Monday, April 10, 2006

THE PRESIDENT'S CREDIBILITY PROBLEM

President Bush finds himself in yet another quandary.

The president has repeatedly stated his opposition to the leak of a CIA operative Valerie Plame's identity.

In September 2003, Bush said, "I don't know of anybody in my administration who leaked classified information. If somebody did leak classified information, I'd like to know it, and we'll take appropriate action." Specifically, Bush said he'd fire anyone who was found to have leaked the information.

But this week, through the release of court papers, it was revealed that Lewis Libby, Vice President Dick Cheney's former top aide, told investigators that the president himself authorized the leak of sensitive intelligence information about Iraq.

Before his indictment, Libby told a grand jury investigating the CIA leak that Cheney told him to pass on the information, and that Bush authorized the disclosure. That authorization led to the July 8, 2003, conversation between Libby and New York Times reporter Judith Miller. And according to Miller's grand jury testimony, it was during that conversation that Libby told her about Valerie Plame's CIA status.

Interestingly, the White House has not challenged the statements in the court documents, which state that Libby's passing of information to Miller "occurred only after the vice president advised defendant that the president specifically had authorized defendant to disclose certain information in the National Intelligence Estimate." The filing did not specify the "certain information."

Though the release didn't indicate whether Bush or Cheney specifically authorized Libby to disclose Plame's identity, the disclosure means that the president and the vice president used Libby to secretly provide information to reporters about prewar intelligence on Iraq. And one way or another, the president authorized the leak that led to this whole mess in the first place.

Libby's testimony also puts the president and the vice president in the awkward position of authorizing leaks -- a practice both men have claimed to vehemently detest. In fact, the administration has initiated criminal investigations to hunt down leakers, such as who leaked information about the warrantless domestic surveillance program authorized by Bush. And the president has chastised the Congress about leaks in the past. The White House prides itself on being in lock-step, and for being lock-lipped in its efforts to control the flow of information.

What's critical here is that President Bush has been caught contradicting himself by repeatedly railing against leaks of classified information, while it's now known he approved the release of classified information in an effort to bolster the case for war in Iraq. This illustrates the double standard that exists in the White House; leaks that benefit the President are acceptable, while those that don't are entirely unacceptable.

White House spokesman Scott McClellan argues that the president staunchly opposes releasing classified information that could affect U.S. security. And he pointed out that the president reserves the right to declassify material at will.

However, the President does not have the authority to out a clandestine intelligence operative. Nor does anyone else. The 1982 Intelligence Identities Protection Act makes it a federal offense to intentionally reveal a covert operative's identity. And Prosecutor Patrick Fitzgerald's investigation may uncover other crimes as well, such as perjury or obstruction of justice.

The outing of Plame was highly unscrupulous, irresponsible and apparently vindictive.

The first President Bush, a former head of the CIA, once described anyone who unmasked an undercover agent as "the most insidious of traitors." That seems to be a most apt description.

The president could have headed off this controversy two years ago if he'd just come clean about his involvement. If he believes that he had the authority to declassify intelligence at will, then why didn't he speak up sooner? What was he hiding? Why did he wait for the information to released in court testimony?

Hopefully the nation will soon have answers to those questions. The president clearly owes the country an explanation. His credibility, or what's left of it, is on the line here.
WITHOUT DELAY

With polls showing that he risked losing his seat in congressional elections this fall, Tom Delay announced that he will not seek reelection in his Texas district.

The shameful announcement was a major, and quite sobering, reckoning for a man not quite accustomed to such things.

Stuart Roy, once an aide to DeLay, said he thought his former boss was deterred by the prospect of a tough fight, and the possibility of life in Congress without a major leadership position - even if he were reelected. Delay came to love power, and in the absence of it, the job of serving his district and the country just wouldn't be satisfying enough.

Once one of the most influential Republicans in Congress, the embattled Delay is facing money-laundering charges in his home state of Texas. Perhaps he felt he needed to give his own defense his undivided attention.

Dropping out of the race allows Delay to use $1.3 million in left over campaign contributions to help bankroll his legal defense. So the move isn't just to save face, but to save his personal finances as well.

In an effort to consolidate Republican power and build a lasting political majority, DeLay engineered the controversial redrawing of Texas congressional district boundaries.

DeLay came to define the style and tone of the GOP over the last decade. He used his political power and influence to raise money from special interests to advance his party's interests. In the end, it is difficult to determine where once begins and the other ends.

DeLay demanded corporate support for the party, not only in terms of fundraising but also in choosing Republicans to fill jobs at lobbying firms and trade associations. Two dozen former DeLay staffers have prominent lobbying jobs around Washington. His tactics helped forge a close relationship between big business and the party.

As a prolific fundraiser for the party and for other members of Congress, DeLay earned the deep loyalty of his colleagues.

But on three occasions in a single week, the House Ethics Committee admonished DeLay for his questionable behavior. And that could be the legacy of the Texas Congressman. His quest for power led to a sense of entitlement and privilege, to being above the rules, and even above the law.

DeLay came to symbolize corruption in Washington and a 'win at all costs' mentality. DeLay didn't appear concerned about rules, or integrity, or decency. He cared about himself, the Republican Party, and the advancement of both. He is a partisan, not a patriot. And there are plenty of them in Washington these days, on both sides of the aisle.

And that is how he will be remembered. He will be remembered for excess. And depending on how his trial turns out, he could also be remembered as a politician who believed that the government is for sale to the highest bidder.

A shameful legacy indeed.

Copyright © 2006 Sean M. Kennedy. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without the author's consent.
GM'S GENERAL MALAISE

Things haven't been good at General Motors in quite some time. And now, perhaps, they are about to get worse.

GM's troubles are many, and cumulatively, they are potentially leading to a once unimaginable bankruptcy. Case in point, the company lost $10.6 billion last year.

And that's a worrisome possibility for many other businesses, as well as the U.S. government, because GM's massive size and sprawling commercial reach make it central to the entire U.S. economy. GM is the world's largest auto manufacturer. It is so big that in the FORTUNE 500's first half-century it ranked No. 1 on the list in 37 years. On the most recent list it fell to No. 3.

GM has been the world's leading auto manufacturer for 74 consecutive years, a position it is expected to cede to Toyota this year. The longtime industry leader has been reduced to an embarrassing 26% market share. As a result, in November the company announced plans to close a dozen plants and slash 30,000 jobs in North America.

GM is burdened by the highest labor and health care costs in the industry, and it is responsible for many workers - both past and present. GM supplies health coverage for a total of 1.1 million employees, retirees, and dependents - a population bigger than Detroit's. Its efficient and eminent Japanese competitors, such as Toyota, pay health benefits for their active U.S. employees and dependents too. But Toyota does not have GM's retiree health costs, a massive burden that at year-end totaled an unfunded $64 billion. That cumbersome expense adds about $1,300 to the cost of every car and truck GM makes in the U.S.

GM spent about $5.7 billion on health care last year. That has led to an enormous competitive disadvantage. Foreign automakers that manufacture in the U.S. have a nonunion workforce that is younger, and therefore generally more healthy. That results in a huge competitive advantage.

The top pay for a GM hourly employee is $27 an hour, but with benefits and future health care costs GM estimates that hour of work costs the company $73.73.

Though the union has agreed to a "giveback" of health-care benefits, GM still needs many more concessions.

The company entered into some rather unwise deals with the United Auto Workers (UAW) that is now struggling to free itself from. For example, under one welfare-like agreement called the Jobs Bank, laid-off union members get paid for not working. Many of those employees make $100,000 annually to just stay home. The current union contract isn't up for renewal until September 2007, and in the meantime the UAW wields enormous leverage in its ability to strike.

To get an idea of the union's power, consider this; when GM proposed changing its health plan for retirees to cut $20 billion off its liabilities, the union ordered an independent audit of the company - at GM's expense - which the company wasn't even allowed to read upon completion. Eventually, the union got a very clear view of just how bad things are at GM, and ultimately conceded.

Additionally, many industry analysts have insisted that GM's eight domestic brands (Buick, Cadillac, Chevrolet, GMC, Hummer, Pontiac, Saab, and Saturn) are too many for a 26% market share. Those analysts suggest that GM phase at least one, if not two, additional lines out of existence, just as it did with Oldsmobile a couple of years ago. But, unfortunately for GM, dealer franchise laws make that nearly impossible.

Over the years, there was a gradual blurring of the distinctions between GM's numerous divisions. At one time, those distinctions created an orderly upgrade path from one division to the next, leading from the practical and economical Chevrolet to the premium Cadillac nameplate. Customers were passed along, graduating up the product chain, which kept profits flowing to the corporate parent. But eventually the divisions began competing with each other and eating into each other's market share.

And product design has been weak, or lacking, at GM, for many years. In short, they have not built the appealing, desirable cars that car buyers want. And the company has a lopsided number of trucks, pickups, and SUVs, just gas prices have begun to soar. That is a very bad combo.

It is also living with a legacy of poorly designed and built vehicles that have soured the American public and lost their confidence. As a result, people have turned to Japanese models for their reliability.

In its April issue, Consumer Reports released the results of its annual car reliability survey. The editors say Asian vehicles are by far the most reliable. Japanese and Korean vehicles had, on average 12 problems per 100 vehicles. The magazines reports that U.S. makers "have been edging closer to the Asians in reliability", with an average of 18 problems per 100 vehicles. European manufacturers are still "the most unreliable overall," with 21 problems per 100 vehicles.

Dan Neil, the Pulitzer Prize winning editor of the LA Times auto section, says that American manufacturers are building very competitive, high-quality cars, but that past history is still hurting sales. Apparently the public still lacks confidence because of previous experience.

It's increasingly burdensome financial difficulties forced GM to sell a majority stake in its finance subsidiary, GMAC, in order to gain liquidity. But GMAC is perhaps the most profitable asset that GM holds, and losing that dependable annual revenue stream ($2.83 billion in profits last year) may prove regrettable. Surrendering an asset that's been responsible for such a large portion earnings is selling the hand that feeds.

GMAC's credit ratings are linked to GM's and therefore have been repeatedly lowered. Perhaps, then, the wiser move would have been to spin off the profitable GMAC into a separate company and raise money through the sale of stock. Too late now.

Then there is the considerable problem of the bankruptcy of GM's parts supplier, Delphi. The wages and benefits it pays exceed other players in the market, making Delphi uncompetitive. The supplier has asked the UAW to accept lower wages, which the union has refused. Instead, there is now talk of a strike, which would cripple GM. What's worse, the union contract would require it to keep paying workers, hemorrhaging as much as $1 billion a week in additional losses.

Things have gotten so bad at GM that, in an effort to cut labor costs and put an end to billions of dollars in losses, it is offering all of its 113,000 U.S. hourly employees as much as $140,000 each to leave the company.

However, it's anticipated that relatively few GM employees will take the buyouts since, under an alternative early retirement plan, most of them are eligible to receive more than $100,000 while still keeping their health care coverage.

This titan of U.S. industry is now teetering on the precipice of bankruptcy, a notion that would have been unimaginable to almost all previous generations of Americans. Chrysler and Nissan both bounced back from poor sales and near financial ruin. Now the biggest player of them all takes on the biggest task of all, as it attempts to right the ship and set it on a course for both profitability and respectability.

Copyright © 2006 Sean M. Kennedy. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without the author's consent.
THE COURAGE OF HER CONVICTIONS

Dr. Wafa Sultan is a 47-year-old Syrian-American psychiatrist living outside Los Angeles. She is married and has three children. She is the last person one would expect to be at the center of an international controversy.

As a result of her outspoken remarks about the violence associated with Islam, she has been threatened with death by Muslims who are outraged by her comments. Yes, it's as ironic as it is absurd; Muslims threatening to kill a fellow Arab for saying their religion is too violent.

Her trouble began when she wrote an angry essay about the Muslim Brotherhood for an Islamic reform Web site called Annaqed (The Critic), run by a fellow Syrian living in Phoenix. The essay came to the attention of Al Jazeera, which then invited her to debate an Algerian cleric on the air last July.

In the debate, Dr. Sultan questioned the religious teachings that prompt young people to commit suicide in the name of God. "Why does a young Muslim man, in the prime of life, with a full life ahead, go and blow himself up?" she asked. "In our countries, religion is the sole source of education and is the only spring from which that terrorist drank until his thirst was quenched."

Her name became widely known throughout the Muslim world and her remarks initiated debates there and elsewhere. But her notoriety reached a zenith when she appeared on Al Jazeera once again, on Feb. 21. A Middle East Media Research Institute called Memri translated her appearance and distributed it widely, claiming the clip of her February appearance had been viewed more than a million times.

"The clash we are witnessing around the world is not a clash of religions or a clash of civilizations," Dr. Sultan said. "It is a clash between two opposites, between two eras. It is a clash between a mentality that belongs to the Middle Ages and another mentality that belongs to the 21st century. It is a clash between civilization and backwardness, between the civilized and the primitive, between barbarity and rationality."

She contrasted the ways in which Jews and Muslims have reacted to adversity. Speaking of the Holocaust, she said, "The Jews have come from the tragedy and forced the world to respect them, with their knowledge, not with their terror; with their work, not with their crying and yelling."

She went on, "We have not seen a single Jew blow himself up in a German restaurant. We have not seen a single Jew destroy a church. We have not seen a single Jew protest by killing people."

She concluded, "Only the Muslims defend their beliefs by burning down churches, killing people and destroying embassies. This path will not yield any results. The Muslims must ask themselves what they can do for humankind, before they demand that humankind respect them."

She also proclaimed that she no longer practiced Islam. "I am a secular human being," she said.

The other guest on the program, Dr. Ibrahim al-Khouli, an Egyptian professor of religious studies asked, "Are you a heretic?" He then said there was no point in rebuking or debating her, because she had blasphemed against Islam, the Prophet Muhammad and the Koran.

Dr. Sultan said she viewed his words as a formal fatwa, or religious condemnation. Since then, she said, she has received numerous death threats on her answering machine and by e-mail.

Because her mother, who still lives in Syria, is afraid to speak with her directly, she will contact her only through a sister in Qatar. And it is the safety of her family members here and in Syria that she worries more about more than herself.

"I have no fear," she said. "I believe in my message. It is like a million-mile journey, and I believe I have walked the first and hardest 10 miles."

Some Islamic reformers have proclaimed her as a voice of reason and have praised her for speaking out boldly, in Arabic no less. From her extraordinary platform - the most widely viewed television network in the Arab world - she dared to discuss a topic few Muslims will broach even in private.

Yet there are others who view her as as a heretic and an infidel who deserves to die.

"I am questioning every single teaching of our holy book," Dr. Sultan says. "I believe our people are hostages to our own beliefs and teachings,"

One thing is certain, she is a woman of great courage and strong convictions. "Knowledge has released me from this backward thinking. Somebody has to help free the Muslim people from these wrong beliefs."

But, unfortunately, Dr. Sultan is a woman and an American; the two things Muslims respect the least. As a result, it's unclear how enduring her message will be, or how weighty it will be in the Muslim world. But if others, particularly men, jump on her bandwagon instead of abandoning her, then perhaps a movement can be started that will continue this much needed debate.

However, trying to debate rationally and reasonably with the irrational and the unreasonable is a fool's game.
WILL THE CENSURE MOVEMENT GAIN MOMENTUM?

"When the President does it, that means that it is not illegal." -- President Nixon during the Watergate scandal.


It's been said that Sept. 11 changed everything.

In 2002 President Bush issued a secret Executive Order allowing the NSA to eavesdrop without a warrant on phone conversations, e-mail and other electronic communications, even if one of the parties was in the U.S.

The program was so secretive that a legal review panel -- comprised of fewer than half a dozen government attorneys that review top-secret intelligence programs for the National Security Council -- was bypassed. Instead, the legal vetting was done by just one person - then White House counsel Alberto Gonzales.

The problem is that the 1978 Foreign Intelligence Surveillance Act (FISA), forbids the NSA to conduct surveillance inside the U.S. without a warrant. Despite this, the White House chose to ignore the law, which has lead to a firestorm of controversy.

The President says that he had to ignore an act of Congress to prevent another terrorist attack. He also argues that the NSA is only spying on the communications of people who have known links to al-Qaeda.

Most Americans seem to favor the President taking aggressive steps to root out terrorists and thwart their murderous plans, but many seem to worry about the President making up, or ignoring, the law as he goes along.

The FISA court has an 11-member secret panel that hears NSA warrant requests. In the event of circumstances that require immediate action by the NSA, the law permits the agency to eavesdrop without a warrant so long as it applies for one within 72 hours.

And the court has essentially acted as a rubber stamp. According to the Justice Department, from 1979 to 2004 the court approved 18,724 wiretaps and denied only three - all in 2003. The government almost always gets what it wants.

But the Administration argues that technological advances have made FISA outdated. They claim that the law hamstrings the NSA from being able to adequately handle the immense flood of electronic communications that presently pass in and out of the U.S., which the agency says it can now capture and analyze more effectively. And Justice Department officials complain that a FISA surveillance request can take up to a week to prepare - even for some seasoned department lawyers. The warrant requests are said to be too long and complex, and officials protest that they are required for each individual number recovered from a terrorist's cell phone. Intelligence officials also complain of having to stop surveillance in order to get approval.

The NSA performs data mining, in which computers sort through billions of phone calls and Internet messages looking for patterns that may indicate terrorist activity. That requires sifting through massive numbers of individual communications to get a hit. Under FISA, the NSA is supposed to obtain a warrant for each suspect phone number it gathers. Authorities argue that the FISA process is too slow to cover a situation in which a known terrorist calls a number in the U.S. not already covered by a FISA warrant.

Such is the conundrum that lawmakers now find themselves in. They may not want the President ignoring, or breaking, the law, but they don't want to hinder intelligence efforts or be seen as "soft on terrorism" either.

Into this breach leapt Democratic Senator Russ Feingold of Wisconsin, who has proposed a resolution to censure President Bush for breaking the law - specifically, illegally wiretapping Americans.

According to the latest NEWSWEEK poll, four in ten (42 percent) of the adults in the general public say they would support Congressional censure of the president, while half (50 percent) say they would not. Censure wins majority support from Democrats (60 percent) and one in five Republicans (20 percent) say they'd support it.

Meanwhile, twenty-nine of 201 Democrats in the House have signed onto a bill that calls for a bipartisan investigation of the president's actions to determine if there are grounds for impeachment. The bill was introduced in December by Representative John Conyers Jr., a Michigan Democrat.

One in four American adults (26 percent) say they think Congress should actually impeach President Bush and consider removing him from office.

By comparison, the level of public support for impeachment today is below the 32 percent support for President Clinton's removal in October 1998, before he was impeached by the U.S. House of Representatives. Support for the impeachment of President Nixon had reached 52 percent in a June 1974 Harris poll shortly before he left office.

The NEWSWEEK poll also gives President Bush just a 36 percent approval rating, matching the low point in his presidency recorded last November.

What's surprising is that no Democrat has moved to censure the President for lying about his prior knowledge that the levees in New Orleans could be breached during Hurricane Katrina. That effort would seem much less fraught with political peril, and certainly far less controversial.

Earlier this month, the Associated Press released secret transcripts and video footage showing President Bush being personally briefed the day before Hurricane Katrina reached land. The predictions he heard were quite accurate — including the failure of the levees. He was clearly warned of exactly what was coming.

The video and transcripts show that federal and local officials discussed threats clearly, reviewed long-made plans and understood Katrina would wreak devastation of historic proportions. "I'm sure it will be the top 10 or 15 when all is said and done," National Hurricane Center's Max Mayfield warned the day Katrina lashed the Gulf Coast.

Michael Brown told the president that if New Orleans flooded the Superdome emergency shelter would likely be under water and short on supplies, creating a "catastrophe within a catastrophe."

Experts and officials implored the President to prepare for, "devastation of historic proportions."

The chief scientist of the National Hurricane Center warned that a major levee breach was "obviously a very, very grave concern."

Yet four days after the storm Bush declared, "I don't think anybody anticipated the breach of the levees" that resulted in the historic flooding of New Orleans. But the transcripts and video show there was plenty of talk about that possibility.

And President Bush didn't ask a single question during the briefing.

Ultimately, Katrina ended up being the worst natural disaster in American history, killing over 1,300 people and displacing hundreds of thousands.

And yet, much like Katrina, that storm of controversy quickly blew over and passed. Absent was the outrage that seems to have taken root in the illegal wiretaps issue. Perhaps the illegal wiretap issue can be debated, as well as whether or not the President deserves to be censured. But one thing is certain; the president lied to the public regarding his prior knowledge of the potential consequences of Katrina. For that, if not for dereliction of duty, he certainly deserves to be censured.

Copyright © 2006 Sean M. Kennedy. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without the author's consent.

Are You Retirement Ready?

MOST AMERICANS AREN'T, AND THERE'S GENUINE REASON FOR CONCERN.

The statistics look grim. Only about 60 percent of eligible workers over 40 participate in their 401(k)s (rates are even lower for young workers), and the number of workers covered by a defined-benefit pension has been in steady decline.

In 1980 there were 95,000 such plans, but by 2004 the number had fallen to just 30,000. Since that time, the percentage of private sector workers covered by defined-benefit pensions has fallen from about 35 percent to under 20 percent.

As a result, most workers under 50 likely won't have a traditional pension.

In recent years, numerous reasonably healthy companies — Verizon, NCR, Lockheed Martin, Hewlett-Packard, Motorola, and most recently IBM, to name a few — opted out of their pension plans. That means the workers at these companies will need to save more to make up for the lost accrual of benefits.

So, earlier this month, government leaders, retirement experts and financial services executives met in Washington to discuss what employers, lawmakers and workers can do to help Americans better prepare for retirement.

The summit was sponsored by the Department of Labor, which is concerned about the ability of Americans to adequately fund their golden years. That concern drove the Department to recently publish a booklet called 'Taking the Mystery Out of Retirement Planning' to help educate the public.

Congress is considering legislation that would encourage all employers to offer automatic enrollment in 401(k)s and set the default contribution rate at 3 percent of pay, increasing one percentage point every year until 6 percent of pay is reached.

The legislation would also encourage companies to offer a 50 percent matching contribution or contribute 2 percent of pay for all employees whether they contribute or not.

The first wave of Baby Boomers will begin to retire in just two years, when they turn 62. Then, in 2011, an onslaught of retirements will begin, lasting nearly twenty years. But, according to research by Fidelity Investments, only 57 percent of Boomers expect to receive a pension.

And Fidelity says that Boomers only have enough in savings and other income sources to replace 59 percent of their pre-retirement income. Of those with 401(k) accounts, the average account balance is just $80,000, and many typically save just $2,750 a year toward retirement.

That won't go far.

There may not be much that can be done for workers over 50 who've lost their pensions and haven't prepared adequately, but an automatic 401(k) program could mean a great deal to workers under 40.

History has shown that most people do little, if anything at all, in the way of retirement planning — until it's too late. Young workers have difficulty imagining themselves in 30 or 40 years.

Such is youth.

But most retirement experts contend that adequate retirement planning needs to begin around the age of 30. An IRA is recommended, though they are under-utilized. And with pensions becoming extinct, a more widespread use of 401(k)s could help the nation fend off a looming retirement crisis.

Social Security withholdings are already automatic for most American workers, so an additional two percent to six percent withholding for a 401(k) could be easily executed.

Though it's hard to say just what the Congress would do to "encourage" employers to offer automatic enrollment in such a program, not to mention get them to offer a matching contribution, the good news is that this critical dialogue has finally begun.

Copyright © 2006 Sean M. Kennedy. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without the author's consent.