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Archive: POLITICS >please note: some links may no longer be active.
Preventive Detention: from Ashcroft to Obama Yesterday -- in a very significant decision (.pdf) written by Bush-43-appointed federal judge Milan Smith and joined by a Reagan-appointed judge -- the Ninth Circuit Court of Appeals allowed a lawsuit to proceed that was brought against John Ashcroft for the illegal and unconstitutional detention of American Muslims. The suit was brought by Abdullah al-Kidd, an American citizen of African-American descent who converted to Islam. Al-Kidd was arrested, detained under abusive conditions, and then had his movements and freedoms severely restricted for sixteen months despite no evidence that he had done anything wrong. The suit arises out of a policy established by Ashcroft of abusing the "material witness" statute, which authorizes the detention of key witnesses to a criminal case where it's likely they will be unavailable to testify in the absence of their pre-trial detention. Ashcroft used that statute as a pretext for arresting American Muslims where there was insufficient evidence to establish probable cause they had committed a crime (the standard required to justify their arrest). In other words, Ashcroft's DOJ would pretend that they wanted to detain Muslim citizens because they were "material witnesses" to a crime, when the real reason was that they suspected them of Terrorist connections and wanted to arrest and investigate them but lacked the evidence required by law to justify an arrest -- i.e., they wanted to "preventively detain" them in the absence of any criminal wrongdoing. The real significance of this case is that it highlights the dangers and evils of preventive detention -- an issue that will be front and center when Obama shortly presents his proposal for a preventive detention scheme, something he first advocated in May. What Ashcroft is accused of doing illegally is the exactly same thing Obama wants the legal power to do (except that Obama's powers would presumably apply to foreign nationals, not citizens): namely, order people imprisoned as Terrorist suspects -- "preventively detained" -- where there is insufficient evidence to prove they committed any crime. much more from the indespensible Glenn Greenwald at Salon.com
Too big to fail, or survive? I had to pass this tale along to illustrate how ridiculous the housing situation is and how much of a mess Bank of America / Merrill Lynch (BAC) is right now. My wife and I are currently looking to buy a house in hopes of finding something that has reasonably returned to earth in the last 18 months in the Bay Area. We found a bank owned property in an excellent neighborhood that had been absolutely gutted by the departing owners/tenants. The listing agreement said that all offers had to be submitted with a Bank of America prequalification. We have been working with Merrill because we have investments with them and they are willing to verify our assets without forcing to sell anything until the last minute. Our agent contacted the selling agent to make sure that it was fine for us to submit our offer with the Merrill pre-approval. No dice, it had to be Bank of America. So we contact a B of A rep and get a quick approval ($50 for the trouble plus another run on our credit). Then our agent prepares the offer and learns that the house is actually owned by Merrill. We then contacted our Merrill rep and had him see what the story was to determine if we could perhaps deal directly with the person inside managing that portfolio. What happened next? You probably already guessed it, Merrill couldn’t find the property on any of its books. Neither could Bank of America. Needless to say we walked away from such a mess. This is not a “one hand doesn’t know what the other is doing,” this is a other fingers on the same hand are clueless situation. These banks are not too big to fail. They are failing because they are too big. the above letter was written to Mike Shedlock and posted on his blog
Sanctions for Iran? How About Israel? In Israel, a country stolen from the Palestinians, fanatics control the government. One of the fanatics is the prime minister, Benjamin Netanyahu. Last week Netanyahu called for “crippling sanctions” against Iran. The kind of blockade that Netanyahu wants qualifies as an act of war. Israel has long threatened to attack Iran on its own but prefers to draw in the US and NATO. Why does Israel want to initiate a war between the United States and Iran? Is Iran attacking other countries, bombing civilians and destroying civilian infrastructure? No. These are crimes committed by Israel and the US. Is Iran evicting peoples from lands they have occupied for centuries and herding them into ghettoes? No, that’s what Israel has been doing to the Palestinians for 60 years. What is Iran doing? Iran is developing nuclear energy, which is its right as a signatory to the Non-Proliferation Treaty. Iran’s nuclear energy program is subject to inspections by the International Atomic Energy Agency (IAEA), which consistently reports that its inspections find no diversion of enriched uranium to a weapons program. The position taken by Israel, and by Israel’s puppet in Washington, is that Iran must not be allowed to have the rights as a signatory to the Non-Proliferation Treaty that every other signatory has, because Iran might divert enriched uranium to a weapons program. In other words, Israel and the US claim the right to abrogate Iran’s right to develop nuclear energy. The Israeli/US position has no basis in international law or in anything other than the arrogance of Israel and the United States. The hypocrisy is extreme. Israel is not a signatory to the Non-Proliferation Treaty and developed its nuclear weapons illegally on the sly, with, as far as we know, US help. As Israel is an illegal possessor of nuclear weapons and has a fanatical government that is capable of using them, crippling sanctions should be applied to Israel to force it to disarm. more from Paul Craig Roberts at Counterpunch
Circular Corruption The long-awaited investigative report by the Securities and Exchange Commission’s (SEC) Inspector General on how the SEC bungled multiple investigations of Bernard Madoff is set for release this week. Unfortunately, according to media reports, the long suffering investing public will not receive the report until the SEC itself has had a chance to review it. The team that produced this report on one of the most long-running and convoluted frauds in the history of Wall Street included Inspector General H. David Kotz who came to the SEC-IG post in December 2007 after five years as Inspector General and Associate General Counsel for the Peace Corps. The Deputy Inspector General, Noelle Frangipane, also came to the SEC from the Peace Corps where she had served as Director of Policy and Public Information. This lack of Wall Street cronyism by the top two in the Inspector General’s office might have been refreshing to some in Congress and compensated for their not knowing the difference between puts and calls and peaks and troughs and the intricacies of Mr. Madoff’s split-strike conversion strategy (he splits with your money while converting you to a pauper). But the background of the member of the team heading up the Inspector General’s Office of Investigations, J. David Fielder, should have rang serious alarm bells to Congressional investigators. For the ten years leading up to July 2007, J. David Fielder worked for the SEC as a Senior Counsel in the Division of Enforcement. In February 1999, he moved to the Division of Investment Management, first as Senior Counsel on the Task Force for Adviser Regulation, then as Advisor to the Director. In November 2000, SEC Chairman, Arthur Levitt, appointed Fielder Counsel to the Chairman. In July 2007, Mr. Fielder was invited to join the corporate law firm, Haynes and Boone LLP, as a partner. In other words, Mr. Fielder’s government issue rolodex filled with the names, home numbers and email addresses of his colleagues at the SEC along with the investigatory matters in his head is deemed fungible currency among corporate law firms and can be freely exchanged for partner status, instantaneously moving one from the lowly wages and attendant lifestyle of public servant to the rarefied bracket and luxuriant trappings of corporate law firm partner. But what happened next is where things get interesting. In March 2009, just as the SEC Inspector General was hot in pursuit of Madoff aiders and abettors, Mr. Fielder gave up his lucrative partner status at Haynes and Boone to accept the lowly post of Assistant Inspector General of Investigations, working under a boss from the Peace Corps. In other words, he gave up big bucks for a demotion at the SEC. What Mr. Fielder did might not raise alarm bells were it not happening on a regular basis throughout the corridors of Washington and Wall Street. To understand the implications, this maneuver deserves an appropriate name. A revolving door is assumed to mean one gets all the right connections as a public servant and cashes them in to the highest bidder in private industry. That concept doesn’t typically entertain the door revolving back to public servant status. On Wall Street, they call a maneuver like that a round trip: you buy 100 shares and eventually sell the same 100 shares. You end up back where you started: a round trip. Just how many lawyer round trippers are involved in the Madoff investigation? Enough to raise a strong stench of circular corruption. read Pam Marten's full piece at Counterpunch
Ah, They've Learned Well The American client government in Iraq has embarked on a remarkable campaign of diplomatic hostilities with its neighbor, Syria, accusing Damascus of, among other things, the modern-day blood libel that immediate consigns a nation to diplomatic hell, and makes it a target for what George W. Bush used to call "the path of action": supporting al Qaeda. As Jason Ditz reports, America's Baghdad satrapy has been broadcasting confessions "obtained" (via "strenuous" but no doubt justified and right-minded interrogation) from captives blamed for the recent bombing attacks that have shaken the PR image of a calmer, surge-soothed Iraq. The bombings also pointed up the vast failures of the client regime to provide security or bring together the warring factions inside the country. These goals are of course impossible for a regime installed and maintained in power by foreign invasion; even so, they represent the Green Zoners' sole claim to "legitimacy." Thus any threat to the PR image undermines the regime's hopes to survive the partial reduction of American occupation forces (erroneously termed a "withdrawal" in the obfuscating argot of imperial message management). And so the client state led by sectarian extremist Nouri al-Maliki has turned to the time-honored tactic used by governments since time immemorial to divert attention from its own manifest failures: blaming foreign devils. Naturally, the Maliki regime cannot blame its foreign masters in Washington for unleashing, arming, abetting and exacerbating the murderous chaos in the conquered land. Nor can they blame their long-time mentors and supporters in Iran. So that leaves Syria. With the televised confessions, the Maliki regime has moved swiftly from blaming Baathist diehards who have been hiding amongst the multitude of Iraqi refugees to accusing the Damascus regime of openly directing the attackers -- and now, in the latest show-trial spectacle, of supporting al-Qaeda training camps on Syrian soil. This is heavy stuff indeed. For as we all know, the presence of al-Qaeda training camps in Afghanistan was the sole, purported reason for the American invasion in 2001; and preventing the re-establishment of such camps is still one of the primary excuses for continuing the slaughter there. The presence (or threat) of al-Qaeda camps is also proffered as justification for extending the Terror War into Pakistan and Somalia. What's more, the continual -- and blatantly false -- trumpeting of a "connection" between al Qaeda and Iraq was, in the end, the principal reason why the Iraq invasion garnered so much initial public support; the act of unprovoked aggression was seen as "payback for 9/11," as so many U.S. soldiers put it in those heady early days. The "al Qaeda" card trumps everything else. It justifies any action: invasion, torture, drone attack, rendition, death squads, covert ops, war profiteering, draconian power -- "the dark side, if you will," as one great American statesman put it. By openly accusing the Syrian government of sponsoring al Qaeda and directing terrorist attacks inside Iraq, the Maliki regime is laying the groundwork for any action their Washington masters might want to take against Damascus at any time. The regime is also giving one more reason to delay and dilute the American drawdown (which is also a cherished goal of the American militarists): are you going to pull out troops from Iraq when al Qaeda is getting state protection on Iraq's borders and launching terrorist attacks? Iraq's extraordinary accusations against Syria -- which have already led to a mutual withdrawal of ambassadors -- have thus far garnered little attention amongst the scribes who attend upon the imperial court. And who knows? At a nod from Caesar, the Iraqis might kiss and make up with Damascus tomorrow, if that is deemed more suitable for the immediate needs of imperial policy. But one should always remember that Syria has long been -- and still remains -- a prime target of that faction of American militarists known loosely as neo-cons. Indeed, at one point, it was a toss-up as to which "recalcitrant tribe" of Arabs they wanted the American war machine to hit first: Iraq or Syria? more from Chris Floyd
What a (Sick) Joke Bernanke appointed for another term. Let's take a quick look back at some of his predictions... If you can stomach any more, here's a sobering analysis from John Hussman: On Friday, investors took great cheer in an optimistic statement by Ben Bernanke suggesting good prospects for economic growth ahead. “Our forecast is for moderate but positive growth going into next year. We think that by the spring, early next year, that as these credit problems resolve and, as we hope, the housing market begins to find a bottom, that the broader resiliency of the economy, which we are seeing in other areas outside of housing, will take control and will help the economy recover to a more reasonable growth pace.” We might be inclined to place a sliver of credibility in Chairman Bernanke's assessment – if not for the fact that the quote above wasn't from last week at all, but rather, hails back to November 8, 2007, just before the recent recession began. You might recall that the S&P 500 was pushing 1500 at the time. Bernanke's economic research is a minefield of partial equilibrium analysis. Helicopter Ben is a lot like John Maynard Keynes, who wrote in his General Theory “If the Treasury were to fill old bottles with banknotes, bury them at suitable depths, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again, there need be no more unemployment.” Solving economic problems, to our Fed Chairman, is as easy as throwing money out of helicopters. Not surprisingly, throwing money out of helicopters has been the basic core of his strategy during this crisis. This does not involve complex thought about debt restructuring, moral hazard, incentives, equitable distribution of resources, or other factors. All it requires is the three second tape playing in Bernanke's head - "We let the banks fail in the Great Depression, and look what happened." And then the tape repeats. Never mind that the cause of the upheaval was not the failure of banks per se, but the disorganized Lehman-style failure of banks. The tape isn't long enough to encompass such nuances. Unfortunately, the resources used in the recent bailout were not just free money tossed out of a helicopter. Only a partial-equilibrium economist thinks that way. No, this was an allocation of trillions of dollars of real resources that could be spent improving access of poor families to health care, finding cures for life-changing diseases, providing better education, and reversing the crowding-out of productive private investment. A public servant willing to act this carelessly with the resources entrusted to him, and so strongly in defense of fellow bankers, frankly does not deserve the job. Most likely, we will face the same credit issues a few quarters from now, given that the lull in the adjustable-rate reset schedule is near its end. We continue to expect a fresh acceleration of credit losses as we enter 2010. It would be best if we faced these challenges with more thoughtful leadership. Hussman's full piece can be read here more intelligent reaction to Obama's latest mistake from The Cunning Realist
Same Old, Same Old Continuity, continuity, in all things, continuity. This has been the battle cry of Barack Obama's administration, especially when it comes to waging the Terror Wars -- and trying to manipulate public opinion about these intractable conflicts. As Stars and Stripes reports, Obama is paying millions to a shadowy PR firm to "vet" the political leanings of journalists reporting on his ever-expanding "Af-Pak War." This happens to be the same PR firm used by the Bush-Cheney regime to help mislead the nation into the murderous war of aggression against Iraq: the Rendon Group. S&S: As more journalists seek permission to accompany U.S. forces engaged in escalating military operations in Afghanistan, many of them could be screened by a controversial Washington-based public relations firm contracted by the Pentagon to determine whether their past coverage has portrayed the U.S. military in a positive light. U.S. public affairs officials in Afghanistan acknowledged to Stars and Stripes that any reporter seeking to embed with U.S. forces is subject to a background profile by The Rendon Group, which gained notoriety in the run-up to the 2003 U.S. invasion of Iraq for its work helping to create the Iraqi National Congress. That opposition group, reportedly funded by the CIA, furnished much of the false information about Iraq’s supposed weapons of mass destruction used by the Bush administration to justify the invasion. Rendon examines individual reporters’ recent work and determines whether the coverage was “positive,” “negative” or “neutral” compared to mission objectives, according to Rendon officials. Not to worry, though. The Pentagon says it doesn't deny anyone access because of their background; they just use the information to let the relevant commanders know if they've got some nosy pinko commie islamofascist left-wing wacko in their midst. Just so they can be extra careful that, you know, nothing happens to the little American-hating bastard during the visit. “We have not denied access to anyone because of what may or may not come out of their biography,” said Air Force Capt. Elizabeth Mathias, a public affairs officer with U.S. Forces Afghanistan in Kabul. “It’s so we know with whom we’re working.” Yet strangely enough, it seems that the Pentagon is, well, lying about not barring anyone because of their past reporting. Who have they barred? Why, a reporter from Stars and Stripes, just two months ago: U.S. Army officials in Iraq engaged in a similar vetting practice two months ago, when they barred a Stars and Stripes reporter from embedding with a unit of the 1st Cavalry Division because the reporter “refused to highlight” good news that military commanders wanted to emphasize. read the rest of Chris Floyd's piece at his Empire Burlesque
Abuse of Power on the West Bank Six years ago, during my first trip to the West Bank , I met a Palestinian woman named Rania who aspired to a college education. She was from a small village and her family wasn’t supportive, but she found jobs with international NGOs, saved enough to pay for one semester of college, and enrolled herself, knowing that would probably be all she could manage unless a miracle happened. When I learned about her efforts to educate herself, I made an appeal to several friends and professional contacts to help her finish her second semester, and then her third. After four years, she graduated with a degree in social work and psychological counseling. In the meantime she met and married a man named Sharif and moved to the Palestinian city of Tulkarem . By the time I arrived in Ramallah this summer, they had a one-year-old son named Karim and a daughter on the way. Rania and Sharif were in the process of building their new home a little at a time whenever they could save some money. Sharif is one of the genuinely nicest guys I’ve ever met. He supported Rania through the final semesters of her education, he loves his son Karim (Sharif’s mother died while giving birth to him, so the idea of an intact family is novel and wonderful for him), and he changes diapers and helps with the cooking and cleaning. He has a great sense of humor and a disarming smile. He’s had a difficult life, and so has Rania, but things were finally looking up for them. They both adore Karim (trust me, he’s impossible not to adore), and Rania is ecstatic about having a daughter and giving her every kind of love and support she wished she’d had growing up. A month ago, there was loud banging on their door around 1:00 am. Frightened, Rania asked who it was. They said they were Israeli soldiers. Rania knew they were there to arrest Sharif, though neither of them knew why. This is standard operating procedure for Israeli army arrest operations—entering homes in the dead of night when people are at their most psychologically and physically vulnerable. She had no choice but to open the door, knowing it would be blown up or knocked down if she refused. They asked if her husband was home. She said no. They asked if they could come in and make sure. Again, she had no choice but to allow them. When they found Sharif hiding in the bedroom, they gave a loud order, and twenty more armed soldiers stormed in. They beat Sharif in front of his wife and son, called Rania a lying sharmouta (whore) while holding a gun to her head, and took Sharif away. He’s been charged with car theft in Israel , an absurd charge. He’s never been to Israel , though he had recently been given a permit to work in Israel . Rania said to me, “It is very difficult for a Palestinian to get a permit to work in Israel . Why would they give him a permit if they thought he was stealing cars?” An Israeli friend of mine guesses it might be to pad their statistics on cracking down on car theft, or they might be trying to recruit him as a spy—offering to let him go if he will inform on his neighbors or extended family members. This is one of the most devastating tactics an occupier has for tearing the fabric of a society apart, sowing suspicion and division between neighbors and family members. How can a man be forced to choose between lying about his neighbors and family members, or spending a year away from his wife, son, and soon new daughter, knowing that without his support, they may not have enough to live on? He may be in prison himself because another man chose to falsely inform on him rather than pay this terrible price. more at Mondoweiss
Americans: Serfs Ruled by Oligarchs Americans think that they have “freedom and democracy” and that politicians are held accountable by elections. The fact of the matter is that the US is ruled by powerful interest groups who control politicians with campaign contributions. Our real rulers are an oligarchy of financial and military/security interests and AIPAC, which influences US foreign policy for the benefit of Israel. Have a look at economic policy. It is being run for the benefit of large financial concerns, such as Goldman Sachs. It was the banks, not the millions of Americans who have lost homes, jobs, health insurance, and pensions, that received $700 billion in TARP funds. The banks used this gift of capital to make more profits. In the middle of the worst economic downturn since the Great Depression, Goldman Sachs announced record second quarter profits and large six-figure bonuses for every employee. The Federal Reserve’s low interest rate policy is another gift to the banks. It lowers their cost of funds and increases their profits. With the repeal of the Glass-Steagall Act in 1999, banks became high-risk investment houses that trade financial instruments such as interest rate derivatives and mortgage backed securities. With abundant funds supplied virtually free by the Federal Reserve, banks are paying depositors virtually nothing on their savings. Despite the Federal Reserve’s low interest rate policy, beginning October 1 banks are raising the annual percentage rate (APR) on credit card purchases and cash advances and on balances that have a penalty rate because of late payment. Banks are also raising the late fee. In the midst of the worst economy since the 1930s, heavily indebted Americans, who are losing their jobs and their homes, are to be bled into bankruptcy by the very banks that are being subsidized with TARP funds and low interest rates. Moreover, it is the American public that is on the hook for the TARP money and the low interest rates. As the US government’s budget is 50 per cent or more in the red, the TARP money has to be borrowed from abroad or monetized by the Fed. This means more pressure on the US dollar’s exchange value and a rise in import prices and also domestic inflation. Americans will thus pay for the TARP and low interest rate subsidies to their financial rulers with erosion in the purchasing power of the dollar. What we are experiencing is a massive redistribution of income from the American public to the financial sector. read Paul Craig Roberts' full piece at Counterpunch
Monsanto's Man in the Obama Administration Michael R. Taylor’s appointment by the Obama administration to the Food and Drug Administration (FDA) on July 7th sparked immediate debate and even outrage among many food and agriculture researchers, NGOs and activists. The Vice President for Public Policy at Monsanto Corp. from 1998 until 2001, Taylor exemplifies the revolving door between the food industry and the government agencies that regulate it. He is reviled for shaping and implementing the government’s favorable agricultural biotechnology policies during the Clinton administration. Yet what has slipped under everyone’s radar screen is Taylor’s involvement in setting U.S. policy on agricultural assistance in Africa. In collusion with the Rockefeller and Bill and Melinda Gates foundations, Taylor is once again the go-between man for Monsanto and the U.S. government, this time with the goal to open up African markets for genetically-modified (GM) seed and agrochemicals. In the late 70s, Taylor was an attorney for the United States Department of Agriculture, then in the 80s, a private lawyer at the D.C. law firm King & Spalding, where he represented Monsanto. When Taylor returned to government as Deputy Commissioner for Policy for the FDA from 1991 to 1994, the agency approved the use of Monsanto’s GM growth hormone for dairy cows (now found in most U.S. milk) without labeling. His role in these decisions led to a federal investigation, though eventually he was exonerated of all conflict-of-interest charges. Taylor’s re-appointment to the FDA came just after Obama and the other G-8 leaders pledged $20 billion to fight hunger in Africa over the next three years. “President Obama is currently embedded in a bubble featuring some of the fervent promoters of the biotech industry and a Green Revolution in Africa,” says Paula Crossfield in the Huffington Post. Before joiningObama’s transition team, Taylor was a Senior Fellow at the D.C. think tank Resources for the Future, where he published two documents on U.S. aid for African agriculture, both of which were funded by the Rockefeller Foundation. The Rockefeller Foundation funded the first Green Revolution in Asia and Latin America in the 1960s, and in 2006, teamed up with the Bill and Melinda Gates Foundation to launch the Alliance for a Green Revolution in Africa (AGRA). In Taylor’s 2003 paper “American Patent Policy, Biotechnology, and African Agriculture: The Case for Policy Change,” he states: “The Green Revolution largely bypassed sub-Saharan Africa…African farmers often face difficult growing conditions, and better access to the basic Green Revolution tools of fertilizer, pesticides, improved seeds, and irrigation certainly can play an important role in improving their productivity.” In an interview with AllAfrica.com, Obama echoed Taylor’s sentiment: "I'm still frustrated over the fact that the Green Revolution that we introduced into India in the '60s, we haven't yet introduced into Africa in 2009." Yet as Crossfield points out, “There are very good reasons why we have never introduced a Green Revolution into Africa, namely because there is broad consensus that the Green Revolution in India has been a failure, with Indian farmers in debt, bound to paying high costs for seed and pesticides, committing suicide at much higher rates, and resulting in a depleted water table and a poisoned environment, and by extension, higher rates of cancer. If President Obama is lacking this information, it is his cabinet that is to blame.” While AGRA may not benefit African farmers, it will certainly benefit Monsanto. much more from Isabella Kenfield at Counterpunch
Further Breaches by Israel (Ho-Hum) JERUSALEM – In an echo of restrictions already firmly in place in Gaza, Israel has begun barring movement between Israel and the West Bank for anyone holding a foreign passport, including humanitarian aid workers and thousands of Palestinian residents. more from Jonathan Cook
Recession? Worse Than That... Credit is not flowing. In fact, credit is contracting. When credit contracts in a consumer-driven economy, bad things happen. Business investment drops, unemployment soars, earnings plunge, and GDP shrinks. The Fed has spent more than a trillion dollars trying to get consumers to start borrowing again, but without success. The country's credit engines are slowing to a crawl. Fed chairman Ben Bernanke has increased excess reserves in the banking system by $800 billion, but lending is still slow. The banks are hoarding capital in order to deal with the losses from toxic assets, non performing loans, and a $3.5 trillion commercial real estate bubble that's following housing into the toilet. That's why the rate of bank failures is accelerating. 2010 will be even worse; the list is growing. It's a bloodbath. The standards for conventional loans have gotten tougher while the pool of qualified credit-worthy borrowers has shrunk. That means less credit flowing into the system. The shadow banking system has been hobbled by the freeze in securitization and only provides a trifling portion of the credit needed to grow the economy. Bernanke's initiatives haven't made a bit of difference. Credit continues to shrivel. The S&P 500 is up 50 per cent from its March lows. The financials, retail, materials and industrials are leading the pack. It's a "Green Shoots" bear market rally fueled by the Fed's Quantitative Easing (QE) which is forcing liquidity into the financial system and lifting equities. The same thing happened during the Great Depression. Stocks surged after 1929. Then the prevailing trend took hold and dragged the Dow down 89 per cent from its earlier highs. The S&P's March lows will be tested before the recession is over. Systemwide deleveraging is ongoing. The economy is resetting at a lower rate of activity. No one is fooled by the fireworks on Wall Street. Consumer confidence is still falling. Everyone knows things are bad. Everyone knows the mainstream press is lying. The restaurants and malls are empty, the homeless shelters are bulging, and even the big-box stores have stopped hiring. The only "green shoots" are on Wall Street where everyone gets a handout from Uncle Sugar. Bernanke has pulled out all the stops. He's lowered interest rates to zero, backstopped the entire financial system with $13 trillion, propped up insolvent financial institutions and monetized $1 trillion in mortgage-backed securities and US sovereign debt. Nothing has worked. Wages are falling, banks are cutting lines of credit, retirement savings have been slashed in half, and home equity losses continue to mount. Living standards can no longer be bandaged together with VISA or Diners Club cards. Household spending has to fit within one's salary. That's why retail, travel, home improvement, luxury items and hotels are all down double-digits. The money has dried up. read Mike Whitney's full piece at Counterpunch
Cheney-Like Secrecy Those of us who proposed the impeachment of Vice President Dick Cheney for violating his oath of office and engaging in a Nixon-on-steroids spree of high crimes and misdemeanors began to recognize the abusive nature of the previous administration when Cheney refused to release details of the industry insiders with whom he met to craft energy policies. The refusal of the Bush-Cheney administration to permit public review of White House visitor logs detailing who was meeting with the vice president's energy task force during the very first weeks of their tenure was a deliberate decision made to cloak dirty dealing by officials who were determined to serve corporate rather than public interests. So what should we make of the news that the Obama administration is now refusing to release White House visitor logs that detail meetings between members of the new administration and health-care industry insiders? As Sharon Theimer, of The Associated Press, notes: (The) administration's multibillion-dollar deals with hospitals and pharmaceutical companies have been made in private, and the results were announced after the fact. Both industries promised Obama cost savings in return for an expanded base of insured patients; beyond that, the public is in the dark about details. In some ways, it resembles what his party criticized President George W. Bush for doing with oil and gas companies as Vice President Dick Cheney wrote a national energy plan in the early days of the Bush administration. As the Bush White House did, the Obama White House is refusing to release visitor logs that would let people see everyone going in and out during the thick of discussions over major national policies. There is a lot of talk about the fact that Obama has broken a campaign promise. That's serious. But far more serious is the perpetuation of practices of official secrecy that characterized the Bush-Cheney den of iniquity. When administrations begin to enjoy the benefits of operating in the dark, they become disinclined to end the practice. They also begin to buy into the fantasy that keeping details from Congress and the people is the only way to get things done, as did Obama White House spokesman Reid Cherlin when he tried to explain away a lack of transparency by saying: "Here's what's happening: Groups that have steadfastly opposed reform in the past are coming to the table and making concessions -- because they know we can't wait another year to pass health insurance reform." Actually, bad players are embracing bad compromises because they have made bad deals with the White House. And, make no mistake, more bad things will happen. more from John Nichols in The Nation
Civilized? As the Economist reports, the United States now has some 2,300,000 of its citizens behind bars -- or a whopping 756 out of every 100,000 people. China is the closest in sheer numbers, with 1,600,000 people locked up; but that's in a population more than four times larger than the United States, and in a state that is unashamedly authoritarian, as opposed to the incessantly self-proclaimed "land of the free." The closest competitor in proportion of caged citizens is Russia, with 629 per 100,000, and a hefty 800,000+ behind bars. After these three "great powers," the numbers drop off considerably. No one can even make half a million, not even teeming Brazil or even-more teeming India, which incarcerates a mere 33 out of every 100,000 of its people. Iran -- which as we know is the center of all demonic Islamofascist terrorist barbarian evil in the whole wide world -- doesn't even have 200,000 of its people locked up. It goes without saying that effete hellholes like France or Spain or Germany or Sweden or Canada don't even make the Economist's list of the Top 14. Nor does any nation in Africa -- with the exception of South Africa, with its long, proud lineage of colonial jurisprudence. (Even so, the South Africans are pikers compared to the Great Powers -- although they are ahead of Iran.) Nor does Burma, North Korea, Sudan -- or any Arab country -- make the list. It is truly astonishing that any nation that dares call itself "civilized" would have such a sweeping, punitive prison system. But this is just one of many shocking facts that no longer trouble the American conscience, which has been both deliberately and incidentally deadened by decades of empire, aggression, brutality and lies. It is also the mark of a deeply racist culture that has sought -- again both deliberately and unconsciously -- to punish, repress and break vast swathes of its own population: namely, its African-American citizens, the descendants of the people the nation once enslaved. (Can it be any accident that the first black president of the United States is not only half-white, but is also not descended from American slaves? He is not really, you see, one of them: those dark Others who have lived among us for so long as repositories for the white folks' guilt and fears.) The viral growth of the American punishment system is, of course, a hardy perennial for the very, very few people who give even the slightest damn about it. As I said, I've written about it for several years, as the new annual stats issue forth. Last year, Arthur Silber trained his considerable firepower on the subject, when a study revealed that not only were one in every 100 American adults now behind bars, but one out of every nine black males between the ages of 20 and 34 are now incarcerated. Silber noted the fact that "a high proportion of prisoners are non-violent drug offenders... more from Chris Floyd
The Obama administration fights transparency (Again) Neil Barofsky, the chief watchdog over the $700 billion TARP bank bailout program, is one of those rare creatures in Washington: he takes very seriously his responsibilities of independent oversight and accountability. A career prosecutor, Barofsky is a life-long Democrat who donated money to Obama's presidential campaign. But ever since he was appointed to head the oversight office created by Congress when it enacted TARP -- an office designed to ensure transparency and accountability at the Treasury Department and in the banking industry -- he has repeatedly clashed with Obama's Treasury officials over their lack of transparency in how the trillions of dollars in TARP-related funds are being sent to and used by the banking industry. So seriously does Barofsky take his oversight duties that, as a Washington Post profile noted in March, "he refuses to eat with senior administration officials in the [Treasury] building's executive dining room to maintain his independence." Barofksy's clashes with administration officials have intensified of late. Last week, he issued a report documenting that the actual amount of taxpayer money theoretically put at risk in the bank bailout -- once Federal Reserve, FDIC and other programs are counted -- is $23.7 trillion, not the widely cited figure of $700 billion, a report that prompted attacks from the White House and Treasury on his credibility. Separately, Barofsky has continuously disputed White House claims that it's impossible to account for what has been done by banks with the TARP funds. Barofsky wants to compel banks to account for those funds and then publicize that information, while the administration opposes such efforts, claiming that accounting for TARP monies is impossible due to the "fungibility" of those funds. To disprove that claim, Barofsky sent out voluntary surveys to the bank which proved that those funds could be tracked (and he found TARP funds were being used by receiving banks largely to acquire other institutions and/or create "capital cushions" rather than increase lending activity, the principal justification for TARP). Most significant of all, and obviously due to Barofsky's truly independent oversight efforts, the Obama administration is now attempting to induce the Justice Department to issue a ruling that Barofsky's office is not independent at all -- but rather, is subject to, and under the supervision of, the authority of Treasury Secretary Tim Geithner. By design, such a ruling would completely gut Barofsky's ability to compel transparency and exercise real oversight over how Treasury is administering TARP, since it would make him subordinate to one of the very officials whose actions Congress wanted him to oversee: the Treasury Secretary's. Barofsky has, quite rightly, protested the administration's efforts to destroy his independence, and has done so with increasing assertiveness as the administration's war on his oversight activities has increased. Why would an administration vowing a New Era of Transparency wage war on a watchdog whose only mission is to ensure transparency and accountability in these massive financial programs? It should take little effort to explain the significance of these clashes. read Glenn Greenwald's full, important piece at Salon.com
The Masters of Perfidy The first clue that something was terribly amiss with the insurance giant AIG should have been made manifest when the conglomerate began offering products--and financial products at that. What exactly does an insurance company produce? The short and nasty answer is that AIG manufactured precisely what it was meant to guard against. Namely, risk. Extreme risk. Ultimately, AIG was cashiered on several trillion dollars of risky financial products, sewn together by Ivy League math whizzes and aces in the arcane art of arbitrage. These were fanciful consolidations of debt that no sane insurer would ever have indemnified. When the company crashed in the dismal autumn of 2008, it turned sheepishly to the insurer of last resort for rescue: the U.S. government. The disgraced executives made the case that the rot in AIG was spreading and was threatening to go systemic. Too big to fail became the mantra of the bailout. AIG, perhaps the most recklessly managed company in the world, was so thoroughly enmeshed in nearly every sector of the American—and even global—economy that to let it sunder would be to risk the crash of the nation. Or so they said. Both the Bush and the Obama teams—themselves thoroughly marinated in the AIG mindset—quickly capitulated to financial extortion and infused the company with more than $182 billion in taxpayer cash—a sum that continues to rise each month with the inexorability of a lava dome inside an active volcano. Thus did the Obama administration in one of its first official acts endorse the remorseless logic of throwing good billions after bad. The Treasury Department and AIG’s management were so harmonious that Timothy Geithner allowed AIG’s executives to continue to run the company even after the bailout. The top brass at AIG had successfully duped Geithner and his political puppet master Larry Summers into buying the far-fetched idea that the collapse of AIG had been perpetrated by a handful of rogue traders operating out of satellite offices in distant London and suburban Wilton, Connecticut. Indeed, Geithner and Summers were so sympathetic to the plight of these corporate titans that they sanctioned more than $450 million in executive bonuses to managers at AIG, including the disgraced Financial Products Division. Of course, AIG had, among other giants of Wall Street, insured Goldman Sachs, which had made its own dementedly bad investments in subprime loans to the tune of tens of billions of dollars. And there was no way in hell that Geithner, Summers or Hank Paulson was going to let Goldman Sachs eat those loans. And that bit of political sleight-of-hand seems to have paid off handsomely for Goldman Sachs, which just posted record quarterly profits of $700 million only a brief nine months after it seemed like the investment house was on the verge of an ignominious collapse. In other words, the $54 billion in direct payments the feds had lavished on Goldman, Merrill-Lynch and the other Wall Street firms was just the icing on a very rich cake. Jeffrey St. Clair's full piece can be read at Counterpunch
Israel's Chilling Strategies
The passionate support for Israel expressed on talkback sections of websites, internet chat forums, blogs, Twitters and Facebook may not be all that it seems. Israel’s foreign ministry is reported to be establishing a special undercover team of paid workers whose job it will be to surf the internet 24 hours a day spreading positive news about Israel. Internet-savvy Israeli youngsters, mainly recent graduates and demobilised soldiers with language skills, are being recruited to pose as ordinary surfers while they provide the government’s line on the Middle East conflict. “To all intents and purposes the internet is a theatre in the Israeli-Palestinian conflict, and we must be active in that theatre, otherwise we will lose,” said Ilan Shturman, who is responsible for the project. The existence of an “internet warfare team” came to light when it was included in this year’s foreign ministry budget. About $150,000 has been set aside for the first stage of development, with increased funding expected next year. The team will fall under the authority of a large department already dealing with what Israelis term “hasbara”, officially translated as “public explanation” but more usually meaning propaganda. That includes not only government public relations work but more secretive dealings the ministry has with a battery of private organisations and initiatives that promote Israel’s image in print, on TV and online. In an interview this month with the Calcalist, an Israeli business newspaper, Mr Shturman, the deputy director of the ministry’s hasbara department, admitted his team would be working undercover. “Our people will not say: ‘Hello, I am from the hasbara department of the Israeli foreign ministry and I want to tell you the following.’ Nor will they necessarily identify themselves as Israelis,” he said. “They will speak as net-surfers and as citizens, and will write responses that will look personal but will be based on a prepared list of messages that the foreign ministry developed.” Rona Kuperboim, a columnist for Ynet, Israel’s most popular news website, denounced the initiative, saying it indicated that Israel had become a “thought-police state”. She added that “good PR cannot make the reality in the occupied territories prettier. Children are being killed, homes are being bombed, and families are starved.” Her column was greeted by several talkbackers asking how they could apply for a job with the foreign ministry’s team. more from Jonathan Cook in Counterpunch
Whitey on the Moon As the moon landing (40 years ago) is being commemorated all over the media landscape, I thought that I would make a rather unusual contribution. It's a classic song written and performed by Gil Scott-Heron in 1972. Among other things, you'll notice that he was a good twenty years ahead of the flowering of the rap music industry. An excellent musician and poet, Scott-Heron is now 60 years old. You can learn much more about him at Wikipedia
Don't Believe The Hype It's time to face the hard facts. Housing is not coming back; auto manufacturing is not coming back; and the buildout of a myriad of Home Depots, Lowes, Pizza Huts, Nail Salons, Strip Malls, Applebees, and Walmart store growth is not coming back to anything approaching the levels we have seen recently. Yes, there will be a bounce in all of those, but it is virtually guaranteed none of those will return to 2006-2007 levels of insanity for a decade, at least. A secular peak in consumption and risk taking has been reached and is reversing. Realistically, growth was far above where it should have been for close to seven years because of the Fed induced lending boom, insane lending standards, and extreme leverage and risk taking everywhere epitomized by "liar loans" and zero-percent down housing. Now is the payback time. We should be expecting growth to be below trend for the next seven years, with a few outliers tossed in for good measure to keep everyone excessively optimistic. more from Mike Sheldock
Cheney, the CIA, Assassinations, and Selective Amnesia Members of Congress have expressed outrage over the "secret" CIA assassination program that former vice president Dick Cheney allegedly ordered concealed from Congress. But this program — and the media descriptions of it — sounds a lot like the assassination policy implemented by President Bill Clinton, particularly during his second term in office. Partisan politics often require selective amnesia. Over the past decade, we have seen this amnesia take hold when it comes to many of President Bush’s most vile policies. And we are now seeing a pretty severe case overtake several leading Democrats. It makes for good speechifying to act as though all criminality began with Bush and — particularly these days — Cheney, but that is extreme intellectual dishonesty. The fact is that many of Bush’s worst policies (now being highlighted by leading Democrats) were based in some form or another in a Clinton-initiated policy or were supported by the Democrats in Congress with their votes. To name a few: the USA PATRIOT Act, the invasion of Iraq, the attack against Afghanistan, the CIA’s extraordinary rendition program, the widespread use of mercenaries and other private contractors in US war zones and warrant-less wire-tapping. Regarding the Bush-era assassination program, there is great reason to be skeptical that the program CIA Director Leon Panetta alleges was concealed from Congress is actually the program the public is currently being led to believe it is. Why would the CIA need to conceal a program that never was implemented and, if it never was implemented, why did Panetta need to shut it down? Moreover, who was running this inactive program from the minute Obama was sworn in until June 24 when Panetta supposedly announced its cancellation? This program — as it is currently being described — should hardly be a major scandal to members of the House and Senate Intelligence Committees, as some are now treating it. As they well know, President Obama has continued the Bush targeted assassination program using weaponized drones and special forces teams hunting "high value targets." As former CIA Counter-terrorism chief Vincent Cannistraro and others have pointed out, "The CIA runs drones and targets al-Qaeda safe houses all the time." Cannistraro told Talking Points Memo that there is no important difference between those kinds of attacks and "assassinations" with a gun or a knife. Now, if it turns out that the actual plan Cheney allegedly concealed is something other than what has been publicly described, that will be a different matter. more from Jeremy Scahill at antiwar.com
Mr. Fish at the LA Weekly
An Economic Report Card If we really want to have enduring, muscular economic growth, then where's the enhanced support for the truly cutting edge things that will make that happen? Repatriating telemarketing jobs from the Philippines and textile jobs from China isn't going to do it. And it won't just be "green" investment, a non-trivial part of which is misguided. It will instead be nanotechnology, stem-cell research, genetic engineering and the many other nascent industries that require highest order intellectual capital and can be the giant industries of tomorrow. Period. In the meantime, there's an ugly, deep recession to fix. The cause of the recession was straightforward, and the same as the cause of most other such booms and busts dating back to the start of the Industrial Age. Far too much leverage. In this case, it was too much leverage in the mortgage business, resulting in a stunningly rapid and massive $3+ trillion (or 80+%) build-up in mortgage loans in roughly four years, much of which went to unqualified buyers. And almost nobody noticed. This overleveraging was brought by gross mismanagement of the government's Fannie Mae and Freddie Mac programs, by underregulated lending entities including hedge funds and insurance companies, by conflicted rating agencies, and by too-low interest rates courtesy of the Fed. And whatever emergency "dry-powder" we had as a nation to deal with this kind of situation had already been spent on the multi-trillion dollar Iraqi War and other niceties, as evidenced by an increase in Federal debt under President Bush from $5 trillion to almost $11 trillion. And then In the midst of this increasingly fragile mortgage crisis, somebody inexplicably let Lehman Brothers fail, and everybody went running for cover. Ka-boom! more from Richard Vague at The Washington Note
The Sotomayor Confirmation Hearings Opening round; all you need to know: In the last two and a half months and today, my Republican colleagues have talked a great deal about judicial modesty and restraint. Fair enough to a point, but that point comes when these words become slogans, not real critiques of your record. Indeed, these calls for restraint and modesty, and complaints about "activist" judges, are often codewords, seeking a particular kind of judge who will deliver a particular set of political outcomes. "It is fair to inquire into a nominee's judicial philosophy, and we will here have a serious and fair inquiry. But the pretence that Republican nominees embody modesty and restraint, or that Democratic nominees must be activists, runs starkly counter to recent history. "I particularly reject the analogy of a judge to an 'umpire' who merely calls 'balls and strikes.' If judging were that mechanical, we would not need nine Supreme Court Justices. The task of an appellate judge, particularly on a court of final appeal, is often to define the strike zone, within a matrix of Constitutional principle, legislative intent, and statutory construction. "The 'umpire' analogy is belied by Chief Justice Roberts, though he cast himself as an 'umpire' during his confirmation hearings. Jeffrey Toobin, a well-respected legal commentator, has recently reported that '[i]n every major case since he became the nation's seventeenth Chief Justice, Roberts has sided with the prosecution over the defendant, the state over the condemned, the executive branch over the legislative, and the corporate defendant over the individual plaintiff.' Some umpire. And is it a coincidence that this pattern, to continue Toobin's quote, 'has served the interests, and reflected the values of the contemporary Republican party'? Some coincidence. "For all the talk of 'modesty' and 'restraint,' the right wing Justices of the Court have a striking record of ignoring precedent, overturning congressional statutes, limiting constitutional protections, and discovering new constitutional rights: the infamous Ledbetter decision, for instance; the Louisville and Seattle integration cases; the first limitation on Roe v. Wade that outright disregards the woman's health and safety; and the DC Heller decision, discovering a constitutional right to own guns that the Court had not previously noticed in 220 years. Some 'balls and strikes.' Over and over, news reporting discusses 'fundamental changes in the law' wrought by the Roberts Court's right wing flank. The Roberts Court has not kept the promises of modesty or humility made when President Bush nominated Justices Roberts and Alito. – Sen. Sheldon Whitehouse (R.I.)
Rich on Palin SARAH PALIN and Al Sharpton don’t ordinarily have much in common, but they achieved a rare harmonic convergence at Michael Jackson’s memorial service. When Sharpton told the singer’s children it was their daddy’s adversaries, not their daddy, who were “strange,” he was channeling the pugnacious argument the Alaska governor had made the week before. There was nothing strange about her decision to quit in midterm, Palin told America. What’s strange — or “insane,” in her lingo — are the critics who dare question her erratic behavior on the national stage. Sharpton’s bashing of Jackson’s naysayers received the biggest ovation of the entire show. Palin’s combative resignation soliloquy, though much mocked by prognosticators of all political persuasions, has an equally vociferous and more powerful constituency. In the aftermath of her decision to drop out and cash in, Palin’s standing in the G.O.P. actually rose in the USA Today/Gallup poll. No less than 71 percent of Republicans said they would vote for her for president. That overwhelming majority isn’t just the “base” of the Republican Party that liberals and conservatives alike tend to ghettoize as a rump backwater minority. It is the party, or pretty much what remains of it in the Barack Obama era. That’s why Palin won’t go gently into the good night, much as some Republicans in Washington might wish. She is not just the party’s biggest star and most charismatic television performer; she is its only star and charismatic performer. Most important, she stands for a genuine movement: a dwindling white nonurban America that is aflame with grievances and awash in self-pity as the country hurtles into the 21st century and leaves it behind. Palin gives this movement a major party brand and political plausibility that its open-throated media auxiliary, exemplified by Glenn Beck, cannot. She loves the spotlight, can raise millions of dollars and has no discernible reason to go fishing now except for self-promotional photo ops. The essence of Palinism is emotional, not ideological. Yes, she is of the religious right, even if she winks literally and figuratively at her own daughter’s flagrant disregard of abstinence and marriage. But family-values politics, now more devalued than the dollar by the philandering of ostentatiously Christian Republican politicians, can only take her so far. The real wave she’s riding is a loud, resonant surge of resentment and victimization that’s larger than issues like abortion and gay civil rights. the rest of Frank Rich's piece can be read in the NY Times
Disgusting Continuity Spencer Ackerman yesterday attended a Senate hearing at which the DOD's General Counsel, Jeh Johnson, testified. As Ackerman highlighted, Johnson actually said that even for those detainees to whom the Obama administration deigns to give a real trial in a real court, the President has the power to continue to imprison them indefinitely even if they are acquitted at their trial. About this assertion of "presidential post-acquittal detention power" -- an Orwellian term (and a Kafka-esque concept) that should send shivers down the spine of anyone who cares at all about the most basic liberties -- Ackerman wrote, with some understatement, that it "moved the Obama administration into new territory from a civil liberties perspective." Law professor Jonathan Turley was more blunt: "The Obama Administration continues its retention and expansion of abusive Bush policies — now clearly Obama policies on indefinite detention." In June, Robert Gibbs was repeatedly asked by ABC News' Jake Tapper whether accused Terrorists who were given a trial and were acquitted would be released as a result of the acquittal, but Gibbs -- amazingly -- refused to make that commitment. But this is the first time an Obama official has affirmatively stated that they have the "post-acquittal detention" power (and, to my knowledge, the Bush administration never claimed the power to detain someone even if they were acquitted). All of this underscores what has clearly emerged as the core "principle" of Obama justice when it comes to accused Terrorists -- namely, "due process" is pure window dressing with only one goal: to ensure that anyone the President wants to keep imprisoned will remain in prison. They'll create various procedures to prettify the process, but the outcome is always the same -- ongoing detention for as long as the President dictates. Change we can believe in, eh? And this is what is so incredibly infuriating: can you imagine how the very same politicians – including Obama – would react if an American citizen were to be held in a foreign country because he/she was accused of being an "enemy combatant", stood trial, was acquitted, and yet was retained indefinitely in spite of the acquittal? You'd need 1,000 towels to wipe the foam away from their collective mouths... More from Glenn Greenwald at Salon.com
Greenwald Nails It As many of you probably know, Dan Froomkin was fired by the Washington Post recently. He has just been hired by The Huffington Post, and Glenn Greenwald has a superb run-down of the importance of this move. He sums it up thusly: Clearly, journalism itself is not dying. What is dying -- and rightfully so -- is the staid, establishment-serving, passion-free, access-desperate, mindless stenographic model to which establishment journalism rigidly adheres. As The Post's Ombudsman reported from personal experience, Froomkin's firing left "an army of angry followers" and "an outcry from a loyal audience." People are obviously hungry for the type of real journalism Froomkin practices. The Huffington Post immediately capitalized on the Post's short-sighted and myopic decision to fire one of their most (and one of their very few) vibrant, passionate and innovative journalists. In this episode lies many insights about the real reasons establishment journalism is struggling severely. read Glenn's full piece at Salon.com
Double-Standards, American Style In a surprise move, Vice President Joe Biden signaled that the United States would not intervene to stop Iran from launching a "pre-emptive" attack on Israel. Biden's declaration came during an appearance on the ABC news-talk show, "This Week," with former Bill Clinton aide George Stephanopoulos. Here are Biden's exact words, as reported by the New York Times: “Look, we cannot dictate to another sovereign nation what they can and cannot do when they make a determination — if they make a determination — that they’re existentially threatened and their survival is threatened by another country.” It is of course well known that Israel possesses a formidable nuclear arsenal -- which it developed illegally, in secret, "rogue-state" style. It is also well-known that an Israeli attack on Iran is a constant, open topic of discussion -- and advanced planning and war-gaming -- at the highest levels of the Israeli government and military. Given the fact that a nuclear-armed nation is openly discussing and planning an attack on their country, the Iranians could quite logically "make a determination that they are existentially threatened and their survival is threatened by another country." Thus, by Biden's logic, it would be quite legitimate for the Iranians to mount an attack to "take out the nuclear program" in Israel, given the ever-present existential threat this poses to their survival. And the United States, according to Biden, would not do anything to stop such an attack, because Washington "cannot dictate to another sovereign nation" what it can do when it feels threatened to such a degree. This then is the actual, logical meaning of the actual words that Biden used on Sunday: If Iran's Supreme Leader "made a determination" that his nation's existence was in peril from attack by a very hostile nuclear-armed nation, then he would be justified in taking pre-emptive action to save his people. This Hobbesian, dog-eat-dog logic could also apply to any other potential conflict in the world. Any nation whose leaders declare is under "existential threat" is thereby justified in any pre-emptive attack to quell the threat. That's it. That's all it takes. That is the quintessence of the philosophy of international statecraft voiced by Biden on Sunday. But in practice, of course, this justification for military aggression is not meant to apply universally. It is reserved solely for the United States -- indeed, it is the very heart of the U.S. government's officially promulgated "National Security Doctrine"" -- and for any favored American clients and allies. Israel is the prime example of the latter category; any and all acts of aggression by its government are always justified -- and usually praised to high heaven -- by Washington. But this exception also applies to other nations whose aggression serves America's agenda at any given time: Ethiopia's American-aided invasion of Somalia, for example, a brutal act of aggression that killed thousands, displaced hundreds of thousands, radicalized thousands, exacerbated sectarian strife, and sparked off a new, vicious civil war -- all in service of America's Terror War "regime change" agenda. more from Chris Floyd
Money and Politics: Further metastasis Robert Hormats, Vice Chairman of Goldman Sachs, is to be installed as Under Secretary of Economics, Business, and Agricultural Affairs. This comes as one more, probably unnecessary reminder of the total control exercised by Wall Street over the Obama administration’s economic and financial policy. True, Hormats is “a talker rather than a decider” according to one former White House official, but he will find plenty of old friends used to making decisions, almost all of them uniformly disastrous for the U.S. and global economy. Among the familiar Wall Street faces that Hormats will encounter in his new post will that of Deputy Secretary of State Jacob Lew, lately Chief Financial Officer of Citigroup Alternative Investments Group which lost $509 million in the first quarter of 2008 alone. On visits to the White House he is sure to bump into Michael Froman, who also tore a swath through the Citi balance sheet at the alternative investments shop (they specialized in “esoteric” investments such as private highways) but is now Obama’s Deputy National Security Adviser for International Economic Affairs. If Froman is otherwise engaged, Hormats can interface with Froman’s deputy, David Lipton, who was until recently running Citi’s global country risk management effort. Citigroup is also well represented at Treasury, in the form of Lewis Alexander, formerly the bank’s chief economist and now Counselor to Treasury Secretary Timothy Geithner. Given the role played by all of the above in bankrupting us all, Alexander’s 2007 verdict on the onset of the mortgage crash, “I think that’s not going to spill more broadly into the economy and so I think we’re going to have a normal kind of housing cycle though the middle of this year,” can only have been a recommendation in the eyes of his current employer. Alexander’s function at Citi may have been merely to endorse the financial depredations of colleagues with economic blather, rather than exercise loss-making functions personally. Not so Deputy Treasury Secretary Neal Wolin, who has moved over to the number two job at the department from the Hartford Insurance Company, where he served as president and chief operating officer of the Property and Casualty Group. Hartford was one of the insurance companies that got suckered by the banks into backing their ruinous investments in real estate and other esoterica, but Wolin’s Treasury has just handed Hartford $3.4 billion of our money in the form of TARP funds. Hormats’ agricultural responsibilities will of necessity bring him into frequent contact with the Chairman of the Commodity Futures Trading Commission, Gary Gensler – a former Goldman partner. As Assistant Secretary of Treasury in the Clinton Adminsitration Gensler played a key role in greasing the skids for the notorious Commodity Futures Modernization Act of 2000, which set the stage for the great credit default swaps scam that underpinned the recent bubble and subsequent collapse. more – if you can stomach it – from Andrew Cockburn at Counterpunch
capitalism’s dirty little secret: Debt Just why is there so much debt in the Anglo-Saxon world? Bankers and regulators know well that it is in nobody’s long-term interests to have allowed borrowing to escalate to a position where the US now owes far more, as a multiple of the economy, than at the start of the Great Depression. The answer is capitalism’s dirty little secret: excessive lending was the only way to maintain the living standards of the vast bulk of the population at a time when wealth was being concentrated in the hands of an elite. The amount by which the elite has benefited is startling, and illustrates the problem with lightly regulated free markets: the rich get much richer while the rest do not get richer at all. According to Société Générale economists, the inflation-adjusted income of the highest-paid fifth of US earners has risen by 60 per cent since 1970, while it has fallen by more than 10 per cent for the rest. As was recently pointed out in the New York Review of Books, the Walton family, of Wal-Mart fame, is wealthier than the bottom third of the US population put together – about 100m people. These are staggering statistics, confirmed by measures such as the US and UK’s ever-rising Gini coefficients, which estimate income disparity. Another way of putting this is that the share of profits in gross domestic product is at a 100-year high, or was until very recently. Put simply, the benefits of economic growth have gone into the pockets of plutocrats rather than the bulk of the population. So why has there been no revolution? Because there was a solution: debt. If you couldn’t earn it, you could borrow it. Cheap financing was made widely available. Financial innovations such as the asset-backed securities market aided this process, as did government-sponsored agencies such as Fannie Mae and Freddie Mac. Regulators welcomed it all while perhaps taking insufficient account of the moral hazard problem it posed: that ever-increasing leverage meant the authorities had to keep interest rates low, otherwise the debt burden would cripple consumption. This prompted more leverage, which exacerbated the problem. more from Ben Funnell in the Financial Times
Health Care: Dispelling Some Myths Many in the United States fear that people would abuse a free health care system, causing overcrowding and a compromised level of care. Others claim that a single payer system would limit the freedoms of both doctor and patient. These claims, propagated by the corporate media in the United States, are a hollow attempt to keep those in the US from organizing to demand single payer health care. The right to health care is guaranteed in the Venezuelan Constitution, which was written and ratified by the people in 1999. Through implementing a state-funded social program called Barrio Adentro, or inside the barrio, free comprehensive health care is available to all Venezuelans. Beginning in June 2003 through a trade pact with Cuba, Venezuela began to bring Cuban doctors, medical technology, and medications into rural and urban communities free of charge in exchange for low-cost oil. The 1.5 million dollar per year program expanded to provide a broad network of small neighborhood clinics, larger regional clinics, and hospitals which aim to serve the entire Venezuelan population. (1) Chavez has referred to this new health care system as the “democratization of health care” stating that “health care has become a fundamental social right and the state will assume the principal role in the construction of a participatory system for national public health.” (2) In Venezuela, not only is health care a right; it is recognized as essential for true participatory democracy. [snip] During my time in Venezuela, I developed a cough that went on for three weeks and progressively worsened. Finally, after I had become incredibly congested and developed a fever, I decided to attend a Barrio Adentro clinic. The closest one available was a Barrio Adentro II Centro de Diagonostico Integral (CDI) and I headed in without my medical records or calling to make an appointment. Immediately, I was ushered into a small room where Carmen, a friendly Cuban doctor, began questioning me about my symptoms. She listened to my lungs and walked me over to another examination room where, again without waiting, I had x-rays taken. Afterwards, the technician walked me to a chair and apologized profusely that I had to wait for the x-rays to be developed, promising that it would take no more than five minutes. Sure enough, five minutes later he returned with both x-rays developed. Carmen studied the x-rays and informed me that I had pneumonia, showing me the telltale shadows. She sent me away with my x-rays, three medications to treat my pneumonia, congestion, and fever, and made me promise to come back if my conditioned failed to improve or worsened within three days. I walked out of the clinic with a diagnosis and treatment within twenty-five minutes of entering, without paying a dime. There was no wait, no paperwork, and no questions about my ability to pay, my nationality, or whether, as a foreigner, I was entitled to free comprehensive health care. There was no monetary value connected with my physical well-being; the care I received was not contingent upon my ability to pay. I was treated with dignity, respect, and compassion, my illness was cured and I was able to continue with my journey in Venezuela. read the rest of Rady Ananda's informative piece at Coalition of the Obvious
Recovery? That's a Good One. Happy-face media reporting of economic news is providing the usual upbeat spin on Friday’s debt-deflation statistics. The Commerce Department’s National Income and Product Accounts (NIPA) for May show that U.S. “savings” are now absorbing 6.9 percent of income. I put the word “savings” in quotation marks because this 6.9 per cent is not what most people think of as savings. It is not money in the bank to draw out in rainy-day emergencies like losing one’s job, as thousands are every day. The statistic means that 6.9 per cent of national income is being earmarked to pay down debt – the highest savings rate in 15 years, up from actually negative rates (living on borrowed credit) just a few years ago. The only way in which these savings are “money in the bank” is that they are being paid by consumers to their banks and credit card companies. Income paid to reduce debt is not available for spending on goods and services. It therefore shrinks the economy, aggravating the depression. So why is the jump in “saving” good news? It certainly is a good idea for consumers to get out of debt. But the media are treating this diversion of income as if it were a sign of confidence that the recession may be ending and that Obama’s “stimulus” plan is working. The Wall Street Journal has reported that Social Security recipients of one-time government payments “seem unwilling to spend right away,” while The New York Times wrotethat“many people were putting that money away instead of spending it.” It is as if people can afford to save more. The reality is that most consumers have little real choice but to pay. Unable to borrow more as banks cut back credit lines, their “choice” is either to pay their mortgage and credit card bill each month, or lose their homes and see their credit ratings slashed, pushing up penalty interest rates near 20 per cent To avoid this fate, families are shifting to cheaper and less nutritious food, eating out less or at fast food restaurants, and cutting back on vacation spending. So it seems contradictory to applaud these “savings” (that is, debt-repayment) statistics as an indication that the economy may emerge from depression in the next few months. While unemployment approaches the 10 per cent rate and new layoffs are being announced every week, isn’t the Obama administration taking a big risk in telling voters that its stimulus plan is working? What will people think this winter when markets continue to shrink? How thick is Obama’s Teflon? more from Michael Hudson at Counterpunch
Does Obama Have What It Takes? For the first time, I'm actually quite afraid at having Barack Obama occupying the office of President of the United States. I hate to say it, but McCain was right - Obama doesn't have the experience needed for the job under the present circumstances. At some not too distant point, this man is going to have to stand alone, break away from the chains of all his controllers and sycophants, agonize as he has never done before, and make a decision which will have incalculable consequences. It really won't matter whether the decision will be about direct intervention in Iran or calling North Korea's bluff or calling out the Army and FEMA mercenaries to squash riots in Los Angeles, Gary, Des Moines, or wherever. If he really wants his job, he'll have to make the decision himself and order that it be carried out. Watching the President's performance so far, I have no faith that he is ready for that ... Under Bush, and now under Obama, the presidency is really not the President. It is, in fact, a group of very powerful people, most of whom have been in and around the corridors, lobbies, and back rooms of Washington and its tentacles for a very long time. Whereas The Dubbleduh-Chainey Gang was run by operatives from the Nixon, Reagan, and Bush I regimes, Obama's syndicate, of which he is only the mouthpiece, is crawling with denizens of the Carter and Clinton administrations with grand geopolitical agendas, Cold War mindsets, and incredible, conflicting egos. It is very difficult for "progressives" to see that, in some ways, The Gang was extremely successful in accomplishing its goals. The primary reasons for that were one-mindedness and lock-step discipline. If you didn't walk like the other ducks, you ditched the pond or were driven out. There was no discussion. The goals were clear. You were with 'em or agin 'em, no matter who you were. And essentially, there was one guy in charge (although it obviously wasn't George). Obama has a distinct disadvantage here. He has gathered into the Executive branch a motley crew of old hands who have enormous experience, but who are certainly not of one mind. And Obama is not in the center, he's on the periphery. Such a group would work fantastically well if it had a strong, well-seasoned, very knowledgeable leader; one who could say, "OK, guys, thanks for the input. Now get the hell out of my office. I'll let you know in two hours what we're going to do." Barack Obama is not that man. more from ddjango
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