they have a "pre-existing condition."

No. 3: Medical record keeping will be computerized so doctors can see which treatments work and which treatments don’t work, and avoid mistakes.

No. 2: Insurance companies and drug companies will reduce their rates by billions of dollars.

No. 1: Pretty much everybody will finally have health insurance.

(Randolph Brandt is a retired newspaper editor living in Racine, Wis.)

Commentary: Socialized medicine (and sarcasm) looms

By Randolph D. Brandt

The Federal Government is about to force the American people into a massive experiment in socialized medicine with rationed health care and unpredictable results.

And it will cost billions of dollars, all of which will be added to an already out-of-control federal deficit.

Without asking the voters, the government is about to allocate 200 million doses of swine flu vaccine based on the recommendations of a government death panel that’s already decided old people are expendable and won’t get the vaccine.

And what does this decision say about our free-market health care system? Everyone knows that the most efficient allocation of health care is delivered by our current system of private, independent insurance companies providing necessary health care to working people with benefits or to anybody else who can afford to pay for it, so long as they aren’t already sick.

So, why are we circumventing this proven system that’s given us the best health care in the world in favor of a government option that will provide freebie swine flu shots to children, young people and a lot of illegal aliens?

This epidemic started in Mexico. It should be Mexico’s problem. Everybody who wants a flu shot in America ought to be required to certify their citizenship so that any illegal aliens will be forced back across the border into Mexico to get their shots.

It’s a chance to rid our country of this growing pestilence on the body politic, literally and figuratively, one way or another.

Also, isn’t it just a little suspicious that this latest version of Obamacare puts pregnant women at the top of the list for inoculations with a vaccine that’s probably laced with themosal, boosting the odds of birth defects?

It’s just a liberal plot to increase the number of federally funded abortions, I tell you.

Now, I know Obama says flu season is close and time is short, but he lies.

There’s no reason to rush into a system of government-sponsored, socialized medicine and rationed care just because Obama declared it a legislative priority this session.

No, it’s time to scrap this plan and start all over from scratch to build a vaccination plan that truly fits the needs of the American people.

If you like your current vaccination plan, you can keep it, just the way things are now. It’s your choice, a private decision between you and your doctor. Why take chances on an unproven socialist plan for mass inoculations just because some liberal Nazis claim it’s a better for everybody?

Remember the last time the Federal Government tried to inoculate us all against swine flu in the ‘70s? Hundreds, maybe thousands of people were paralyzed with Guillain-Barre syndrome.

Next, they’ll probably try to put fluoride in the water.

No, you can’t afford to have government mess with your health care.

We should, at the very least, leave it up to each individual state to decide whether there’s a real threat of swine flu in their jurisdiction, so they can develop their own decentralized plan to deal with a nationwide epidemic. If one state blows it and the rest get infected, well, we all know the price of freedom comes high.

Besides, who’s going to pay for all these federal vaccinations? You and me, of course, with a tax increase, no doubt.

Why should you and I pay for other people’s vaccinations? We’ve worked hard. We’ve got insurance, or at least we can afford to pay $20 a pop for swine flu vaccinations for our own families.

Health care shouldn’t be rationed only for health care workers, children and pregnant women and people with chronic illness or their caretakers.

Anybody who can pay should be at the front of the line. It’s the American way.

If there are 50 million or so other people who somehow failed to pull themselves up by their bootstraps and now don’t have insurance or can’t afford a swine flu shot, well, that’s their problem.

OK, OK, so our hospital emergency rooms will be filled this winter with lots of sick people who otherwise, with a little preventive care, could have avoided adding billions of dollars to our national health care bill.

So what? That’s the way the system’s always worked.

And after all, we already have the best health care system in the world, don’t we?

(Randolph Brandt is a retired newspaper editor living in Racine, Wis.)

Commentary: Racism colors the debate

By Randolph D. Brandt

Jimmy Carter’s right.

Recent attacks on President Barack Obama for his supposed freewheeling, wasteful government spending echo all the old arguments of Southern redeemers, who after the Civil War labeled all integrated state governments “carpetbaggers and scallywags.”

“Wasteful,” they cried, as the new black-white political coalitions introduced the first public education in the South.

Worse, it was supposed to be integrated education, open to all, whites and blacks.

“Corrupt,” they said, of the new governments, as the former Rebels sought to reinstitute the rightful (white) leadership back into state legislatures, governorships and Congress.

The very thought that black representatives could administer the public weal was simply reprehensible.

Thus, we wound up instead with disenfranchisement of black voters, segregation, black codes, the convict labor system and Jim Crow.

Now, the country faces the same dilemma. Somehow this very clever black man has tricked America into giving him a majority of the country’s votes, even though, deep down, all good, white Americans know he is a usurper who’s somehow managed to steal the country from its rightful political heirs.

Why, it’s the world turned upside down.

These instincts run deep in America’s psyche, North and South, though as a southerner, Jimmy Carter is particularly attuned to the old code words and their insidious innuendo.

“You lie,” says the gentleman from South Carolina.

Of course.

He could think nothing else of an uppity black man, a pretender as president, when everyone knows only a white man’s really qualified for that position.

"That racism inclination still exists, and I think it's bubbled up to the surface because of belief among many white people -- not just in the South but around the country -- that African-Americans are not qualified to lead this great country,” Carter said. “It's an abominable circumstance, and it grieves me and concerns me very deeply."

So, many will chose to reject better health care, economic recovery, peace abroad, prosperity at home, rational immigration policy … and they’ll sit on their hands, maybe even shout out, because they just don’t like the color of the man’s skin.

(Randolph Brandt is a retired newspaper editor in Racine, Wis.)

Commentary: Taxing our way to better health

By Randolph Brandt

Cigarette smoking is estimated to cost upwards of $72 billion dollars a year in added health care costs nationally, so it seems appropriate that the state of Wisconsin will now try to recover some of that cost by boosting state taxes to $2.52 a pack with the new state budget.

Cigarette smoking, though addictive, is second only to the cost of automobile accidents in terms of health costs associated with voluntary behavior.

Auto accidents cost upwards of $165 billion in additional health care costs per year, somewhat more than twice the cost of cigarette smoking.

Now, it’s easy to see that driving, whether by car or truck, really is essential to the national economy. Most of our food and other necessities of life move by truck these days, and despite the generous government subsides for mass transit, practically everybody still relies on their automobile to get to work.

But a significant portion of our driving is merely for pleasure, and that simple pleasure adds billions to our health care bill each year.

Thus, perhaps it would be appropriate to consider a new tax of $2.52 per fill-up for all personal cars in the two weeks surrounding the major travel holidays of Memorial Day, the Fourth of July, Labor Day and Christmas.

Certainly it would help cover the otherwise avoidable health-care costs of deaths and injuries sustained on or about those peak pleasure-driving periods. If nothing else, the additional tax money could go toward the cost of supporting blood banks, which routinely canvass the populace around these peak pleasure-driving times to cover the shortfall of desperately needed blood and plasma for accident victims injured during holiday travel.

There’s probably additional tax revenue justly available to offset what could be the third-highest example of readily avoidable health-care costs – the estimated $50 billion a year spent on sports injuries and deaths.

The long-term, costly effects of these injuries are particularly pernicious in that they tend to affect the youngest, most vulnerable members of our society – children who are enticed by popular role models and ubiquitous, unregulated advertising to risk a lifetime’s well-being for the short-term high of participating in team sports.

There’s no need for a Joe Camel to entice otherwise unsuspecting teens into a lifetime of suffering from such avoidable sports injuries as patellar tendonitis, Achilles tendonitis, jammed and broken fingers, meniscus tears, anterior cruciate ligament injury, even spontaneous heart failure and death.

We celebrate these activities, even spend taxpayers’ money to support them in our schools.

Yet we make no provision for paying for the long-term effects of these activities, such as painful, chronic arthritis, costly joint replacements and other lifetime disabilities that are the readily anticipated results.

We say, as the proverbial coach responds, "Just walk it off."

Not only do we encourage our young people to engage in these dangerous, though admittedly pleasurable activities at an early age, but our society also celebrates older athletes who continue to abuse their bodies well into middle age, when we all really should know better.

Doesn’t every intelligent person over 40 cringe a little deep down when they think of Brett Favre?

Nevertheless, this is Wisconsin, so forget the millions of dollars spent each year on football injuries.

Our governor is a great hoopster, so let’s consider, just for a moment, only basketball.

Basketball alone accounts for a significant share of sports injuries, an estimated $23 billion per year, and strikes particularly hard among young women, who are hurt playing the sport at a considerably higher percentage, on average, than men.

Still, only about 10 percent of the population plays basketball in any given year, less than half the percentage of, say, smokers, who represent roughly 25 percent in our society.

Now, it’s pretty easy to tax a minority, especially when they’re way out of proportion to the rest of the populace.

So, perhaps our governor would wish to make a statement here, a real demonstration of his commitment to public health and safety, by taxing something nearer and dearer to his own heart – basketball.

Adding a $2.52 surcharge to every basketball sold in Wisconsin would go a long way toward convincing critics that he’s really serious about using the power of the state to meld personal behavior to a more healthful, happy and cost-effective future for us all.

(Randolph Brandt is a retired newspaper editor [and pack-a-day smoker] who lives in Racine, Wis.)