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by J. F. Kelly, Jr. | Coronado The year is, mercifully, drawing to a close. It has not been a banner year for the ruling classes, for the financial wizards who guide our economy or for those of us impacted by their policy-making. The battle for the presidential nominations dominated the early part of the year. It was far from apparent in January that a junior senator from Illinois, little known outside that state, would wrest his party’s nomination from a heavily-favored former first lady and become the first African-American major party presidential nominee. On the Republican side, it was equally unclear that Sen. John McCain would overcome early campaign difficulties to triumph over two popular governors and a former New York mayor. The election pitted two legislators, neither with any appreciable business or executive experience except perhaps in chairing a committee. History was made when the nation elected its first black president after a campaign that was largely devoid of race as an issue. Americans had a reason to be proud as the nation turned a corner in its history of racial relations. That election was one of the year’s few highlights. Another was the progress in Iraq, thanks largely to the success of the military surge which began in 2007, silencing some of the critics of that war and helping to ensure that the sacrifices of our military heroes who fought there were not in vain. The year also saw Pakistan, a key ally in the Afghanistan campaign, plunge into turmoil over the assassination of opposition leader and former Prime Minister Benazir Bhutto. It has remained in turmoil since and its inability or unwillingness to control the militants in the lawless tribal areas of the western territories is severely hampering NATO efforts against al Qaeda. Muslim nations that continue to tolerate radical teachings and anti-western hatred in their mosques and religious schools while their governments publicly proclaim support for the war on terrorism continue to serve as breeding grounds for suicide bombers and other terrorists. Americans continued to lose the war on drugs as casualties mounted and usage increased. U.S. demand continued to fuel unprecedented violence in Mexico and other drug producing or transporting countries where well-organized and armed gangs fought over the profits to be gained from our drug addiction and recreational use. Over 5,000 Mexicans, many innocent bystanders and law-enforcement personnel, died in this war on our southern border which is, in fact, now spilling over it. It was the summer of our discontent as gas prices soared to well over $3 per gallon. Usage dropped dramatically which combined with a worsening economy to bring prices back down to earth by late fall. All eyes were on China as Beijing hosted the Olympic Games. Many protested Chinese rule in Tibet but the games went on, showcasing China and attracting throngs of tourists. China won the most gold but the U.S. won more medals overall. By a one vote majority, the U.S. Supreme Court ruled that the writ of habeas corpus applied to foreign detainees in American custody in the war on terrorism, raising doubt that some of the terrorists in custody would be tried at all because of concerns over the security of sensitive information. The Supremes also ruled that the Second Amendment right to bear arms was an individual right, not exclusively a group right. The massacre in Mumbai, carried out by well-trained Muslim terrorists belonging to a group seeking to spread Muslim rule throughout the region, again demonstrated the vulnerability of open societies to such suicidal attacks. That they targeted westerners and Jews in particular reminds us that we are the focus of blind hatred and senseless violence perpetrated in the name of Allah. The national debt, long at obscene levels, continued its meteoric rise, increasing an already unsustainable burden on our children and grandchildren. The annual service on this debt already greatly reduces the amount available for discretionary spending and makes us more beholden to the nations that own this debt and increasingly will own us. The housing market continued its free fall. Irresponsible mortgage lending and the packaging of substandard mortgages into securities sold all over the world created havoc in financial markets as the buyers of these supposedly safe investments realized that there was no way to accurately value them. The credit markets subsequently dried up and many companies dependent on credit failed as did many financial institutions. Massive government rescue schemes attempted to free up credit and save the financial system from collapse. Failing companies meant disappearing jobs. The year’s end finds the nation gripped in a depression being compared to that of the 1930’s. On top of that, we have witnessed the value of  homes, IRA’s and 401k’s and other savings plummet. Christmas 2009 comes to an America which has been mightily stung by economic adversity and the harsh prospects of hard times ahead. Will this be, as columnist Peggy Noonan suggests, the first Christmas in a new age of restraint? Perhaps restraint is what we need for it was surely a lack of it on the part of lenders, investors and buyers that got us into this mess. Let’s wish for a better new year as we celebrate Christmas 2008. CRO copyright 2008 J.F. Kelly, Jr. J.F. Kelly, Jr. is a retired Navy Captain and bank executive who writes on current events and military subjects. He is a resident of Coronado, California.

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