June 17, 2010

While Obama Kicks BP Ass, Justice Department Reports That U.S. Completely Unprepared for WMD Attack

I have seen way too much of the Congressional hearings on the BP oil spill and heard way too much from Obama on the subject of kicking some BP ass. The President proclaims that under his watch BP chief, Tony Hayward, would be fired for not doing enough to prevent the massive oil spill disaster and secondly, for not having a plan in place to contain the spill.

Well guess what ... Obama could use a good swift kick in the pants himself. Of course we already knew that. But the purpose of the ass-kicking today is the government's complete unpreparedness in the event of a weapons of mass destruction attack.

My purpose here however is not to proselytize, I'm going to let Peggy Noonan of the Wall Street Journal do that much more eloquently. In a recent editorial, Noonan exhibited a great deal of restraint in not making a comparison between Obama's unpreparedness and BP's disaster.

The basis of Noonan's editorial is an overlooked report from the Justice Department that illustrates just how unprepared we are to respond to an WMD incident. The government can't come up with a plan in 10 years? Listen up Mr. President and heed the warning. You could be leaving this nation facing a disaster far greater than the BP oil spill with no plan in place to respond. Like you say, the buck should stop with the CEO.

Below are a few excerpts from the editorial. Click here to read it in it's entirety.

The most important overlooked story of the past few weeks was overlooked because it was not surprising. Also because no one really wants to notice it. The weight of 9/11 and all its implications is so much on our minds that it's never on our mind.

I speak of the report from the inspector general of the Justice Department, issued in late May, saying the department is not prepared to ensure public safety in the days or weeks after a terrorist attack in which nuclear, biological or chemical weapons are used. . .

So how would Justice do, almost nine years after the attacks of 9/11? Poorly. "The Department is not prepared to fulfill its role . . . to ensure public safety and security in the event of a WMD incident," says the 61-page report. Justice has yet to assign an entity or individual with clear responsibility for oversight or management of WMD response; it has not catalogued its resources in terms of either personnel or equipment; it does not have written plans or checklists in case of a WMD attack. A deputy assistant attorney general for policy and planning is quoted as saying "it is not clear" who in the department is responsible for handling WMD response.

Workers interviewed said the department's operational response program "lacks leadership and oversight." An unidentified Justice Department official was quoted: "We are totally unprepared." He added. "Right now, being totally effective would never happen. Everybody would be winging it." . . .

The report was not the first of its kind. Six months ago, the bipartisan Commission on the Prevention of Weapons of Mass Destruction Proliferation and Terrorism gave both the Obama administration and Congress failing grades on preparedness for biological attack. It said, "the US is failing to address several urgent threats, especially bioterrorism." The administration soon announced it would speed up delivery of drugs that would be needed in the event of an attack.

Our eye is off the ball. The public, in spite of what it knows in the day to day, assumes the government is on the case. And certainly the government is on the case with regard to prevention: Not being hit again since 2001 means something, and our antiterrorism professionals, intelligence and law-enforcement agents, do impressive work. In New York the past week they picked up two apparent would-be terrorists who won't be playing jihad anytime soon. But public awareness of prevention success gives the impression the government is similarly capable in terms of readiness and response.

On 9/11 we were rocked but held together. In a second and more devastating attack, public safety and public unity would be infinitely more stressed. The event, having had a precursor, would be infinitely more painful. You'd think this would focus the government's mind.

We may be witnessing again a failure of imagination, the famous phrase used after 9/11 to capture why the U.S. government was caught so flatfooted and was so stunned that such a terrible thing could occur. They neglected to think of the worst thing that could happen, and so of course they did not plan for it. If agencies within the government now are having a second failure of imagination, it is not forgivable. We're not being asked to imagine a place we've never been, after all, we're only being asked to imagine where we've been, and how it could be worse, and plan for it.
Ronald Regan once said privately to a few aides, "Man has never had a weapon he didn't use."

"Reasonable Ability to Repay" Leaves Some Aghast

I just love this. File under "brilliance of stating the obvious." NPR with their classic sense of the ironic interprets financial reform reporting by the Wall Street Journal .

Dems from the House and Senate are hashing out a final finance-reform bill. Yesterday, they added a section that would impose new rules on mortgage lenders, the WSJ reports.

Among other things, it would enshrine into law what seems like the most basic tenet of banking: Lenders can only give mortgages to people who have a "reasonable ability to repay" based on their income, credit history and indebtedness.

The section a response to the securitization-driven mortgage mania of the housing boom, when an unemployed hamster could get a seven-figure, negative-amortization loan.

The banking industry has argued that it goes too far, and could make it harder for qualified borrowers to get loans, the WSJ says.

This goes too far? Did the banking industry really say that a loan qualifier of "reasonable ability to repay" goes too far? Nevertheless, the bill passed with a nonpartisan vote.

I'm sure we've missed the nuisances of the bill that caused objections from the banking industry, but still ....

June 4, 2010

Asking the Million Dollar Question or Laughing While You Sink

The European contagion is disrupting global confidence if you consider today's volatile markets. The million dollar question - or questions - posed in this video will most likely provoke a nervous laugh. Very nervous.



Two other questions:

How many millions in a trillion? A. A million million. (A billion is a thousand million.)

Is it time for that European vacation? A. Yes.

HT: The Real Estate Bloggers