One Year Later: Little Has Changed
Friday, Sep. 25, 2009
Special to the Star-Telegram
Much of the bailout money that has been distributed is being used against the public — to artificially raise the prices of everyday essentials. And why? Solely so that those who received the funds can show fast profits.
The intense concern and panic that swept the nation after Lehman Brothers collapsed last September has apparently subsided. Even our officials have cautiously said that the recession probably ended last month; in a moment of prudent honesty, they added that it might be a long time before employment numbers show improvement.
Many areas are taken into account for such assessments, including improvement in new car sales and positive signs in housing construction. Another sign was surely a resurgent stock market, which has returned $2 trillion of the money lost by people who held equities, either privately or in retirement plans prior to the crash.
But things aren’t always what they seem. In the past week the numbers coming out of Sacramento’s home market were more than disturbing. Foreclosures in that metropolitan area have now topped 42,000. From its peak in the summer of 2005, the average price of a home there has fallen by 53 percent, and the sales rate for homes is headed toward 1967’s figures.
This illustrates why we are fortunate to be in Texas during this economic downturn. In the last couple of months my neighbor across the street put her house on the market — the smallest house in the neighborhood, at 1,480 square feet — and sold it for $188,000 to the second person who looked at it. She pocketed a sizable amount of equity, which is not bad for the few years she was in the property.
Upbeat official pronouncements notwithstanding, however, much of what is happening elsewhere right now is artificial. And some is simply abuse of the very government policies designed to save and re-grow our economy after the events of 2007 – 2009.
None of This Is Natural
A quick review of the last 12 months: Washington stepped in and saved our banking system and our auto companies, put stimulus funding into the economy, and then offered rebates to housing and automobile buyers to spur sales. In turn a loud outcry arose from some sectors of our society. Citizens concerned about the country’s deficit spending– and especially about deepening the nation’s debt should any sort of health care reform be passed – made themselves heard in possibly the angriest and most passionate protests heard since the sixties.
Many Americans quietly share some of the protesters’ voiced concerns about the increasing spending and debt; still, you have to wonder where our country would be had the government stood back and did nothing when the crisis threatened to become overwhelming. The easy answer is that things would have been much worse and could possibly have become financially irreversible in the near to mid-term.
That being said, had these bailouts been more carefully thought out and intelligent rules put in place for the funds’ distribution, it’s also likely that we would already be many miles down the road toward complete recovery.
How’s that? Much of the bailout money that has been distributed is being used against the public — to artificially raise the prices of everyday essentials. And why? Solely so that those who received the funds can show fast profits.
Keep in mind that this is a period of income deflation; in 2008 the average household income fell to $50,300, down from $52,200 in 2007. And since more Americans have taken wage cuts this year, the average household income may have fallen well below $50,000, but those figures will not be available until this time next year.
Show Us the Money
Here’s how the bailout money distributed has been spent and how, in many cases, its impact on Americans has been negative.
Former Secretary Henry Paulson’s concept of saving the banks was to buy up their toxic assets, thereby improving the balance sheets of the most troubled financial firms. Once Congress passed the legislation, Paulson reversed his sales pitch – probably because in reality his first plan was unworkable in the short term – and simply threw massive amounts of money at these firms to restore their liquidity.
This was another way to stop the financial collapse … but.
While it became a big issue in Europe first, where the Central Banks likewise threw a trillion dollars into the liquidity of their troubled firms, it has been discovered that some of these monies were not used to restore and expand lending to move economies upward. Instead, like in Europe, many “too big to fail” U.S. banks apparently used some of those funds to purchase equities and commodities for short-term (and in some cases, massive) profits. In a nutshell, they went back to playing the exact same games that led us into this problem to begin with.
Now, it is true that the funds being poured into it by these financial firms helped the stock market rise. That’s why people whose personal stocks or 401K plans lost big have seen dramatic improvements in their net worth. But the cash-infused market’s new momentum is also the reason that oil jumped from $33 a barrel to well over $70 – in a year when worldwide trade and economies were not doing well and there was zero movement toward higher oil demand.
In practical terms, what that means is that the average family (two cars, both being driven 15,000 miles annually) has paid somewhere in the neighborhood of $1,400 more than it should have for gasoline over and above what the world’s economic reality would have justified.
Again, this was solely a function of TARP and cheap borrowed funds being used for speculation instead of restoring lending to expand the economy. In the two months since Germany’s Der Spiegel broke that story in Europe, investigative reporters have found the same scenario unfolding on Wall Street.
At the same time, many of these same lending institutions raised their interest rates on credit cards and home equity loans to the public. That’s despite the fact that those firms can now borrow money from the Fed at virtually no interest— actually, it’s negative interest when you factor in the last few months of non-core inflation.
What caused that non-core inflation? Well, higher prices at the pump for oil and gasoline for one.
Consider what is going on here. The inflation affecting the public at large was caused by lending institutions’ returning to the commodities market, while the average family has seen its income decline. And at the same time, just as the average American wants to reduce his or her personal indebtedness, those same lending institutions have raised their interest rates to maximize their profits. Not to mention new fees and overdraft charges on checking accounts.
The media reports that things must be getting better because of the quick return to massive profits being posted by these banks on Wall Street. Meanwhile, Citigroup had to apologize because its lead oil trader earned $100 million.
Create Artificial Demand?
Likewise, the government handed out and is still offering $8,000 for first-time homebuyers: Anyone is eligible who hasn’t purchased a home in the last three years and whose annual income is less than $150,000. In periods of deleveraging, like now, there should be home bargains galore for the asking – and in most metropolitan areas there are. But there would be even more exceptional home bargains to be had, without using “government” monies, if Washington had just decided to allow the foreclosures and forced them onto the market faster.
Keep in mind that most analysts believe that only a third of the financial firms’ toxic assets have been disposed of as of now (not including commercial properties). At the same time, changes in the mark-to-market rules allow banks to list properties on the books at far above their current market value. While these changes help banks’ current financial statements, they do nothing to clean up the mess in a timely fashion.
Moreover, because these moves don’t do that, house prices don’t fall to their natural levels; likely even more affordable for those with depreciated earnings, those prices would stimulate demand. Instead, the $8,000 home rebate is there to artificially create demand, thereby slowing the residential housing price fall-off.
The cash for clunkers program worked the same way. Although in many cases the government pitched in $3,500 for someone to trade to a more fuel-efficient automobile, those trade-ins were not worthless. In fact, many of those cars were worth $2,000 or more, so the government was simply giving someone an extra $1,500 or less to trade this summer. Certainly, some of the cars were junk – but many of the people who rushed to take the government funds found out their trade-ins were worth as much as or more than the government was offering.
To be fair, this type of massive government intervention has happened not just in America but worldwide. So, while many marched on Washington in anger, protesting the deficits or the potential for higher taxes in the future, they apparently overlooked how their paychecks are shrinking today, and how much higher prices for energy and interest rates are above what they should be, given the past two and one-half years’ economic conditions.
Ultimately, in spite of what I’ve written here, the government may not have had any choice in the matter. That’s the saddest statement of all.
Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, given by the Anderson School of Business at UCLA, and is a member of the American Historical Association. He reviews new cars every Friday morning at 7:15 on Fox Four’s Good Day, contributes articles to BusinessWeek Online and hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF. E-mail: firstname.lastname@example.org, Read all of Ed’s work at his web site, www.insideautomotive.com.
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The Truth-O-Meter Says: Goldman Sachs was Barack Obama’s “No. 1 private contributor.”
Michael Moore on Wednesday, September 23rd, 2009 in an interview on “The Colbert Report”
Barack Obama got many campaign contributions from Goldman Sachs
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Liberal filmmaker Michael Moore has a new film coming out — Capitalism: A Love Story — and he appeared on Comedy Central’s The Colbert Report to promote it.
The show’s ironically conservative host, Stephen Colbert, defended capitalism and the bailouts of late 2008, which led to a mock debate between them.
At first, Wall Street was actually angry about the bailouts, Colbert claimed. “because it might come with strings attached,” he explained. “But they forgave Obama when he didn’t add any. Now all is forgiven.”
“That’s why you like Obama so much now?” Moore asked.
“I don’t like Obama so much,” Colbert said. “On this, I do. And your film is helping me like Obama, because you’re a critic of his. You think he’s in the pocket of guys like Goldman Sachs.”
“I point out in the film that Goldman Sachs is his No. 1 private contributor,” Moore answered. “But I voted for the guy. I’m still hopeful that he’s going to do the right thing and side with us, and not Wall Street. But the jury’s out on that.”
We’ll let you draw your own conclusions on their debate. We wanted to check Moore’s statement about Obama’s contributors and the financial services firm Goldman Sachs.
Obama made a big deal during the election that he didn’t accept money from federal political action committees or lobbyists.
But laws require individuals to disclose their occupation and their employer when they donate to federal political candidates. We checked with the Center for Responsive Politics, a well-respected nonpartisan group that specializes in analyzing campaign data. Their numbers include contributions from employees and their immediate families.
Their analysis of the 2008 presidential campaign found that University of California employees were Obama’s top donor, giving a collective $1.6 million. That system is run by the state of California, and hence is a public employer.
No. 2 was Goldman Sachs. Goldman employees gave Obama $994,795.
Obama’s next biggest donors were the employees of Harvard University, Microsoft, Google, Citigroup, JPMorgan Chase, Time Warner, the law firm Sidley Austin, and Stanford University. View Obama’s complete list and amounts here.
http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638 Incidentally, Goldman Sachs ranked No.4 on John McCain’s list of employee contributions, at $230,095.
Moore said that Goldman Sachs is Obama’s “No. 1 private contributor.” The data shows that is correct. We rate his statement True.
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Why the Dow is Hitting 10,000 Even When Consumers Can’t Buy And Business Cries “Socialism”
Tuesday, September 22, 2009
So how can the Dow Jones Industrial Average be flirting with 10,000 when consumers, who make up 70 percent of the economy, have had to cut way back on buying because they have no money? Jobs continue to disappear. One out of six Americans is either unemployed or underemployed. Homes can no longer function as piggy banks because they’re worth almost a third less than they were two years ago. And for the first time in more than a decade, Americans are now having to pay down their debts and start to save.
Even more curious, how can the Dow be so far up when every business and Wall Street executive I come across tells me government is crushing the economy with its huge deficits, and its supposed “takeover” of health care, autos, housing, energy, and finance? Their anguished cries of “socialism” are almost drowning out all their cheering over the surging Dow.
The explanation is simple. The great consumer retreat from the market is being offset by government’s advance into the market. Consumer debt is way down from its peak in 2006; government debt is way up. Consumer spending is down, government spending is up. Why have new housing starts begun? Because the Fed is buying up Fannie and Freddie’s paper, and government-owned Fannie and Freddie are now just about the only mortgage games remaining in play.
Why are health care stocks booming? Because the government is about to expand coverage to tens of millions more Americans, and the White House has assured Big Pharma and health insurers that their profits will soar. Why are auto sales up? Because the cash-for-clunkers program has been subsidizing new car sales. Why is the financial sector surging? Because the Fed is keeping interest rates near zero, and the rest of the government is still guaranteeing any bank too big to fail will be bailed out. Why are federal contractors doing so well? Because the stimulus has kicked in.
In other words, the Dow is up despite the biggest consumer retreat from the market since the Great Depression because of the very thing so many executives are complaining about, which is government’s expansion. And regardless of what you call it – Keynesianism, socialism, or just pragmatism – it’s doing wonders for business, especially big business and Wall Street. Consumer spending is falling back to 60 to 65 percent of the economy, as government spending expands to fill the gap.
The problem is, our newly expanded government isn’t doing much for average working Americans who continue to lose their jobs and whose belts continue to tighten, and who are getting almost nothing out of the rising Dow because they own few if any shares of stock. Despite the happy Dow and notwithstanding the upbeat corporate earnings, most corporations are still shedding workers and slashing payrolls. And the big banks still aren’t lending to Main Street.
Trickle-down economics didn’t work when the supply-siders were in charge. And it’s not working now, at a time when — despite all their cries of “socialism” — big business and Wall Street are more politically potent than ever.
Volume XIV No. 39: September 25, 2009
One lesson Congress flunks over and over is the Economics 101 principle of sunk costs. Your mother knew it well: She always told you “don’t throw good money after bad.” Lawmakers will have another opportunity to get the answer right this fall when they decide whether to build a second engine for the Navy’s next-generation fighter plane. We’ll provide the cheat sheet on this one: Don’t do it.
Defense Secretary Robert Gates has decreed the F-35 Joint Strike Fighter (JSF) aircraft our military future in the skies. Thirteen years into Lockheed Martin’s contract, the $250 billion-dollar program is behind schedule, and Gates has cut back on other programs in the defense budget in order to invest in the F-35’s success.
One such program would develop a second engine for the plane in addition to the one Pratt & Whitney of Connecticut was originally contracted to build. Congress first allocated money for the alternate engine—a collaboration of General Electric of Ohio and Rolls Royce, which is based in the United Kingdom but operates a plant in Indianapolis—in 1996 on the argument that competition would drive contractors’ performance up and prices down.
But a number of studies commissioned from various agencies on whether or not a second F-35 engine program would save money found that cost savings would be negligible at best. Potential savings were greatly reduced when the high price of maintaining two separate production lines, supply chains and management teams was factored in. Plus, any cost savings would take at least a decade to realize because the second engine is so far behind developmentally.
Some proponents claim other potential benefits to a second engine, including industrial base sustainment, contracting accountability and convenience for our international partners. In a perfect world, perhaps these issues would be more important than cost. But fighting two wars in a desolate economic environment does not afford us the luxury of spending billions to address them all. And the termination of one contract, no matter how large, won’t cripple our industrial base: A $636 billion defense budget should provide plenty of projects for defense contractors in the foreseeable future.
The Defense Department has tried to stop funding for the alternate engine for three years now, but Congress keeps plugging money back into defense appropriations bills. The ante was upped this year when the Obama administration threatened to veto the 2010 defense bill if it contained provisions that could “disrupt” the program. “Expenditures on an alternate engine for the JSF are unnecessary and divert resources from the overall JSF program,” the administration said.
But lawmakers have shown they are willing to employ significant shenanigans to spread the $100 billion engine market around as many districts as possible. The House added $560 million for the program in their version of the bill this summer, but Senate Appropriations Chairman Daniel Inouye (D-HI)—who has historically supported the program—opted not to include the money in the Senate bill, deferring the debate until conference.
This appears engineered to allow Congressional boosters time to come up with a report on the program’s “sunk costs.” Since the $2.5 billion added to spending bills for the program over the past 12 years is public knowledge, we can only assume this report represents an attempt to inflate the number by adding associated costs. Sounds like lawmakers are betting that taxpayers haven’t learned their economic lessons either. But we can all understand mother’s lesson—don’t throw good money after bad.
Let us know what you think.
Going on at Taxpayer.net This Week
UPDATE: Fiscal Year 2010 Earmark Databases – Senate Defense Added (9/24)
House Approves 3-Month Highway Bill Extension
TCS Weighs in on Proposed Changes to the DOE Loan Guarantee Program
TCS Earmark Analysis and Proposal for Reform
Bailout Bank Bios
TCS Staff are compiling profiles of all financial institutions receiving funds under the 2008 Emergency Economic Stabilization Act. See all completed bios here.
TCS in the News
TCS was cited in dozens of stories this past week. Check them all out in the Headlines About TCS section of our redesigned website.
“At this point… where a dollar added to one program takes away from another program that we think is more important, we feel strongly about the fact that there is not a need for a second engine.”
-Defense Secretary Robert M. Gates commenting on the F-35. Appeared in London South East on August 31st, 2009.
the weekly wastebasket at www.taxpayer.net
Big Brother “Fusion Centers” Part of US Domestic Intelligence and Surveillance Apparatus
Mammoth Budget: $75 Billion, 200,000 Operatives
By Tom Burghardt
Global Research, September 26, 2009
Fusion Centers Will Have Access to Classified Military Intelligence
Speaking at San Francisco’s Commonwealth Club September 15, Director of National Intelligence Admiral Dennis C. Blair, disclosed that the current annual budget for the 16 agency U.S. “Intelligence Community” (IC) clocks-in at $75 billion and employs some 200,000 operatives world-wide, including private contractors.
In unveiling an unclassified version of the National Intelligence Strategy (NIS), Blair asserts he is seeking to break down “this old distinction between military and nonmilitary intelligence,” stating that the “traditional fault line” separating secretive military programs from overall intelligence activities “is no longer relevant.”
As if to emphasize the sweeping nature of Blair’s remarks, Federal Computer Week reported September 17 that “some non-federal officials with the necessary clearances who work at intelligence fusion centers around the country will soon have limited access to classified terrorism-related information that resides in the Defense Department’s classified network.” According to the publication:
Under the program, authorized state, local or tribal officials will be able to access pre-approved data on the Secret Internet Protocol Router Network. However, they won’t have the ability to upload data or edit existing content, officials said. They also will not have access to all classified information, only the information that federal officials make available to them.
The non-federal officials will get access via the Homeland Security department’s secret-level Homeland Security Data Network. That network is currently deployed at 27 of the more than 70 fusion centers located around the country, according to DHS. Officials from different levels of government share homeland security-related information through the fusion centers. (Ben Bain, “DOD opens some classified information to non-federal officials,” Federal Computer Week, September 17, 2009)
Since the September 11, 2001 terrorist attacks, the federal government has encouraged the explosive growth of fusion centers. As envisaged by securocrats, these hybrid institutions have expanded information collection and sharing practices from a wide variety of sources, including commercial databases, among state and local law enforcement agencies, the private sector and federal security agencies, including military intelligence.
But early on, fusion centers like the notorious “red squads” of the 1960s and ’70s, morphed into national security shopping malls where officials monitor not only alleged terrorists but also left-wing and environmental activists deemed threats to the existing corporate order.
It is currently unknown how many military intelligence analysts are stationed at fusion centers, what their roles are and whether or not they are engaged in domestic surveillance.
If past practices are an indication of where current moves by the Office of the Director of National Intelligence (ODNI) will lead, in breaking down the “traditional fault line” that prohibits the military from engaging in civilian policing, then another troubling step along the dark road of militarizing American society will have been taken.
U.S. Northern Command: Feeding the Domestic Surveillance Beast
Since its 2002 stand-up, U.S. Northern Command (USNORTHCOM) and associated military intelligence outfits such as the Defense Intelligence Agency (DIA) and the now-defunct Counterintelligence Field Activity (CIFA) have participated in widespread surveillance of antiwar and other activist groups, tapping into Pentagon and commercial databases in a quixotic search for “suspicious patterns.”
As they currently exist, fusion centers are largely unaccountable entities that function without proper oversight and have been involved in egregious civil rights violations such as the compilation of national security dossiers that have landed activists on various terrorist watch-lists.
Antifascist Calling reported last year on the strange case of Marine Gunnery Sgt. Gary Maziarz and Col. Larry Richards, Marine reservists stationed at Camp Pendleton in San Diego. Maziarz, Richards, and a group of fellow Marines, including the cofounder of the Los Angeles County Terrorist Early Warning Center (LACTEW), stole secret files from the Strategic Technical Operations Center (STOC).
When they worked at STOC, the private spy ring absconded with hundreds of classified files, including those marked “Top Secret, Special Compartmentalized Information,” the highest U.S. Government classification. The files included surveillance dossiers on the Muslim community and antiwar activists in Southern California.
According to the San Diego Union-Tribune which broke the story in 2007, before being run to ground Maziarz, Richards and reserve Navy Commander Lauren Martin, a civilian intelligence contractor at USNORTHCOM, acquired information illegally obtained from the Secret Internet Protocol Router Network (SIPRNet). This is the same classified system which fusion centers will have access to under the DoD’s new proposal.
Claiming they were acting out of “patriotic motives,” the Marine spies shared this classified counterterrorism information with private contractors in the hope of obtaining future employment. Although they failed to land plush private sector counterterrorism jobs, one cannot rule out that less than scrupulous security firms might be willing to take in the bait in the future in order to have a leg up on the competition.
So far, only lower level conspirators have been charged. According to the Union-Tribune “Marine Cols. Larry Richards and David Litaker, Marine Maj. Mark Lowe and Navy Cmdr. Lauren Martin also have been mentioned in connection with the case, but none has been charged.” One codefendant’s attorney, Kevin McDermott, told the paper, “This is the classic situation that if you have more rank, the better your chance of not getting charged.”
Sound familiar? Call it standard operating procedure in post-constitutional America where high-level officials and senior officers walk away scott-free while grunts bear the burden, and do hard time, for the crimes of their superiors.
Fusion Centers and Military Intelligence: Best Friends Forever!
Another case which is emblematic of the close cooperation among fusion centers and military intelligence is the case of John J. Towery, a Ft. Lewis, Washington civilian contractor who worked for the Army’s Fort Lewis Force Protection Unit.
In July, The Olympian and Democracy Now! broke the story of how Towery had infiltrated and spied on the Olympia Port Militarization Resistance (OlyPMR), an antiwar group, and shared this information with police.
Since 2006, the group has staged protests at Washington ports and has sought to block military cargo from being shipped to Iraq. According to The Olympian:
OlyPMR member Brendan Maslauskas Dunn said in an interview Monday that he received a copy of the e-mail from the city of Olympia in response to a public records request asking for any information the city had about “anarchists, anarchy, anarchism, SDS (Students for a Democratic Society), or Industrial Workers of the World.” (Jeremy Pawloski, “Fort Lewis investigates claims employee infiltrated Olympia peace group,” The Olympian, July 27, 2009)
What Dunn discovered was highly disturbing to say the least. Towery, who posed as an anarchist under the name “John Jacob,” had infiltrated OlyPMR and was one of several listserv administrators that had control over the group’s electronic communications.
The civilian intelligence agent admitted to Dunn that he had spied on the group but claimed that no one paid him and that he didn’t report to the military; a statement that turned out to be false.
Joseph Piek, a Fort Lewis spokesperson confirmed to The Olympian that Towery was a contract employee and that the infiltrator “performs sensitive work within the installation law enforcement community,” but “it would not be appropriate for him to discuss his duties with the media.”
In September, The Olympian obtained thousands of pages of emails from the City of Olympia in response to that publication’s public-records requests. The newspaper revealed that the Washington Joint Analytical Center (WJAC), a fusion center, had copied messages to Towery on the activities of OlyPMR in the run-up to the group’s November 2007 port protests. According to the paper,
The WJAC is a clearinghouse of sorts of anti-terrorism information and sensitive intelligence that is gathered and disseminated to law enforcement agencies across the state. The WJAC receives money from the federal government.
The substance of nearly all of the WJAC’s e-mails to Olympia police officials had been blacked out in the copies provided to The Olympian. (Jeremy Pawloski, “Army e-mail sent to police and accused spy,” The Olympian, September 12, 2009)
Also in July, the whistleblowing web site Wikileaks published a 1525 page file on WJAC’s activities.
Housed at the Seattle Field Office of the FBI, one document described WJAC as an agency that “builds on existing intelligence efforts by local, regional, and federal agencies by organizing and disseminating threat information and other intelligence efforts to law enforcement agencies, first responders, and key decision makers throughout the state.”
Fusion centers are also lucrative cash cows for enterprising security grifters. Wikileaks investigations editor Julian Assange described the revolving-door that exists among Pentagon spy agencies and the private security firms who reap millions by placing interrogators and analysts inside outfits such as WJAC. Assange wrote,
There has been extensive political debate in the United States on how safe it would be to move Guantánamo’s detainees to US soil–but what about their interrogators?
One intelligence officer, Kia Grapham, is hawked by her contracting company to the Washington State Patrol. Grapham’s confidential resume boasts of assisting in over 100 interrogations of “high value human intelligence targets” at Guantánamo. She goes on, saying how she is trained and certified to employ Restricted Interrogation Technique: Separation as specified by FM 2-22.3 Appendix M.
Others, like, Neoma Syke, managed to repeatedly flip between the military and contractor intelligence work–without even leaving the building.
The file details the placement of six intelligence contractors inside the Washington Joint Analytical Center (WAJAC) on behalf of the Washington State Patrol at a cost of around $110,000 per year each.
Such intelligence “fusion” centers, which combine the military, the FBI, state police, and others, have been internally promoted by the US Army as means to avoid restrictions preventing the military from spying on the domestic population. (Julian Assange, “The spy who billed me twice,” Wikileaks, July 29, 2009)
The Wikileaks documents provide startling details on how firms such as Science Applications International Corporation (SAIC), The Sytex Group and Operational Applications Inc. routinely place operatives within military intelligence and civilian fusion centers at a premium price.
Assange wonders whether these job placements are not simply evidence of corruption but rather, are “designed to evade a raft of hard won oversight laws which apply to the military and the police but not to contractors? Is it to keep selected personnel out of the Inspector General’s eye?” The available evidence strongly suggests that it is.
As the American Civil Liberties Union documented in their 2007 and 2008 reports on fusion center abuses, one motivation is precisely to subvert oversight laws which do not apply to private mercenary contractors.
The civil liberties’ watchdog characterized the rapid expansion of fusion centers as a threat to our constitutional rights and cited specific areas of concern: “their ambiguous lines of authority, the troubling role of private corporations, the participation of the military, the use of data mining and their excessive secrecy.”
And speaking of private security contractors outsourced to a gaggle on intelligence agencies, investigative journalist Tim Shorrock revealed in his essential book Spies For Hire, that since 9/11 “the Central Intelligence Agency has been spending 50 to 60 percent of its budget on for-profit contractors, or about $2.5 billion a year, and its number of contract employees now exceeds the agency’s full-time workforce of 17,500.”
Indeed, Shorrock learned that “no less than 70 percent of the nation’s intelligence budget was being spent on contracts.” However, the sharp spike in intelligence outsourcing to well-heeled security corporations comes with very little in the way of effective oversight.
The House Intelligence Committee reported in 2007 that the Bush, and now, the Obama administrations have failed to develop a “clear definition of what functions are ‘inherently governmental’;” meaning in practice, that much in the way of systematic abuses can be concealed behind veils of “proprietary commercial information.”
As we have seen when the Abu Ghraib torture scandal broke in 2004, and The New York Times belatedly blew the whistle on widespread illegal surveillance of the private electronic communications of Americans in 2005, cosy government relationships with security contractors, including those embedded within secretive fusion centers, will continue to serve as a “safe harbor” for concealing and facilitating state crimes against the American people.
After all, $75 billion buys a lot of silence.
Tom Burghardt is a researcher and activist based in the San Francisco Bay Area. In addition to publishing in Covert Action Quarterly and Global Research, an independent research and media group of writers, scholars, journalists and activists based in Montreal, his articles can be read on Dissident Voice, The Intelligence Daily, Pacific Free Press and the whistleblowing website Wikileaks. He is the editor of Police State America: U.S. Military “Civil Disturbance” Planning, distributed by AK Press
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Research Counters Criticisms Of Canadian Health Care System
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[Sep 18, 2009]
Bloomberg reports that allegations that the Canadian health care system offers inferior treatment, rationing and long lines are wrong, according to wide-ranging and long-standing research. Bloomberg: “The allegations are wrong by almost every measure, according to research by the Organization for Economic Cooperation and Development and other independent studies published during the past five years. While delays do occur for non-emergency procedures, data indicate that Canada’s system of universal health coverage provides care as good as in the U.S., at a cost 87 percent less for each person. … Canadians live two to three years longer than Americans and are as likely to survive heart attacks, childhood leukemia, and breast and cervical cancer, according to the OECD, the Paris- based coalition of 30 industrialized nations” (Wechsler,9/18).
Gray Matters: An ‘un-American’ Medicare recipient
by Saul Friedman email@example.com
I must be un-American, and I may have placed my country in great peril from socialists, communists, fascists and I don’t know who else.
For health care, I participate in a dreaded “public option,” Medicare, and have done so for 15 years. Along with most of 45 million people, we have been dependent on and spoiled by Medicare.
And most of us like it better than private insurance and, at the risk of undermining our youth, they may like Medicare, too. I go to and trust doctors who participate in Medicare, and none has threatened to pull my plug.
Also, I was a beneficiary of “socialist” medical care during my two years in the U.S. Army, where doctors who were paid by Uncle Sam treated me for various ailments. And since then, I’ve gotten some free care from Veterans Affairs, where the doctors, nurses and janitors also work for the government.
In addition, I have participated in a “death panel,” but not one that Medicare paid for. I went to a lawyer, who charged my wife and me a bundle for drawing up a living will, an advance directive and a health care power of attorney giving a loved one permission to have doctors pull my plug, in case I couldn’t.
Because of my irresponsible behavior, I suffered a stroke six years ago. As a result, I cost Medicare, plus my secondary insurance, thousands of dollars in medical and rehabilitation bills, paid in part by taxpayers.
Four years ago, I was foolish enough to have a bout with a nasty cancer, for which Medicare and my secondary insurance paid tens of thousands of dollars more, despite my advanced years.
In contrast to what some members of Congress seem to be saying, Medicare didn’t seem to care how old I was. But it cost the taxpayers another bundle.
The doctors, nurses, radiation and chemo specialists who treated me and arrested my cancer worked for and were paid by a public, not-for-profit hospital. Not exactly the American way, but it worked for me. (This hospital, which may not be patriotic, won’t accept Medicare Advantage policies.)
To be fair, people whom I know as good Americans, like Sen. John McCain (R-Ariz.), Senate Republican Leader Mitch McConnell of Kentucky and Rep. Roy Blunt (R-Mo.), have gone to socialized government hospitals, such as the one in Bethesda, for surgeries.
Presidents have gone to Walter Reed. (I don’t know how much, if anything, they paid. They all have the same insurance President Barack Obama has proposed.)
If lawmakers get swine flu shots this year, they will be government-administered. I don’t know who will pay; mine will be paid for by Medicare. But all of us, lawmakers and ordinary people, Americans and un-Americans and even illegal immigrants, will depend on the government’s Centers for Disease Control to help us deal with this threat.
I also relied on government, namely the GI Bill, to get a college degree, while I was working as a cub reporter. The government didn’t seem to care what I studied. At least one of my philosophy professors was a liberal.
And the GI Bill gave me a VA loan, at ridiculously low interest rates, which must have cost the taxpayers plenty. But it enabled my wife and me to buy our first house in Houston, where the current governor wants the state to secede again from the United States. Would that mean the Bushes would no longer be Americans?
When my wife and I and our daughters went on our early vacations, using the new interstate highway system that that famous un-American Dwight Eisenhower (see the John Birch Society) had proposed, we visited San Antonio’s Alamo, where we learned it had been restored by the Works Progress Administration, which helped the Texas economy, despite the state’s secession in 1861.
But I digress. In addition to those dollars that the government has spent to get me educated, housed and healthy, I’ve spent some time as a reporter hearing that the federal government can’t do anything right, like General Motors, Lehman Brothers, Eastern Air Lines, Pan Am, TWA, Bear Stearns, American Motors, Enron and other icons of private enterprise.
The only things I could think of that the government has done reasonably well were the Manhattan Project, the FDIC, the FDA, Yellowstone and other National Parks, the Lincoln and Jefferson Memorials and the Washington Monument.
Last but not least, for 15 years or so, my wife and I have been paid modest but significant sums each month by Social Security. Many people who are real Americans consider this another example of an un-American, big government, socialist infringement on our freedoms that is bound to fail because it’s a Ponzi scheme.
You could ask Bernie Madoff. He could get Social Security if he weren’t in prison.
RETIREMENT? GOOD LUCK WITH THAT
The destructive effects of the financial crisis may be waning, but your retirement account won’t soon forget. Savers lost 40% or more in the downturn — a collective $2.1 trillion disappeared from 401(k) and IRA assets in 2008 alone — and while the recent stock-market recovery may feel good, it’s done little to stem a mounting crisis in the retirement system in the U.S. So where does this leave our retirement plans? Consult our Retirements in Peril package
National Security Archive Update, September 23, 2009
New Facebook Page Features Archive’s Top Ten Declassified Documents
Washington D.C., September 23, 2009 – The National Security Archive today inaugurated a new Facebook page featuring an album of the “Top Ten” declassified documents obtained through the FOIA over more than two decades. Among the documents is a top-secret strategy paper for fighting al-Qaeda given to the Bush White House on January 25, 2001; a CIA report on using cats with surgically implanted listening devices to spy on Russian embassies; and records from the FBI interrogations of Saddam Hussein.
Become a fan of the National Security Archive on Facebook to keep up with all the key news and happenings in secrecy and open government. While visiting the Archive’s Facebook page, join our discussion about what secret documents you most want to see declassified.
The Archive is also on Twitter! Follow us on Twitter to learn about events and breaking news stories as Archive staff uncover new declassified documents and travel the world promoting open government.
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Financial News for Independent Energy Companies, Second Quarter 2009
Friday, September 25, 2009
Today the Energy Information Administration released its latest report that reviews recent financial performance of independent U.S. energy companies. Data presented are for April through June 2009. Independent energy companies reported an 68-percent decrease in net income relative to the second quarter of 2008, driven by large losses for producers.
This resulted from the sharp fall in oil and natural gas prices, causing billion-dollar write-downs in the value of company reserves. The report uses a new, more visual format. The next update, for July through September, will be released in December 2009. The report can be found onthe EIA Web site at
Frack Fluid Spill in Dimock Contaminates Stream, Killing Fish
By Abrahm Lustgarten
Pennsylvania environment officials are racing to clean up as much as 8,000 gallons of dangerous drilling fluids after a series of spills at a natural gas production site near the town of Dimock late last week. The spills, which occurred at a well site run by Cabot Oil and Gas, involve a compound manufactured by Halliburton that is described as a “potential carcinogen” and is used in the drilling process of hydraulic fracturing, according to state officials. The contaminants have seeped into a nearby creek, where a fish kill was reported by the state Department of Environmental Protection. The DEP also reported fish “swimming erratically”.
Read the full article.
Zurich Film Festival Offers Award to Osama bin Laden
September 27, 2009
Zurich Film Festival Offers Award to Osama bin Laden
In a move that seems guaranteed to stir controversy, the Zurich Film Festival today offered an honorary lifetime achievement award to international terrorist Osama bin Laden.
In a statement released by the film festival, organizers said that they were recognizing Mr. bin Laden for his “body of work,” referring to the chilling terror tapes that the al-Qaeda kingpin has released over the past ten years.
A source close to Mr. bin Laden said that he was “seriously considering” leaving his secret hideaway to accept the award in Zurich.
“What could possible go wrong?” Mr. bin Laden reportedly said.
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three thousand words
Center for American Blogress
Sep 27, 2009
He Reaped What They Sowed
Tom Toles: Is anger-management covered?