carapace – Not your father's america

Why haven’t any Wall Street tycoons been sent to the slammer?

Kevin G. Hall
McClatchy Newspapers
September 20, 2009

WASHINGTON — More than a year into the gravest financial crisis since the Great Depression, millions of Americans have seen their home values and retirement savings plunge and their jobs evaporate.

What they haven’t seen are any Wall Street tycoons forced to swap their multi-million dollar jobs and custom-made suits for dishwashing and prison stripes.

There are plenty of civil and class-action lawsuits from aggrieved investors angered by the losses in their mortgage bonds, hedge funds or pensions. Regulators have stepped up their vigilance after the fact. But to date, no captain of finance tied to the crisis has walked the plank.

There have been some high-profile arrests and federal convictions of financial giants — such as Ponzi scheme king Bernard Madoff and Stanford Financial Group chairman Robert Allen Stanford. They weren’t among the causes of the financial meltdown, however, just poster boys for an era of lax enforcement, weak regulation and devout faith in free markets.

“A lot of people who are responsible (for the crisis) seem to have gotten awfully rich in the process,” said Barbara Roper, the director of investor protection for the Consumer Federation of America.

The absence of what many would call justice stands out all the more because past financial crises always had their villains. The depression-era had electricity and railroad magnate Samuel Insull, who partly inspired the movie “Citizen Kane.” The savings and loan crisis of the 1980′s had banker Charles Keating. Energy giant Enron Corp.’s spectacular collapse offered the late CEO Kenneth Lay, a Texas crony of President George W. Bush.

Yet there’s no such poster child for the Great Recession, as today’s crisis is now called.

One may yet emerge. The FBI has more than 580 large-scale corporate fraud investigations under way. At least 40 of them are scrutinizing players in sub-prime mortgage lending, which was the first domino to fall and triggered a global financial crisis.

“The investigations are very complex; it’s not something that’s going to turn overnight,” said Bill Carter, a spokesman at FBI headquarters. “They are labor intensive. They involve a review of records.”

To date, the closest thing to a prosecution of a major actor in the financial meltdown is a civil fraud case that the Securities and Exchange Commission brought on June 4 against Angelo Mozilo, the perma-tanned CEO of mortgage-lending giant Countrywide.

The SEC, in documents filed in a federal courtroom in central California, accuses Mozilo of “deliberately misleading investors” by misrepresenting the risk that Countrywide posed. The SEC also accused him of insider trading because he sold large shares of company stock and options ahead of what he allegedly knew was a coming collapse of mortgage lending.

Unless the Justice Department brings corresponding criminal charges, however, Mozilo could be hit with penalties and a ruined reputation if convicted — but he wouldn’t see the inside of a jail cell.

Another big trial is imminent, however. On Oct. 13, a Brooklyn jury will begin hearing the federal prosecution of former Bear Stearns investment fund founder Ralph Cioffi and his fund manager Matthew Tannin.

Two of their hedge funds, offered to mega-wealthy investors and heavily weighted with investments in mortgage bonds backed by sub-prime loans to the weakest borrowers, collapsed in June and August of 2007. Their collapse signaled a gathering storm in mortgage finance that culminated in March 2008 with the government-brokered fire sale of their bank to JP Morgan Chase.

Both men were charged on June 19, 2008, with defrauding investors, passing off as safe the investment in mortgage bonds even though they described the market for sub-prime mortgages as “toast” in their own e-mails. Cioffi also faces charges of insider trading.

Lawyers for both men declined comment to McClatchy, but when their clients were arrested they called the pair scapegoats for the broader financial crisis.

Court documents filed in August show attorneys for the two are trying to suppress evidence that the executives’ special trading notebooks have disappeared. The government suspects that Cioffi and Tannin, or someone helping them, made them disappear to cover their tracks.

Cioffi’s attorneys also asked in August that the presiding judge quash the use of evidence that points to their clients’ lavish lifestyle, including mansions and Ferraris. The documents accused federal prosecutors of “improper appeal to class prejudice.” Tannin’s attorneys joined the motion on Sept.15.

Class prejudice against bankers is what many Americans feel, evident in the death threats made against some former or current executives at insurer American International Group and other financial firms earlier this year. Wall Street switchboard operators at some institutions no longer provide addresses to phone callers.

Americans are angry because the suffering on Main Street is a spillover from the excessive risk taking and lavish compensation of executives who invested on behalf of the ultra-wealthy. Investors seeking outsized “alpha” returns turned to Wall Street, both seeking to make a short-term killing even if doing so eventually brought the near collapse of the financial system.

President Barack Obama alluded to this on Sept. 14 in a New York speech to commemorate the anniversary of the collapse of investment bank Lehman Brothers, which sent off a global financial panic.

“We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses,” Obama said, promising new rules. “Those on Wall Street cannot resume taking risks without regard for consequences.”

There are persistent but unconfirmed reports that the FBI and grand juries are looking at the e-mails of executives of failed institutions such as Bear Stearns, which pioneered the process of pooling sub-prime loans for sale to investors, and Lehman Brothers, which was a leader in these toxic products when it collapsed.

Records from AIG, which the Federal Reserve saved from collapse on Sept. 17, 2008, are also thought to be under review. The FBI reportedly is also looking at rating agencies Fitch, Moody’s and Standard & Poor’s to determine if they knowingly gave pools of sub-prime mortgages AAA investment-grade ratings, the best possible, despite evidence to the contrary.

Carter, the FBI spokesman, declined comment on ongoing investigations.

The lack of any prosecution to date doesn’t mean authorities aren’t investigating, added Ian McCaleb, a spokesman for the Department of Justice.

“There are ongoing cases. But from a prosecution standpoint, it takes a significant amount of time to develop these things. Most financial fraud cases are very complex and it could take a while to unravel the specifics of each case,” he said. “I would characterize financial fraud as one of our top priorities.”

Another possibility is that a new politically appointed Financial Crisis Inquiry Commission could turn up something that leads to prosecution. The 10-member panel, created by Congress this month, began probing the origins of the crisis, has subpoena power and could compel testimony. This could, however, lead to conflicts with ongoing legal investigations.

Another reason that there’ve been no arrests of the perpetrators of the financial meltdown is that agencies such as the SEC, which regulates trading in stocks and bonds, and the Commodity Futures Trading Commission, which oversees the trading of contracts for future delivery of energy and farm products, lack powers of criminal prosecution.

They can bring civil charges that result in fines or pass information to federal prosecutors or the FBI, which under the Bush administration was reorganized to focus less on white-collar crime and more on national security matters and crimes against children.

Legislation introduced in the House and Senate would make it easier for the CFTC to prosecute, especially allegations of market manipulation. Measures would lower the current high threshold for determining manipulation. In 35 years, the agency has won only a single manipulation case, and it’s under appeal. The bills also would give commodities regulators powers to bring criminal cases.

“Folks who do the crime shouldn’t just pay a fine, but do the time,” said Bart Chilton, a CFTC commissioner who’s championed the need for prosecutorial powers.

Because it saves time and money, regulators traditionally have negotiated settlements with bad actors, and fines often amount to a business cost.

That, too, may be changing, however. The SEC on Sept. 14 was hit with a stinging judicial rebuke for its half-hearted efforts to punish Bank of America for alleged disclosure failures in the government-brokered purchase of investment bank Merrill Lynch.

U.S. District Judge Jed Rakoff tossed out a $33 million settlement between the SEC and Bank of America, effectively calling it a fig leaf. The agency, he said, looked as if it was enforcing the law while the bank and its CEO, Kenneth Lewis, got away with a slap on the wrist.

“It is not fair, first and foremost, because it does not comport with the most elementary notions of justice and morality, in that it proposes that the shareholders who were the victims of the bank’s alleged misconduct now pay the penalty for that misconduct,” Rakoff wrote in a scathing 12-page opinion that ordered the complaint to proceed to trial.

Complete article at:

www.mcclatchydc.com

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Pittsburgh and G-20 Protests

Monday, September 21, 2009

CHARLES McCOLLESTER, cmccollester@verizon.net, http://www.pointofpittsburgh.com

McCollester, author of “The Point of Pittsburgh: Production and Struggle at the Forks of the Ohio,” just wrote the piece “There are plenty of reasons to protest the G-20: The global economic system has deindustrialized America, despoiled the Earth and marginalized working people everywhere” for the Pittsburgh Post-Gazette.

McCollester writes: “When the announcement was made in Washington that Pittsburgh would be the site of the G-20 summit, reporters laughed. Clearly, the significance of the city in the nation’s history is poorly understood.

“There is something symbolic in the holding of this potentially watershed event in Pittsburgh at a moment when America’s global leadership is being seriously challenged by rising Asian economic superpowers as well as by numerous political revolts in the hemisphere it once dominated. The industrial collapse of Pittsburgh and American manufacturing in the 1980s propelled the crushing trade imbalance and indebtedness of the United States vis-a-vis the rest of the world. In a sense the chickens are coming home to roost.

“The American global agenda in the triumphant capitalist expansion that followed the disintegration of the Soviet empire proved to be disastrous for the American working class, as well as for workers and the environment around the world. Free trade, privatization and deregulation pursued with varying degrees of ardor by both Republicans and Democrats over the past 30 years has concentrated wealth and increased the poverty of the majority of humanity by undermining local, traditional and indigenous economies — all while polluting and degrading the natural world at an extremely dangerous pace. God knows there are reasons enough to protest.

“The United States, the prime purveyor of this toxic cocktail of economic dogmas, has seen its productive capacity collapse, its governmental and individual debt obligations increase exponentially and its once muscular and productive economic engine reduced to an increasingly untenable global military presence. Our best defense is not endless foreign war, but a sustained reinvention of our economic life at home.”

See: www.post-gazette.com

McCollester is a retired professor of industrial and labor relations at Indiana University of Pennsylvania.

From: Institute for Public Accuracy

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What exactly did the Fed do with Two Trillion Dollars ?

Dean Baker
Global Research, September 20, 2009
The Guardian – 2009-09-07

Despite Ben Bernanke’s protestations, Congress must be given full access to audit the Federal Reserve’s loans expenditure

To combat the financial crisis set off by the collapse of the housing bubble, the Federal Reserve Board has lent out more than $2tn through various special lending facilities. While the Fed discloses aggregate information on the loans made through each of the facilities, it will not disclose how much money it lent to specific banks or under what terms. By contrast, the Treasury puts this information about its $700bn TARP bailout up on its website.

Partly in response to this huge increase in the Fed’s power (its secret lending is equal to two-thirds of the federal budget), more than 270 representatives in Congress have co-sponsored a bill that would have the Government Accountability Office audit the Fed. In principle, this audit would examine the Fed’s loans and report back to the relevant congressional committees, which could decide to make this information public.

Most people might consider it perfectly reasonable to have Congress’s auditing arm review what the Fed has done with $2tn of the taxpayers’ money to ensure that everything is proper. After all, we wouldn’t let other government agencies spend one millionth of this amount ($2m) without some sort of record that could be verified.

However, the Fed and its chairman Ben Bernanke, do not see it this way. Bernanke warned Congress last month that such an audit could jeopardise the Fed’s independence, which in turn, “could raise fears about future inflation, leading to higher long-term interest rates and reduced economic and financial stability”.

OK, Bernanke warned Congress that if the Fed had less independence, it could lead to “reduced economic and financial stability.” We have just been through a year in which the Great Depression was a more frequent topic of conversation than the Superbowl, World Series, and Oscars combined. In fact, Bernanke is given credit for preventing another Great Depression. The Congressional Budget Office is now projecting that unemployment will average in the double digits throughout 2010 and it will not be until 2014 that the unemployment rate falls back to its normal level.

Did Bernanke forget about the current state of the economy and the financial collapse that he was frantically trying to head off when he warned Congress that if the Fed were less independent, it could lead to “reduced economic and financial stability”? After all, how do you get less economic and financial stability than the Great Depression?

This is not the first time that Bernanke’s memory appears to have failed him when addressing Congress about an important policy issue. Last September, when he was telling Congress that the economy would collapse if it did not approve the $700bn TARP bailout, he warned that the commercial paper market was shutting down. This was hugely important because most major companies rely on selling commercial paper to meet their payrolls and pay other routine bills. If they could not sell commercial paper, then millions of people would soon be laid off and the economy would collapse.

What Bernanke apparently forgot to tell Congress is that the Fed has the authority to directly buy commercial paper from financial and non-financial companies. In other words, the Fed has the power to prevent the sort of economic collapse that Bernanke warned would happen if Congress did not quickly approve the TARP. In fact, Bernanke announced that the Fed would create a special lending facility to buy commercial paper the weekend after Congress voted to approve the TARP.

Bernanke has taken extraordinary measures in the last year that have been successful in preventing a much worse downturn. Nonetheless, Congress should not forget that it was incredible mismanagement by Bernanke and his predecessor Alan Greenspan that brought about this disaster in the first place. If Bernanke is approved for another term, as seems likely, Congress should not hesitate to use more oversight than it did in past years. And, it certainly should not let the Fed send $2tn out the door without a verifiable paper trail.

Given the track record for Bernanke’s version of bank independence, it is hard to imagine that greater congressional oversight would lead to worse outcomes.

Complete article at:

www.globalresearch.ca

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Leaving Things Out of the Leaving Things Out Critique

September 20, 2009

The Washington Post beats up on a book on globalization by Jon Jeter, a former WAPO reporter. The book is largely critical of the recent course of globalization, the reviewer clearly less so.

In the last paragraph the reviewer takes Jeter to task for praising Chile’s globalization with a human face, without mentioning, among other things, that Chile was the first country to privatize its Social Security system. While this may have been an unfortunate omission, it is worth noting that Chile recently partially reversed this privatization, increasing the guaranteed benefit in the system.

The reform of the privatized system was a central theme in the last presidential campaign (Chile is now a democracy, the privatization took place under a dictatorship), with both major candidates supporting reform, including Sebastian Pinero, the brother of the labor minister who had overseen the initial privatization.

From: Beat the Press Weekly Roundup, 09/21/09 prospect.org

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Sunlight Labs Posts Apps for America Winners

DataMasher: “DataMasher helps citizens have a little fun with those data by creating mashups to visualize them in different ways and see how states compare on important issues. Users can combine different data sets in interesting ways and create their own custom rankings of the states.”

www.datamasher.org

GovPulse: “govpulse was built to open the doors of government to the people they work for. By making such documents as the Federal Register searchable, more accessible and easier to digest, govepulse seeks to encourage every citizen to become more involved in the workings of their government and make their voice heard on the things that matter to them, from the smallest to the largest issues.”
govpulse.us

ThisWeKnow: “Our long-term vision for ThisWeKnow is to model the entire data.gov catalog and make it available to the public using Semantic Web standards as a large-scale online database. ThisWeKnow will provide citizens with a single destination where they can search and browse all the information the government collects. It will also provide other application developers with a powerful standards-based API for accessing the data.”
www.thisweknow.org

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Convergence: The Challenge of Aviation Security

By Scott Stewart
September 16, 2009

On Sept. 13, As-Sahab media released an audio statement purportedly made by Osama bin Laden that was intended to address the American people on the anniversary of the 9/11 attacks. In the message, the voice alleged to be that of bin Laden said the reason for the 9/11 attacks was U.S. support for Israel. He also said that if the American people wanted to free themselves from “fear and intellectual terrorism,” the United States must cut its support for Israel. If the United States continues to support Israel, the voice warned, al Qaeda would continue its war against the United States “on all possible fronts” — a not so subtle threat of additional terrorist attacks.

Elsewhere on Sept. 14, a judge at Woolwich Crown Court in the United Kingdom sentenced four men to lengthy prison sentences for their involvement in the disrupted 2006 plot to destroy multiple aircraft over the Atlantic using liquid explosives. The man authorities claimed was the leader of the cell, Abdulla Ahmed Ali, was sentenced to serve at least 40 years. The cell’s apparent logistics man, Assad Sarwar, was sentenced to at least 36 years. Cell member Tanvir Hussain was given a sentence of at least 32 years and cell member Umar Islam was sentenced to a minimum of 22 years in prison.

The convergence of these two events (along with the recent release of convicted Pan Am 103 bomber Abdel Basset Ali al-Megrahi and the amateurish Sept. 9 hijacking incident in Mexico using a hoax improvised explosive device [IED]) has drawn our focus back to the topic of aviation security — in particular, IED attacks against aircraft. As we weave the strands of these independent events together, they remind us not only that attacks against aircraft are dramatic, generate a lot of publicity and can cause very high body counts (9/11), but also that such attacks can be conducted simply and quite inexpensively with an eye toward avoiding preventative security measures (the 2006 liquid-explosives plot.)

Additionally, while the 9/11 anniversary reminds us that some jihadist groups have demonstrated a fixation on attacking aviation targets — especially those militants influenced by the operational philosophies of Khalid Sheikh Mohammed (KSM) — the convictions in the 2006 plot highlight the fact that the fixation on aviation targets lives on even after the 2003 arrest of KSM.

In response to this persistent threat, aviation security has changed dramatically in the post-9/11 era, and great effort has been undertaken at great expense to make attacks against passenger aircraft more difficult. Airline attacks are harder to conduct now than in the past, and while many militants have shifted their focus onto easier targets like subways or hotels, there are still some jihadists who remain fixated on the aviation target, and we will undoubtedly see more attempts against passenger aircraft in spite of the restrictions on the quantities of liquids that can be taken aboard aircraft and the now mandatory shoe inspections.

Quite simply, militants will seek alternate ways to smuggle components for IEDs aboard aircraft, and this is where another thread comes in — that of the Aug. 28 assassination attempt against Saudi Deputy Interior Minister Prince Mohammed bin Nayef. The tactical innovation employed in this attack highlights the vulnerabilities that still exist in airline security.

Shifts

The airline security paradigm changed on 9/11. In spite of the recent statement by al Qaeda leader Mustafa Abu al-Yazid that al Qaeda retains the ability to conduct 9/11-style attacks, his boast simply does not ring true. After the 9/11 attacks there is no way a captain and crew (or a group of passengers for that matter) are going to relinquish control of an aircraft to hijackers armed with box cutters — or even a handgun or IED. A commercial airliner will never again be commandeered from the cockpit and flown into a building — especially in the United States.

Because of the shift in mindset and improvements in airline security, the militants have been forced to alter their operational framework. In effect they have returned to the pre-9/11 operational concept of taking down an aircraft with an IED rather than utilizing an aircraft as human-guided missile. This return was first demonstrated by the December 2001 attempt by Richard Reid to destroy American Airlines Flight 63 over the Atlantic with a shoe bomb and later by the thwarted 2006 liquid-explosives plot. The operational concept in place now is clearly to destroy rather than commandeer. Both the Reid plot and the 2006 liquid-bomb plot show links back to the operational philosophy evidenced by Operation Bojinka in the mid-1990s, which was a plot to destroy multiple aircraft in flight over the Pacific Ocean.

The return to Bojinka principles is significant because it represents not only an IED attack against an aircraft but also a specific method of attack: a camouflaged, modular IED that the bomber smuggles onto an aircraft in pieces and then assembles once he or she is aboard and well past security. The original Bojinka plot used baby dolls to smuggle the main explosive charge of nitrocellulose aboard the aircraft. Once on the plane, the main charge was primed with an improvised detonator that was concealed inside a carry-on bag and then hooked into a power source and a timer (which was disguised as a wrist watch). The baby-doll device was successfully smuggled past security in a test run in December 1994 and was detonated aboard Philippine Air Flight 434.

The main charge in the baby-doll devices, however, proved insufficient to bring down the aircraft, so the plan was amended to add a supplemental charge of liquid triacetone triperoxide (or TATP, aptly referred to as “Mother of Satan”), which was to be concealed in a bottle of contact lens solution. The plot unraveled when the bombmaker, Abdel Basit (who is frequently referred to by one of his alias names, Ramzi Yousef) accidentally started his apartment on fire while brewing the TATP.

The Twist

The 2006 liquid-bomb plot borrowed the elements of using liquid explosives and disguised individual components and attacking multiple aircraft at the same time from Bojinka. The 2006 plotters sought to smuggle their liquid explosives aboard using drink bottles instead of contact lens solution containers and planned to use different types of initiators. The biggest difference between Bojinka and more recent plots is that the Bojinka operatives were to smuggle the components aboard the aircraft, assemble the IEDs inside the lavatory and then leave the completed devices hidden aboard multi-leg flights while the operatives got off the aircraft at an intermediate stop. The more recent iterations of the jihadist airplane-attack concept, including Richard Reid’s attempted shoe bombing and the 2006 liquid-bomb plot, planned to use suicide bombers to detonate the devices midflight. The successful August 2004 twin aircraft bombings in Russia by Chechen militants also utilized suicide bombers.

The shift to suicide operatives is not only a reaction to increased security but also the result of an evolution in ideology — suicide bombings have become more widely embraced by jihadist militants than they were in the early 1990s. As a result, the jihadist use of suicide bombers has increased dramatically in recent years. The success and glorification of suicide operatives, such as the 9/11 attackers, has been an important factor in this ideological shift.

One of the most recent suicide attacks was the Aug. 28 attempt by al Qaeda in the Arabian Peninsula (AQAP) to assassinate Saudi Prince Mohammed bin Nayef. In that attack, a suicide operative smuggled an assembled IED containing approximately one pound of high explosives from Yemen to Saudi Arabia concealed in his rectum. While in a meeting with Mohammed, the bomber placed a telephone call and the device hidden inside him detonated.

In an environment where militant operational planning has shifted toward concealed IED components, this concept of smuggling components such as explosive mixtures inside of an operative poses a daunting challenge to security personnel — especially if the components are non-metallic. It is one thing to find a quantity of C-4 explosives hidden inside a laptop that is sent through an X-ray machine; it is quite another to find that same piece of C-4 hidden inside someone’s body. Even advanced body-imaging systems like the newer backscatter and millimeter wave systems being used to screen travelers for weapons are not capable of picking up explosives hidden inside a person’s body. Depending on the explosive compounds used and the care taken in handling them, this method of concealment can also present serious challenges to explosive residue detectors and canine explosive detection teams. Of course, this vulnerability has always existed, but it is now highlighted by the new tactical reality. Agencies charged with airline security are going to be forced to address it just as they were previously forced to address shoe bombs and liquid explosives.

Actors

Currently there are three different actors in the jihadist realm. The first is the core al Qaeda group headed by bin Laden and Ayman al-Zawahiri. The core al Qaeda organization has been hit hard over the past several years, and its operational ability has been greatly diminished. It has been several years since the core group has conducted a spectacular terror attack, and it has focused much of its effort on waging the ideological battle as opposed to the physical battle.

The second group of actors in the jihadist realm is the regional al Qaeda franchise groups or allies, such as al Qaeda in the Arabian Peninsula, Jemaah Islamiyah and Lashkar-e-Taiba. These regional jihadist groups have conducted many of the most spectacular terrorist attacks in recent years, such as the November 2008 Mumbai attacks and the July 2009 Jakarta bombings.

The third group of actors is the grassroots jihadist militants, who are essentially do-it-yourself terrorist operatives. Grassroots jihadists have been involved in several plots in recent years, including suicide bomb plots in the United States and Europe.

In terms of terrorist tradecraft such as operational planning and bombmaking, the core al Qaeda operatives are the most advanced, followed by the operatives of the franchise groups. The grassroots operatives are generally far less advanced in terms of their tradecraft. However, any of these three actors are capable of constructing a device to conduct an attack against an airliner. The components required for such a device are incredibly simple — especially so in a suicide attack where no timer or remote detonator is required. The only components required for such a simple device are a main explosive charge, a detonator (improvised or otherwise) and a simple initiator such as a battery in the case of an electric detonator or a match or lighter in the case of a non-electric detonator.

The October 2005 incident in which a University of Oklahoma student was killed by a suicide device he was carrying demonstrates how it is possible for an untrained person to construct a functional IED. However, as we have seen in cases like the July 2005 attempted attacks against the London Underground and the July 2007 attempted attacks against nightclubs in London and the airport in Glasgow, grassroots operatives can also botch things due to a lack of technical bombmaking ability. Nevertheless, the fact remains that constructing IEDs is actually easier than effectively planning an attack and successfully executing it.

Getting a completed device or its components by security and onto the aircraft is a significant challenge, but as we have discussed, it is possible to devise ways to overcome that challenge. This means that the most significant weakness of any suicide-attack plan is the operative assigned to conduct the attack. Even in a plot to attack 10 or 12 aircraft, a group would need to manufacture only about 12 pounds of high explosives — about what is required for a single, small suicide device and far less than is required for a vehicle-borne explosive device. Because of this, the operatives are more of a limiting factor than the explosives themselves, as it is far more difficult to find and train 10 or 12 suicide bombers.

A successful attack requires operatives not only to be dedicated enough to initiate a suicide device without getting cold feet; they must also possess the nerve to calmly proceed through airport security checkpoints without alerting officers that they are up to something sinister. This set of tradecraft skills is referred to as demeanor, and while remaining calm under pressure and behaving normal may sound simple in theory, practicing good demeanor under the extreme pressure of a suicide operation is very difficult. Demeanor has proven to be the Achilles’ heel of several terror plots, and it is not something that militant groups have spent a great deal of time teaching their operatives. Because of this, it is frequently easier to spot demeanor mistakes than it is to find well-hidden explosives.

In the end, it is impossible to keep all contraband off aircraft. Even in prison systems, where there is a far lower volume of people to screen and searches are far more invasive, corrections officials have not been able to prevent contraband from being smuggled into the system. Narcotics, cell phones and weapons do make their way through prison screening points. Like the prison example, efforts to smuggle contraband aboard aircraft can be aided by placing people inside the airline or airport staff or via bribery. These techniques are frequently used to smuggle narcotics on board aircraft.

Obviously, efforts to improve technical methods to locate IED components must not be abandoned, but the existing vulnerabilities in airport screening systems demonstrate that emphasis also needs to be placed on finding the bomber and not merely on finding the bomb. Finding the bomber will require placing a greater reliance on other methods such as checking names, conducting interviews and assigning trained security officers to watch for abnormal behavior and suspicious demeanor. It also means that the often overlooked human elements of airport security, including situational awareness, observation and intuition, need to be emphasized now more than ever.

If you repost this article on a website, include a link to www.STRATFOR.com

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BILL MOYERS: CONSERVATIVE RADICALS AND THE POLITICS OF VENGEANCE

By Bill Moyers, Bill Moyers Journal

Intellectual conservatism is dead. And the angriest, most intellectually bankrupt elements have taken over the
movement.

Complete article at:

www.alternet.org

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Futuring: The Exploration of the Future ~ Edward Cornish

Futuring is an authoritative introduction to scientific thinking about the future. Written in a clear, readable style, Futuring explains what we can know about the future and what we can’t, some of the techniques used by futurists, and the role that forward-looking people can play in creating a better tomorrow.

Cornish describes specific methods for anticipating future events so that readers can prepare to seize emerging opportunities and address growing challenges before they become unmanageable. Futuring can help readers make better decisions, develop worthwhile goals, and find the means to achieve them. Futuring is a powerful tool for achieving a better future.

Futuring also explains how serious thinking about the future has changed through the years, including the development of the idea of progress in the 17th century, the disillusionment with progress in the 20th century, and recent developments in thinking both creatively and practically about the future. Readers will learn how farsighted business trend watchers, military planners, and think-tank scholars now have a growing number of ways to think scientifically about the future so that leaders in government and business can prepare for opportunities and risks ahead. Cornish explains how these new methods are being used and how you too can use many of these methods in simplified but useful forms.

“The goal of futuring is not to predict the future but to improve it. We want to anticipate possible or likely future conditions so that we can prepare for them. We especially want to know about opportunities and risks that we should be ready for.” — Edward Cornish

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Borowitz Report – Finally, some really good news!

September 21, 2009

Criticism of Obama ‘Not About Race,’ Says New Poll of White People
Foreign Birth, Resemblance to Hitler Cited

People who criticize President Obama do so for reasons that have “nothing to do with his race,” a new poll of white people indicates.

According to the poll, which was conducted by the University of Minnesota’s Opinion Research Institute, those who take issue with the President do so because of his “questionable birth certificate,” his “love of socialism,” and his “Hitler-like health plan,” but “not because of race.”

A significant number of Mr. Obama’s critics “strongly agree” with the statement, “I don’t have any problems with Obama being black, but I do have a problem with him being a socialist from Kenya who is trying to kill my grandmother.”

Professor Davis Logsdon, who conducted the survey, says that the poll is “full of good news” for Mr. Obama: “It indicates that race is no longer an issue in America, but a foreign-born president trying to institute a Nazi-slash-socialist euthanasia plan is.”

Elsewhere, Fox News host Glenn Beck called for stricter limits on the nation’s IQ.

Upcoming Events

October 24, 2009 at 11:30AM

St. Petersburg!
Andy performs at the St. Petersburg Times Festival of Reading and signs copies of his new book, Who Moved My Soap? The CEO’s Guide to Surviving in Prison: Bernie Madoff Edition.

Location:
140 Seventh Avenue South – at Bayboro Harbor
For tickets go to St. Petersburg Times Festival of Reading
www.festivalofreading.com

http://www.borowitzreport.com/

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three thousand words

(click here to view)

Monte Wolverton Cagle Cartoons, Inc. Sep 21, 2009 EditorialCartoonists.com

Matt Davies: Preventive Pruning
(davies.lohudblogs.com)

Chan Lowe: ACORN unmasked
(blogs.trb.com/news)

Shadow Government Statistics – Two weeks ending Sep. 18

Friday, September 18, 2009

Over the past two weeks, John Williams has published several “Flash Updates” and a new, special report on Consumer Liquidity.

The full text of all of these are available only to paid SGS Newsletter subscribers, but below we compile the “bullet points” from them all, in the hope that it will give you an idea of our overall views on developing economic reporting.

Also, over the past two weeks, we have updated three of our Alternate SGS data series:

Money Supply, Inflation and the US Dollar

These can all be viewed in chart form on the followingurl:

www.shadowstats.com

Flash Update September 16th, 2009
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• U.S. Recession Is Not Over
• With Clunker Rebates in New Car Prices, Monthly CPI Gained 0.7% Instead of 0.4%
• CPI-U Annual Inflation -1.5% (SGS +6.0%)
• Industrial Production Boosted by Clunkers and Weather

Flash Update September 15th, 2009
———————————-

• 2.7% Retail Sales Jump Reflected Inflation and One-Time Clunker Spikes
• “Core” Retail Sales Up 2.0% (0.2% Net of Clunkers)
• Wholesale Inflation Soared with Oil

Consumer Liquidity – Special Report September 14th, 2009
———————————————————

• Real Median Household Income in 2008 Fell Below 1973 Level
• Income Dispersion Intensified in 2008
• Restricted Income and Credit Expansion Inhibit Economic Growth
• Economic Crisis Is Far from Over

Flash Update September 12th, 2009
————————————

• Annual Broad Money Growth Slowed Sharply in August
• Fed’s Beige Book Generally Indicated Severe Bottom Bouncing
• Irregular Cash-for-Clunkers Impact in Pending Economic and Inflation Numbers

Flash Update September 10th, 2009
————————————

• Widening July Trade Deficit Played Some Catch-Up
• Structural Limitations: Consumer Unable to Support or
Sustain Economic Growth

http:/www.shadowstats.com

Kind regards,
The ShadowStats Team

==========

Who Really Crashed the Economy?

September 19, 2009
By David Korten

And why do we keep blaming the wrong people?

Mobs disrupt town meetings. Glenn Beck amplifies a careless remark by a mid-level White House staff member into a threat of a national communist takeover. The right wing spin machine creates a parent revolt over a presidential pep talk to students urging them to study hard and stay in school. Meanwhile, the Party of No blocks action on health care and climate disruption with lies and distortions and declares President Obama’s stimulus package a socialist plot and a failed waste of taxpayer money.

There is a common thread. Each of these media events has diverted attention from Wall Street’s responsibility for crashing the economy, taking trillions of dollars in public bailout money, and then rewarding itself with outlandish bonuses.

The Wall Street corporations funding the front organizations that orchestrate these and other diversions hope we will forget that America’s number one problem is Wall Street—and the overpaid Wall Street casino gamblers who destroyed our economy in a reckless test of the theory that markets can self-regulate and that the unrestrained pursuit of individual greed is beneficial to society.

Wall Street’s greatest fear is that the public might demand Congress and the president shut down the casino. Any issue that shifts attention away from Wall Street and pins the blame for job loss and mortgage foreclosures on President Obama works in its favor.

The right wing media campaign would have us believe that President Obama, not Wall Street, is the nation’s #1 problem. He’s a socialist. He’s an irresponsible spender. He isn’t really patriotic (remember, he didn’t wear a flag pin). America’s lost jobs and the mortgage foreclosures are his doing. Never mind that he was still living in Chicago working as a civil rights lawyer and then an Illinois state senator while Wall Street was putting together the high-risk financial instruments that ultimately brought down the economy.

Every controversy that gains media attention, including such peripheral issues as President Obama’s talk to students and a green jobs advisor who once signed a controversial petition, helps to push Wall Street off the front page and distract the White House, congress, and the public from the real issue.

Van Jones accepts the 2009 Hubert Humphrey Award for “selfless and devoted service in the cause of equality.”

Photo courtesy of the Leadership Conference on Civil Rights
Because Van Jones, the green jobs advisor who was the object of a withering smear campaign funded by the corporate right, is a valued friend and colleague, I followed the outlandish attack on him with far greater attention than I normally give to the right wing noise machine. I watched in amazement as it elevated him from being a mid-level White House advisor to being one of the most powerful and dangerous players in Washington, the leader of a socialist plot to take over America. Van was a perfect surrogate for Obama, because he is a charismatic black man with a gift for oratory similar to Obama’s—and is an outspoken advocate of social justice and environmental responsibility.

Van’s message is one that I should think any loyal, caring, thoughtful American would celebrate. Yet I watched as Glenn Beck in full red-faced bluster translated a video clip of Van Jones calling on his audience to be more caring in our relationships with one another into a subversive plot to turn America into a socialist state. I was aghast. Would Beck have condemned Jesus as a socialist and cheered those who led him off to his crucifixion?

Much of my academic training is in psychology. As a student, I was fascinated by studies of the psychological dynamics that allowed Hitler to take control of Germany and more generally lead people to enthusiastically support racist, fear-mongering, authoritarian demagogues. There is a general pattern. Successful demagogues provide a message of certainty in uncertain times that turns fear and self-doubt into a sense of purpose, power, and self-worth for people called to join an army of the righteous to rid the world of some real or imagined evil.

Another of my African-American colleagues, Harry Pickens, recently shared with me his compelling assessment of how this dynamic is playing out currently in America.

He notes that most Americans, until quite recently, grew up within a culture that assigned each of us our place in a social hierarchy that placed men over women, whites over people of color, rich people over poor people, and humans over nature. Knowing one’s place offered a certain sense of stability and security even for those on the bottom.

Unless one has a secure sense of identity independent of these categories, the breakdown of the hierarchy can introduce extreme uncertainty that is both confusing and threatening, even in times of economic prosperity. The civil rights, women’s, and environmental movements all challenged the hierarchy and threatened the established system of authority and identity.

Then came the ultimate shock—a black president whose intelligence, poise, talent, and charisma set him apart even from most of America’s former presidents. With him came the strong, intelligent, beautiful, and charming Michelle, who has the potential, like Hillary Clinton, to be a future presidential candidate in her own right. Horror of horrors. The only thing that might present a greater threat to the old social order than a black male president from a modest class background is the specter of a black female president. For some it has been a shock too great to bear.

That is the backdrop of the withering smear attack on Van, a refreshingly honest and mature voice filled with wisdom and insight into the possibility of America as a strong, caring, environmentally responsible, multiracial nation. Those of us on the progressive side who have transcended our old identities and are psychologically ready to hear and celebrate his message are, in fact, thrilled that the message comes from a black man who is speaking on behalf of all people of every gender, race, and class.

It is sometimes difficult for progressives to understand just how inherently threatening our message can be to those whose sense of identity depends on clinging to their position in the collapsing hierarchy of power and privilege. Even if we call only for a world of love for all people and all beings, skilled propaganda masters of the right easily take our words and spin them in a way that make them feel threatening to their followers. Of course Van’s language is not so restrictive, and appropriately so. His honesty without malice or blame is why we love him and look to him as a leader.

We on the progressive side best respond by being strong and centered in the artful manner of Joanna Macy’s Shambhala warrior, deflecting the thrusts of the forces of hateful violence in ways that disarm them without responding in kind.

I believe the culture is shifting at a deeper level. Ever more people are awakening to the possibilities of a world beyond the old social ordering, a world that truly fulfills the American ideal of liberty and justice for all, and they are redefining their personal identities accordingly. The shift is only partially visible, however, because those who navigate it are less inclined to respond in kind to the voices of fear and hate and thus get less media attention.

I believe the shift is destined to accelerate, because the brains of all but the most severely psychologically damaged humans are hard-wired to care and connect. Many of those who go along with the culture of hate and fear do so simply because it is their only experience. We best reach them by demonstrating the possibilities of a different way of being and relating.

All the while, we need to maintain a clear focus on Wall Street as the primary source of the economic, social, political, and environmental crises that threaten our long-term security and viability as a nation. To resolve the crises, we must strip Wall Street of its power and bring forth a New Economy designed to serve the needs of people and nature rather than simply profits. Among other things, this requires legislative action to break up the big Wall Street financial institutions, strictly limit financial speculation, and bar corporations from usurping the political rights of persons. We cannot allow Wall Street to succeed in its effort to put the blame on President Obama and divert our attention to a continuing series of diversionary issues.

Author’s Bio: David Korten is co-founder and board chair of the Positive Futures Network. This article draws from his newly released book, The Great Turning: From Empire to Earth Community

Go to www.yesmagazine.org for book excerpts, related articles, David’s talks, and resources for action.

Complete article at:

www.opednews.com

==========

Better Regulate Than Never

The plea for financial calm.

Eliot Spitzer
September 15, 2009

The national ideological tilt has shifted fast, away from libertarianism and toward broad support for interventions like the new federal “pay czar,” who will oversee banker compensation for bailout recipients. Such a sudden and dramatic reversal suggests that ideology has not been moored to steady principles. Instead, we have grasped too quickly at ephemeral data points and permitted our worldview to be shaped by panic. In this haze of hyperbole, we have an obligation to discern the more modulated truth. Indeed, if we now quickly move from lax regulatory enforcement to heavy-handed bureaucratization of our economy, we will be just as lost a decade from now as we are today.

To understand the shape of our response to the crisis, we must understand the crisis itself. We have experienced a failure of capitalism–not the failure of capitalism. We know markets are still the best way to allocate resources and to set prices and wages. But the first and essential corollary to any theory of markets should hold that they are fragile and must be protected. No matter how frequently large swaths of the world loudly shout, “We love the market!,” virtually nobody does. In the absence of rigorous enforcement of rules, market players seek monopoly power and unfair advantages; they take risks at the undisclosed expense of others, or violate fiduciary duty. None of this means these actors are “evil” or “immoral.” But their actions demonstrate that self-interest, unbridled by enforcement of rules, will destroy the very market so many people so ostentatiously claim to adore.

So, we can now dispose of that old canard that self-regulation preserves the integrity of markets. There is essentially no evidence that any self-regulatory entity–from the Securities Industry Association to the New York Stock Exchange–ever revealed or resolved a single structural flaw in the market place. Rather, they papered over and rationalized away all the bad behavior they witnessed.

But there was supposed to be another group designed and empowered to root out malfeasance and protect the commonweal: a large cadre of government regulators. There’s a widespread assumption that these regulators were improperly armed to adequately protect the public, without sufficient statutory firepower or resources. That, of course, is supposedly being corrected in a wave of reform. Since the crisis broke, we have been treated to a vast array of proposals that remake government organization charts and create agencies with new names. This renovation, however, doesn’t begin to solve our regulatory problems.

The truth is that multiple existing agencies already have, as part of their core responsibility and legal authority, the obligation to protect consumers and oversee financial markets. Take the Fed’s failure in addressing the issue of excessive leverage, which posed a “systemic risk”; or the Securities and Exchange Commission’s inaction while blatant abuses stared it in the face. The regulatory failures of the past decade were in large part failures of will and ideology, not power.

Our market has been–and will continue to be–undermined by regulators who are intellectually or ideologically unwilling to confront powerful market players. Too many of our regulators have been tarnished by the culture of Washington, where the constant movement between government and the private sector has created a fear of disrupting the status quo. It is an environment where stringent enforcement–the very type we needed–jeopardizes future confirmations, alienates potential clients, and engenders social ire. This cozy world isn’t exactly corrupt. Rather, it perpetuates an insidious process of socializing the regulators and the regulated alike. Everyone emerges accepting a way of doing business that ultimately fails the public and the economy. Groupthink has prevailed, leading to an ideological conformity that forecloses challenges and alternative theories.

Effective regulation requires a more intellectually nimble regulator–a regulator that won’t be duped by all the cosmetic changes offered by firms. After all, trading vehicles will be renamed, leveraged assets will look slightly different, but the underlying issues that jeopardize the economy will remain the same: excess debt, leverage, and lack of integrity.

The answer is only partly to place constraints on the ability of people to rotate back and forth between the public and private sectors–to jam up the “revolving door.” The deeper answer requires asking the tough question of regulators: So what did you do about it? This is a question that must be asked by Congress. And there are similarly tough questions that must be asked of everyone hired at these agencies in the future–questions that help identify contrarians and independent minds. This is a metric that is tougher to measure than the quality of a law school attended or the rank one attained in a corporation, but it is vastly more important.

As we emerge from the crisis, there will be a temptation to over-learn lessons. The old system socialized risk and privatized gain. In our rush to reverse the damages wrought by this imbalance, there are many proposals (some of them already implemented) that bureaucratize decision-making and sharply limit private gain. There’s the application of Sarbanes-Oxley to venture-capital firms, which has been neither effective nor useful, and has perhaps inhibited capital flows. And we have already added a federal “pay czar” to determine compensation for bailed-out bankers.

But, once again, we’re missing the opportunity. Instead of adding bureaucracy, we should be using the government to help invigorate shareholders to police companies. They should be empowered to control executive compensation, eliminating all the conflicts that now encumber those decisions.

Shareholders, like all stakeholders, will make a better determination about the use of their capital than bureaucrats who don’t ever suffer the downside of a bad investment. We need to facilitate opportunities for shareholders to actually participate in key decisions, and to deny those whose interests are not aligned from hijacking them. Strangely, we’ve heard a lot about executives and bureaucrats in this moment of reform. But shareholders, a force integral to the integrity and vitality of markets, have largely been left out of the discussion. We need them now more than ever.

Eliot Spitzer is the former governor of New York.

Complete article at:

www.tnr.com

==========

GOING WHERE THE JOBS ARE

Americans have been casting a wider geographic net when looking for work in today’s tough job market, and even as a recovery materializes, more of them might consider moving for a paycheck. But don’t move with the herd: Before
deciding to relocate, career counselors advise workers to make sure they fully understand the local economy they’re going to — and what they’d do if the new job doesn’t work out as planned

Learn more about what to consider before moving

www.marketwatch.com

==========

U.S. Missile Shield Plans: Retreat Or Advance?

By Rick Rozoff
Global Research, September 18, 2009
Stop NATO

On September 17 the White House and the Pentagon, Barack Obama and Robert Gates, announced that after a sixty-day review of the project, the U.S. is going to abandon plans to station ten ground-based interceptor missiles in Poland and a forward-based X-band missile radar installation in the Czech Republic.

The deployments were negotiated with both prospective host countries by the preceding George W. Bush administration under the guise of protecting the United States from alleged long-range missile attacks by what were described as rogue states: Iran and North Korea.

Interceptor missiles in Poland would only be of use in protecting the U.S. if Iran possessed intercontinental ballistic missiles capable of being fired over the Arctic Ocean. No serious person has ever suggested Iran has such a capability or ever will.

But Russian ambassador to NATO Dmitry Rogozin remarked last November that U.S. missiles in Poland could hit his nation’s capital of Moscow in four minutes, as NATO warplanes that have patrolled the skies over the Baltic Sea since 2004 could reach Russia’s second largest city, St. Petersburg, in five minutes.

Leading Russian officials, political and military, have unanimously accused Washington of targeting their own nation and its strategic forces rather than Iran with its third position missile shield plans.

Surveys have consistently demonstrated that a majority of Poles oppose the stationing of American missiles and the troops that would accompany them in their nation. Polls in the Czech Republic show over two-thirds opposition to the basing of interceptor missile radar in that country.

Much of the world, then, was relieved to read the news that the U.S. was reversing course and renouncing designs to base missile shield facilities in Eastern Europe.

What Washington has stated, though, is not so straightforward.

President Obama’s statement began with “President Bush was right that Iran’s ballistic missile program poses a significant threat. And that’s why I’m committed to deploying strong missile defense systems which are adaptable to the threats of the 21st century.”

The second sentence confirms the position on so-called missile defense that his administration has repeatedly and unswervingly voiced since coming to power in January: A global interceptor missile system will be deployed when and exactly where it is proven to be most capable of achieving its purpose and in the most cost-effective manner. In American vernacular, the White House and the Pentagon want more bang for the buck.

The underlying motive for a universal interceptor missile system – based on land, at sea, in the air and in space – is to secure uncontested American international military superiority by making itself and key allies impenetrable to retaliation by nations like Russia and China.

Obama also said, “I have approved the unanimous recommendations of my Secretary of Defense and my Joint Chiefs of Staff to strengthen America’s defenses against ballistic missile attack. This new approach will provide capabilities sooner, build on proven systems, and offer greater defenses against the threat of missile attack than the 2007 European missile defense program.”

There is nothing equivocal about that pledge. Obama is promising a missile shield system not only more effective but more ambitious than the one he has rejected.

The major drawback of ground-based missiles in Poland is that they would be fixed-site deployments. For several years now Russia has warned that it was prepared to base Iskander theater ballistic missiles in its Kaliningrad region, which borders Poland, should Washington deploy its missiles to that nation.

Obama and his defense secretary Robert Gates have suggested a more mobile, less detectable system that cannot be as easily monitored and if need be neutralized.

The American president boasted that “we have made specific and proven advances in our missile defense technology, particularly with regard to land- and sea-based interceptors and the sensors that support them. Our new approach will, therefore, deploy technologies that are proven [and] do so sooner than the previous program.” That is, he proposed an alternative that in no manner indicates a retreat from his predecessor’s plan.

Perhaps quite the contrary, as he announced a “new missile defense architecture in Europe [that] will provide stronger, smarter, and swifter defenses of American forces and America’s allies. It is more comprehensive than the previous program; it deploys capabilities that are proven and cost-effective; and it sustains and builds upon our commitment to protect the U.S. homeland against long-range ballistic missile threats; and it ensures and enhances the protection of all our NATO allies.”

The last eleven words are key to understanding why the U.S. is preparing to abandon bilateral arrangements with Poland and the Czech Republic. The shift in policy is one of emphasis and not essence and portends the expansion and not the constriction of missile deployment plans in Europe.

The following words of Obama’s clarify the situation yet further:

“This approach is also consistent with NATO missile – NATO’s missile defense efforts and provides opportunities for enhanced international collaboration going forward. We will continue to work cooperatively with our close friends and allies, the Czech Republic and Poland….Together we are committed to a broad range of cooperative efforts to strengthen our collective defense, and we are bound by the solemn commitment of NATO’s Article V that an attack on one is an attack on all.”

To invoke NATO’s Article 5 is to speak of war. The North Atlantic Treaty founding document of 1949 describes it as follows:

“The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all and consequently they agree that, if such an armed attack occurs, each of them, in exercise of the right of individual or collective self-defence recognised by Article 51 of the Charter of the United Nations, will assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area.”

The reference to United Nations Article 51 was a Cold War concession to the norms of international law, one which NATO cast off in 1999 with its war against Yugoslavia.

Article 5 was first employed after September 11, 2001 and used for the invasion of Afghanistan and military operations throughout the Mediterranean Sea and the Horn of Africa, all of which continue to this day, eight years later, and in the first and third cases have been escalated dramatically over the past year.

For the last two years leading American elected officials have clamored for the application of Article 5 in defense of Estonia against alleged cyber attacks and even non-NATO members like Georgia and Israel. With Georgia, the calls were made during and after the five-day war with Russia it provoked in August of 2008.

Estonia and Georgia cannot even pretend to be threatened by Iran much less North Korea and Syria, so Obama’s mention of NATO’s Article 5 pertains to another nation. Russia.

A major Russian news site responded to the news of September 17 with this observation:

“As expected, when President Obama spoke to the press on Thursday evening Moscow time, he did not speak about shelving or abandoning anything, but adopting a ‘new missile defense program,’ based on ‘proven and cost effective technology’ that will ‘better counter the current threat.’ It was, he said, ‘more extensive’ than the previous program involving the Czech Republic and Poland.” [1]

The same source quoted an analyst at the London-based International Institute for Strategic Studies, Oksana Antonenko, as saying the former plans for the Czech Republic and Poland “wouldn’t cover the whole territory of Europe, and even from the American point of view the location was not ideal.” Instead, deployments would be focused closer to Iran: “Israel, or possibly Turkey…these are areas where missile systems with existing capabilities would make more sense.” [2]

Previous articles in this series have examined Washington’s plans to extend its global interceptor missile system into Israel, Turkey and the Balkans. [3]

And the South Caucasus. Another Russian news site quoted Dmitry Polikanov, an analyst at Russia’s Center for Political Studies: “I assume that if further statements by the US administration are made – like the movement of sea-based systems closer to Iranian territory, or like the statement that was made about the possible deployment of a missile defense system in the Caucasus – this of course can cause some concerns for Moscow.” [4]

Obama’s Pentagon chief Robert Gates, inherited from the Bush administration, stated on September 17 that “Those who say we are scrapping missile defense in Europe are either misinformed or misrepresenting the reality of what we are doing.”

Gates asserted that the new system “provides a better missile defense capability…than the program I recommended almost three years ago.” [5]

The Defense Secretary, then, has not indicated a change of course but rather a more sophisticated version of his previous plans.

He further stated that “We have now the opportunity to deploy new sensors and interceptors in northern and southern Europe that near term can provide missile defense coverage against more immediate threats from Iran or others.”

Or others.

He specified the deployment of Aegis class warships equipped with SM-3 [Standard Missile-3] interceptors which “provide the flexibility to move interceptors from one region to another if needed.” [6]

The U.S. currently has fifteen destroyers and three cruisers equipped with the Aegis combat system and has incorporated Norway, Spain, Australia, Japan and South Korea into what is developing as a worldwide, sea-based, rapid deployable missile shield structure. The USS Lake Erie, an Aegis class guided-missile cruiser, shot down an American satellite in space in February of 2008 with an SM-3 missile in what some in Russia saw as the opening salvo in American plans for war in space.

Gates further laid out his plans for the next generation Star Wars system in stating, “The second phase, about 2015, will involve fielded, upgraded, land-based SM-3s.”

Lest anyone believe that Washington’s new plans are an abandonment rather than a refinement of previous ones with Poland and the Czech Republic, Gates was obliging enough to reveal that the Pentagon has already opened negotiations with the two nations “about hosting a land-based version of the SM-3 and other components of the system.” [7]

Nothing has been said about reversing U.S. designs to deploy 96 Patriot Advanced Capability-3 (PAC-3) missiles in Poland, ones “accurate enough to select, target, and home in on the warhead portion of an inbound ballistic missile.” [8]

In fact all indications are that more PAC-3s are headed to Europe to be integrated into a multi-layered NATO missile shield grid to cover the entire continent.

On the same day that Obama and Gates made their pronouncements, NATO Secretary General Anders Fogh Rasmussen said, “It is my clear impression that the American plans on missile defense will involve NATO as such to a higher degree in the future concerning the establishment of missile defense. I highly appreciate that. I think it is in full accordance with the principle of solidarity within the alliance and the indivisibility of security in Europe.” Rasmussen gave particular attention to “our eastern allies within the NATO alliance.” [9]

Czech Foreign Minister Jan Kohout said that although the U.S. will not locate the X-band missile radar in his country that it originally intended to, “the Czech Republic will be able to join the new system that the USA wants to create within NATO,” a new system that is “to be more flexible, more efficient and cheaper” and “is to protect the whole of Europe.” [10]

As to what aspects the new system could include, former chief of the Russian General Staff Leonid Ivanov was cited as speculating “the U.S. could use military satellites and aircraft carrying laser weapons instead of the radar and interceptor missile base.” [11]

Previous articles in this series have dealt with the Pentagon’s Airborne Laser (ABL) missile interception program as well as all other facets of global and spaced-based missile shield components [12]. In August the Pentagon’s Missile Defense Agency announced that it had successfully deployed a modified Boeing 747-400F prototype airplane with laser weapons and that it “found, tracked, engaged and simulated an intercept with a missile seconds after liftoff. It was the first time the Agency used an ‘instrumented’ missile to confirm the laser works as expected. Next up this fall will be the first live attempt to bring down a ballistic missile….” [13]

Shortly after the test described above, the Wall Street Journal applauded it in these terms:

“Along with space-based weapons, the Airborne Laser is the next defense frontier. The modified Boeing 747 is supposed to send an intense beam of light over hundreds of miles to destroy missiles in the ‘boost phase,’ before they can release decoys and at a point in their trajectory when they would fall back down on enemy territory….The laser complements the sea- and ground-based missile defenses that keep proving themselves in tests.

“Never has Ronald Reagan’s dream of layered missile defenses – Star Wars, for short – been as…close, at least technologically, to becoming realized.” [14]

The Missile Defense Agency conducted a Space and Missile Defense Conference from August 17-20 of this year and during the proceedings the Boeing Company’s vice president and general manager for missile defense Greg Hyslop presented a design for a “47,500-pound interceptor that could be flown to NATO bases as needed on Boeing-built C-17 cargo planes, erected quickly on a 60-foot trailer stand and taken home when judged safe to do so.” One that would be “globally deployable within 24 hours….” [15]

A nearly 50,000-pound mobile interceptor missile launcher deployable within hours, along with laser weapons and SM-3s, would fit in nicely with plans for a joint U.S.-NATO layered missile shield to take in the entire European continent except for Russia, Belarus and Ukraine. Though former director of the Missile Defense Agency Lieutenant General Henry Obering also mentioned Ukraine for inclusion in the system during his tenure at the agency.

When U.S. President Barack Obama, NATO Secretary General Anders Fogh Rasmussen and Czech Foreign Minister Jan Kohout – seemingly in unison and at practically the same time – spoke of enhanced missile shield cooperation between Washington and Brussels, the foundation of what such a system would entail is indicated by the Medium Extended Air Defense System (MEADS).

MEADS is a joint U.S.-German-Italian-NATO theater interceptor missile program to upgrade current Patriot and Nike Hercules systems in Europe under NATO command and “will provide capabilities beyond any other fielded or planned air and missile defense system. It will be easily deployed to a theater of operation.” [16] It includes forward-based X-band radar, 360 degree surveillance radar, missile launchers and next-generation Patriot interceptor missiles.

“MEADS is interoperable with other defense systems….It can work in association with other missile defense systems, including the Terminal High Altitude Area Defense (THAAD) system and the Aegis sea-based missile defense systems….MEADS…may be able to make a material contribution the Active Layered Theater Ballistic Missile Defense system that NATO planners are currently designing.” [17]

Foreshadowing the news of September 17, last month the White House requested almost $600 million in funding for MEADS for next year and “Congress is on track to support the Administration’s request.” [18]

The Times of London responded to the news about Poland and the Czech Republic with a feature detailing the advancement of the Star Wars program since Ronald Reagan first announced it in 1983. It mentioned, inter alia, Aegis class warships “fitted with Standard [SM-3] missiles that are capable of intercepting enemy rockets, just like the systems based at Fort Greely in Alaska and at Vandenberg airbase in California” and “an airborne laser…that can destroy ballistic missiles by heating them until they fail structurally,” and situated these 21st Century innovations within a broader perspective:

“[T]he Americans have been installing [worldwide missile-tracking radar facilities] in locations around the globe: notably, upgrading the radar early-warning site at RAF Fylingdales in North Yorkshire and deploying X-band radar in Japan and Israel.” [19]

To which should be added the U.S. missile-tracking base in Vardo, Norway, forty miles from the Russian border, and a comparable facility at the Thule Air Base in Greenland.

The news about the cancellation of plans for deploying a missile radar base in the Czech Republic was hailed by the No To Bases organization, the Communist Party of Bohemia and Moravia (KSCM) and the Czech Social Democratic Party (CSSD), all opponents of the project.

But the Czech Social Democrats, who currently have 32% support in the polls and are poised to win next year’s federal elections, differ from other radar opponents in that they have no objection to missile shield components in their country per se but instead are in favor of bringing the Czech Republic into a continent-wide NATO system rather than into a bilateral U.S.-Czech one.

Obama’s and Gates’ statements should satisfy that preference, one which prefigures a wider and permanent interceptor missile system that takes in most all of Europe and North America. If that scenario continues to materialize the relief and enthusiasm that greeted September 17th’s news in many parts of the world may prove to be short-lived.

Notes

1) Russian Information Agency Novosti, September 17, 2009
2) Ibid
3) U.S. Expands Global Missile Shield Into Middle East, Balkans
Stop NATO, September 11, 2009

http://rickrozoff.wordpress.com/2009/09/11/u-s-expands-global-missile-shield-into-middle-east-balkans/

Balkans Revisited: U.S., NATO Expand Military Role In Southeastern Europe
Stop NATO, September 14, 2009

http://rickrozoff.wordpress.com/2009/09/14/266/

4) Russia Today, September 17, 2009
5) New York Times, September 17, 2009
6) Russia Today, September 17, 2009
7) Ibid
Wikipedia
9) Reuters, September 17, 2009
10) Czech News Agency, September 17, 2009
11) Russian Information Agency Novosti, September 17, 2009
12) Pentagon Intensifies Plans For Global Military Supremacy: U.S., NATO Could
Deploy Mobile Missiles Launchers To Europe
Stop NATO, August 22, 2009

http://rickrozoff.wordpress.com/2009/09/02/pentagon-intensifies-plans-for-global-military-supremacy-u-s-nato-could-deploy-mobile-missiles-launchers-to-europe/

U.S. Accelerates First Strike Global Missile Shield System
Stop NATO, August 19, 2009

http://rickrozoff.wordpress.com/2009/09/02/u-s-accelerates-first-strike-global-missile-shield-system/

Militarization Of Space: Threat Of Nuclear War On Earth
Stop NATO, June 18, 2009

http://rickrozoff.wordpress.com/2009/08/31/militarization-of-space-threat-of-nuclear-war-on-earth

21st Century Star Wars And NATO’s 60th Anniversary
Stop NATO, January 15, 2009
13) Wall Street Journal, August 14, 2009
14) Wall Street Journal, August 14, 2009
15) Reuters, August 20, 2009
16) Wikipedia
17) Heritage Foundation, August 17, 2009
18) Ibid
19) The Times, September 17, 2009

Complete article at:

www.globalresearch.ca

==========

Border Waste Reruns

Volume XIV No. 38: September 18, 2009

Jimmy Buffet could have testified at this week’s hearing about ongoing federal border protection initiatives. As you watched the same old song and dance about Department of Homeland Security (DHS) spending commence before lawmakers, you could almost hear him sing: “Wasting away again on the border wall. Searching for the lost section of fence. Some people say that Boeing’s to blame, but I know – it’s our own damn fault.”

With the benefit of updated numbers and dates, the House Homeland Security Committee learned that seven years and more than $4 billion in, DHS’s Secure Border Initiative (SBI) is (still) broken. SBI is comprised of a system of cameras and sensors known as SBINet and a steel “pedestrian” fence erected on more than 600 miles of the southwestern U.S. border.

Lawmakers heard an all too familiar tale of waste and woe. The average cost of pedestrian fencing has jumped from $3.5 to $6.5 million per mile, and costs for vehicle fencing have doubled. The Government Accountability Office (GAO) testified that the sensors used in the SBINet system still suffer from too many false detections and are vulnerable to bad weather despite the fact that the military has effectively used camera and sensor technology to track enemy movements for years at a much lower cost. But it didn’t stop there, the sad song continued:

•Full deployment of SBINet is now projected for 2016—seven years after the original contract with Boeing was scheduled to end;

•The pedestrian fence has been breached more than 3,000 times so far, with each repair costing at least $1,300;

•A long-overdue DHS study estimates the costs of maintaining the fence over a 20-year period at $6.5 billion— which is likely a low ball.

Sadly, even the new price tag may not tell the whole story. As our analysis of fence costs points out, maintenance estimates by the Congressional Budget Office and U.S. Army Corps of Engineers put that figure at $8 billion years ago, before the same labor and materials price hikes that have bumped up the cost of fence construction.

Problems with SBINet are due in large part to a contract that even a Boeing spokesman admitted was “awkward.” That’s a bit of an understatement: The delays and cost overruns have made the project a poster child for problems with “lead systems integrator” contracting strategy, where one company acts as a “system integrator” that tries to cobble together several different projects completed at different times and with different subcontractors. Incredibly, DHS just renewed Boeing’s contract for another year, despite a string of failures that has dogged the contract almost since its 2006 inception.

The fundamental question, of course, is whether the fence actually works. The unfortunate answers range between “no” and “not sure”. Because the SBINet technology still isn’t functional, border patrol agents are forced to work with outdated and ineffective technology, decreasing the border’s effectiveness. And the border patrol hasn’t yet created a way to quantitatively measure whether or not the pedestrian fence is actually keeping people out. The number of people caught trying to cross the border actually declined in several sectors before the fence went up, showing only that those numbers are influenced by factors other than the existence of a 14-foot steel wall.

Like too many expensive national security projects, Congressional commitments to the border fence were made in a fiscal vacuum. Yet Senators exacerbated irresponsible spending by inserting a requirement that would add another 300 miles of pedestrian fence at a cost of some $40 billion. Even though they’ve seen this one before, maybe lawmakers should review the hearing transcript: When asked whether the American taxpayer had benefitted from spending on SBI, the GAO analyst replied with an unequivocal “No.”

Going on at Taxpayer.net This Week

UPDATE: Fiscal Year 2010 Earmark Databases – Senate Transportation, CJS, Interior Added (9/15)

Royalty-in-Kind Programs Costing Taxpayers Millions

Salazar Annouces Termination of Royalty-in-Kind Program

A Billion Here, a Billion There

Update: Senate adds $2.5 billion for C-17′s to Spending Bill

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.

Notable Quote

“…it is hard for me to believe that DHS would award a contract of 1.1 billion dollars over 3 years and continue to award task orders without viable results.”

-Rep. Loretta Sanchez (D-CA), opening statement at a Homeland Security subcommittee hearing on “SBInet: 3 Years Later”

From: the weekly wastebasket at www.taxpayer.net

==========

Dr. Nelson Lichtenstein, author of The Retail Revolution: How Wal-Mart Created a Brave New World of Business

“Nelson Lichtenstein has written a book on Wal-Mart. You can read it as a sober indictment of the rogue company that also happens to be the world’s largest corporation. Or you can read it as a brilliantly reported study of what’s gone wrong with the American — and the global — economy. Either way you will read it, as I did, with complete fascination.”

-Barbara Ehrenreich, author of Nickel & Dimed

==========

AP transcribes false GOP attacks on health reform

The Associated Press uncritically reported Rep. Sue Myrick’s (R-NC) attacks on health care reform, including her false comparison of Democratic reform proposals to the health care systems in Canada and the United Kingdom and her claim that a study by the National Federation of Independent Business (NFIB) “found that the health care tax increases being proposed would lead to the elimination of more than 1.6 million jobs.” In fact, Democrats are not considering a single-payer or socialized health care system, and the NFIB study Myrick cited examined a “hypothetical” policy, not the provisions of the actual bills under consideration.

Read More

mediamatters.org

==========

Andy Borowitz – GOP Plan: If Uninsured Die Fast Enough, They Won’t Need Coverage

BorowitzReport.com
September 18, 2009

WASHINGTON (The Borowitz Report) – Congressional Republicans offered an alternative to President Obama’s health care plan today as they unveiled their own proposal which would ask uninsured Americans to die faster and therefore not require coverage.

“A new study shows that the uninsured die faster than the insured,” Rep. John Boehner (R-OH) told reporters in Washington. “Our plan calls for them to die even faster.”

Rep. Boehner said that the sooner the uninsured die, “the sooner they will be relieved of the stress and anxiety caused by not having health coverage.”

The House Minority Leader said that the G.O.P. plan would over massive tax cuts to uninsured Americans who die “in a timely fashion.”

“If these Americans do the patriotic thing and die before they make it to the emergency room, the least we can do is reward them with a tax cut,” he said. More here.

Follow Andy Borowitz on Twitter: twitter.com/BorowitzReport

==========

three thousand words

(click here to view)

Elena Steier Center for American Blogress Sep 20, 2009 EditorialCartoonists.com

Jeff Parker: … acute partisanitis (note: I love the fbomb)
(www.cagle.com)

Tom Toles: the accident is over, though it may not feel like it
(d.yimg.com)

THE NIGHTMARE OF CHRISTIANITY: HOW RELIGIOUS INDOCTRINATION LED TO MURDER

By Max Blumenthal, The Nation

The authoritarian culture of the Christian right pushed a deeply disturbed young man named Matthew Murray over the
edge.

Complete article at:

www.alternet.org

==========

RACHEL MADDOW: WHY DO 1/3 OF NEW JERSEY CONSERVATIVES THINK OBAMA MIGHT BE THE ANTI-CHRIST?

By Rachel Maddow, The Rachel Maddow Show

Maddow gets to the bottom of a bizarre political mystery with Christian Right expert Frank Schaeffer.

Complete article at:

www.alternet.org

==========

ANTI-CHOICE FLORIDIANS PEDDLING CONSTITUTIONAL AMENDMENT TO CRIMINALIZE BIRTH CONTROL PILL

By Liliana Segura, AlterNet

The “Personhood Amendment” would define someone as a “person,” regardless of age or health status, “from the
beginning of the biological development of that human being.”

Complete article at:

www.alternet.org

==========

Teen birth rates highest in most religious states

Link may be due to communities frowning on contraception, researchers say

By Jeanna Bryner

Wed., Sept . 16, 2009

U.S. states whose residents have more conservative religious beliefs on average tend to have higher rates of teenagers giving birth, a new study suggests.

The relationship could be due to the fact that communities with such religious beliefs (a literal interpretation of the Bible, for instance) may frown upon contraception, researchers say. If that same culture isn’t successfully discouraging teen sex, the pregnancy and birth rates rise.

Mississippi topped the list for conservative religious beliefs and teen birth rates, according to the study results, which will be detailed in a forthcoming issue of the journal Reproductive Health. (See chart below.)

However, the results don’t say anything about cause and effect, though study researcher Joseph Strayhorn of Drexel University College of Medicine and University of Pittsburgh offers a speculation of the most probable explanation: “We conjecture that religious communities in the U.S. are more successful in discouraging the use of contraception among their teenagers than they are in discouraging sexual intercourse itself.”

The study comes with other significant caveats, too:

The same link might not be found for other types of religious beliefs that are perhaps more liberal, researchers say. And while the study reveals information about states as a whole, it doesn’t shed light on whether an individual teen who is more religious will also be more likely to have a child.

“You can’t talk about individuals, because you don’t know what’s producing the [teen birth] rate,” said Amy Adamczyk, a sociologist at the City University of New York, who was not involved in the current study. “Are there just a couple of really precocious religious teenagers who are running around and getting pregnant and having all of these babies, but that’s not the norm?”

Strayhorn agrees and says the study aimed to look at communities (or states) as a whole.

“It is possible that an anti-contraception attitude could be caused by religious cultures and that could exert its effect mainly on the non-religious individuals in the culture,” Strayhorn told LiveScience. But, he added, “We don’t know.”

Bible states
Strayhorn compiled data from various data sets. The religiosity information came from a sample of nearly 36,000 participants who were part of the U.S. Religious Landscapes Survey by the Pew Forum on Religion and Public Life conducted in 2007, while the teen birth and abortion statistics came from the Centers for Disease Control and Prevention.

For religiosity, the researchers averaged the percentage of respondents who agreed with conservative responses to eight statements, including: ”There is only one way to interpret the teachings of my religion,” and ”Scripture should be taken literally, word for word.”

They found a strong correlation between statewide conservative religiousness and statewide teen birth rate even when they accounted for income and abortion rates.

More abortions among teens in less religious states
For instance, the results showed more abortions among teenagers in the less religious states, which would skew the findings since fewer teens in these states would have births. But even after accounting for the abortions, the study team still found a state’s level of religiosity could predict their teen birth rate. The higher the religiosity, the higher was the teen birth rate on average.

John Santelli of the Mailman School of Public Health at Columbia University calls the study “well-done,” adding that the results are not surprising.

“The index of religiosity is tapping into more fundamentalist religious belief,” Santelli said. “I’m sure there are parts of New England that have very low teen birth rates, which have pretty high religious participation, but they’re probably less conservative, less fundamentalist type of congregations. ”

Other factors that may have been important to consider include ethnic backgrounds of state residents, according to Adamczyk, the City University of New York sociologist.

“We know that African American women on average tend to underreport their abortions, which means they could also underreport the likelihood that they got pregnant,” Adamczyk said. “If you’re dealing with states with a high number of African American women, you might run into that problem.”

Adamczyk’s own, separate research has shown a nearly opposite correlation, at the individual level. “What we find is that more religious women are less likely to engage in riskier sex behaviors, and as a result they are less likely to have a premarital pregnancy,” Adamczyk said during a telephone interview. But for those religious teens who do choose to have premarital sex, they might be more likely to ditch their religious views and have an abortion, she has found.

Cause and effect?

Adamczyk says the idea that anti-contraception principles could be behind the link is controversial, as studies on the topic have varied results. “The idea is that in the heat of the moment, a young woman who has said, ‘I’m going to be a virgin on my wedding night,’ is with her boyfriend and she says ‘Let’s just do it.’ And since they didn’t plan it, nobody has a condom. And so it increases their chances of a pregnancy,” Adamczyk said.

Earlier marriage among religious individuals could also partly explain the finding.

“In the south, there is a higher rate of marriage of teenagers. And one possible explanation is just that in the southern states, which are also more religious, people just get married earlier and have planned pregnancies and those have perfectly good outcomes,” Strayhorn said. He added that he doesn’t think the earlier marriage idea explains the religion-birth link.

Top 10 states with highest teen birth rates:

1.Mississippi
2.New Mexico
3.Texas
4.Arkansas
5.Arizona
6.Oklahoma
7.Nevada
8.Tennessee
9.Kentucky
10.Georgia

Top 10 most conservatively religious states:

1.Mississippi
2.Alabama
3.South Carolina
4.Tennessee
5.Louisiana
6.Utah
7.Arkansas
8.North Carolina
9.Kentucky
10.Oklahoma

Complete article at:

www.livescience.com

==========

Company fined in religious discrimination case

September 18, 2009

LOUISVILLE, Ky. (AP) — An insurance company has agreed to pay almost $75,000 in fines to settle a religious discrimination claim.

The Justice Department announced the settlement Friday involving Des Moines, Iowa-based Guideone Mutual Insurance Co. and two authorized agents, which had advertised special homeowners’ and renters’ benefits called FaithGuard to “churchgoers” and “persons of faith.”

Under the agreement, the defendants must pay a total of $29,500 to three plaintiffs and $45,000 as a civil penalty.

GuideOne had offered the FaithGuard endorsement in at least 19 states. It must cease the practice under the agreement.

The lawsuit was the result of complaints filed by an atheist, an agnostic, and the Lexington Fair Housing Council. The complaint was filed in U.S. District Court for the Western District of Kentucky in conjunction with a proposed consent decree.

Complete article at:

www.wztv.com

From: twitter.com/Richard_Dawkins

==========

A Whiter Shade of Faith: Saturday’s Tax Protests and the Religion of Whiteness

By Peter Laarman
September 13, 2009

www.religiondispatches.org

Buffalo Bill’s defunct
who used to
ride a watersmooth-silver stallion
and break onetwothreefourfive pigeons justlikethat

Jesus
he was a handsome man
and what I want to know is
how do you like
your blue-eyed boy
Mister Death

—e. e. cummings

When I saw the Confederate flags and angry signs and heard the rhetoric of frustration coming from Dick Armey’s protest rally at the Capitol grounds on Saturday, I thought: So now it’s come to this—white people having to stake their claim to social space in a culture they think is overrun with foreigners and people of color?

I guess it has come to this. As Eric Reitan noted in these pages recently, a significant portion of the population has been seriously and superstitiously unnerved by the disorder represented by a president who (in their eyes) is both racially “other” and a foreigner.

We have long understood that nostalgia is the most dangerous of emotions in respect to political and cultural life. The nostalgia of the Weimar Germans for a strong and aggressive Reich, the current nostalgia of many Russians for the gold old days of Stalin or even Czar Alexander, and now—in our country—the nostalgia of white people and white men especially for a better time when, to be white, male, and Christian stood for something. A time when white men cold take certain things for granted, like the right to be ill-informed and obtuse but still receive deference and some degree of social privilege.

In yesterday’s New York Times, Barbara Ehrenreich and Dedrick Muhammad point to the irony of white folks believing that black people will get all the goodies in Obama Time, when in fact it is African American families (many of them new entrants to the middle class) who have taken and will continue to take the worst hits in the Great Recession that continues to unfold.

But the thing about a mythos, in this case about an entire worldview shaped by resentment and fear of falling, is that it is not susceptible to being corrected by mere facts.

I think it might be helpful to look back at expressions of White Faith from a century ago—Buffalo Bill’s Wild West show and the Uncle Remus tales of Joel Chandler Harris—before returning to consider the possible religious significance of Dick Armey and his tea-partying troops.

Buffalo Bill: Putting White Folks Securely in the Saddle

Novelist Larry McMurtry speculates that Buffalo Bill Cody was the most recognizable celebrity in the world at the turn of the twentieth century. Cody had been chief scout for the Third Cavalry during its Indian removal campaigns (in 1872 he received the Medal of Honor for “gallantry” in this activity).

He was also, of course, a famous marksman and slaughterer of bison (he personally shot 5,000 of them in 1867-68, furnishing meat to railroad workers). And he became a great showman after seeing some puny Wild West simulations and deciding that he could mount a compelling extravaganza built around his own legend and looks—along with a cast of hundreds and hundreds of real Indians (Sitting Bull himself, for example) and other “roughriders from around the world” (Turks, Mongols, Arabs, Georgians, Gauchos, etc.) on horseback. Annie Oakley and Wild Bill Hickok showed off their sharpshooting gifts at various points in the Show’s long life; Cody himself always played Gen. George Armstrong Custer reenacting Custer’s Last Stand, the big crowd-pleasing tableau that ended the Show.

The Wild West Show penetrated every corner of the country (my grandfather recalled thrilling to see it as a farm kid in Wisconsin) as well as the capitals of Europe. In a bold move, Cody took his show to Chicago during the 1893 World’s Fair; and drew thousands of Fair patrons and their dollars away from the White City after Fair promoters rebuffed Cody’s pitch to make the Show an official exhibit. The Show was presented in Britain to mark Queen Victoria’s Jubilee. Cody was received by Pope Leo XIII in 1890.

The Wild West Show was a stupendous social and financial success for Cody, who died in 1917 (on the cusp of America’s entry into World War), and was saluted in death by Kaiser Wilhelm II, King George V, and President Woodrow Wilson.

But what did the Wild West Show say about whiteness? It said (I think) that whiteness was everywhere sweeping all before it, all over the globe. It said that the martial virtues of the white man—even of George Custer in defeat —could not be resisted. It said that lesser peoples (Native Americans, those other exotics on horseback, even African-America Buffalo Soldiers) could ride in the parade, but never in front: they could only ride as colorful adjuncts to the white man’s empire.

And here is a telling side note about this blue-eyed apotheosis of white manhood: as a young boy in the Iowa Territory, Bill Cody had saved his father, Isaac—an outspoken anti-slavery man—from being stabbed to death by an enraged racist mob.

Zip-a-Dee-Doo-Dah: Tales of White Superiority

Joel Chandler Harris staged no spectacular celebrations of whiteness: he didn’t need to. His Uncle Remus tales, published in book form between 1880 and 1905, were hugely successful in explaining to white people, both in the North and South, why the Civil War and Abolition had been a big mistake. Born poor and illegitimate and afflicted with shyness and a terrible stammer, Harris apprenticed himself to a powerful planter and newspaper publisher at age 15. While living on this patron’s plantation, he started absorbing the slaves’ folktales, many of whose characters (the trickster Br’er Rabbit, for example) came directly from West African folkloric traditions.

As H.L. Mencken was the first white writer to observe, Joel Chandler Harris basically stole a big chunk of African American oral tradition, popularized it, and got rich from it once he began publishing his tales in The Atlanta Constitution in 1876.

Like Cody, Harris thought of himself as an entertainer, not as a paladin of white supremacist ideology; although the Constitution very much promoted such an ideology. What Harris did instead was render blacks as childlike creatures, helplessly naïve and funny, who could not really be expected to exercise the rights and bear the burdens of responsible citizenship. This was good news to Northern whites in particular, absolving them of any remaining twinges of conscience concerning the disenfranchisement and brutalization of the dusky people their own parents and grandparents had recently fought and died to liberate.

As historian David Blight pointed out in his magisterial Race and Reunion: The Civil War in American Memory, it was important for Northern whites during this period to convey to their Southern counterparts the message that whatever their sectional differences had been, there was no disagreement on the matter of black inferiority.

Harris died in 1905, the same year that Rev. Thomas Dixon Jr. produced The Clansman: An Historical Romance of the Ku Klux Klan. “The Clansman” was the original title for D.W. Griffith’s film, The Birth of A Nation (1915), which President Wilson (Dixon’s classmate at Johns Hopkins) is reputed to have praised as “history written by lightning” following a private White House screening. This matters because the demeaning characterization of black people in the Uncle Remus series supported the notion that white Southerners were entirely justified in attacking Reconstruction and retaking state power by means of savage Klan terrorism.

The Last Gasp of the “Lost Cause”? Dick Armey’s Brand of White Faith

Born dirt poor in North Dakota, Armey hit the big time by making a successful 1984 run for the House in a district representing a wealthy slice of Dallas-Fort Worth. This followed a stint teaching free-market economics at North Texas State University. Dick Armey definitely meant it when, while serving as majority leader, he called Hillary Clinton “a Marxist.” And no one believed that his “Barney Fag” crack in relation to the Massachusetts legislator was any slip of the tongue.

Armey apparently does believe that socialism is on the march with Obama in the White House. He recently told the Los Angeles Times, “If I hadn’t stood up, Obamacare would be a train running right through this country right now.” Like many other propagators of an Astroturf-ish white “populism,” Armey has good reason to rally ’round the flag of acquisitive individualism: today he is a seriously rich man, having worked for a leading Washington lobbying firm in the years since leaving elected office. In Armey’s own words, he made “a darned handsome pile of dough” from using his influence for the benefit of assorted industries and foreign governments.

Armey’s racial raison d’etre in creating and promoting Freedomworks is to avoid the disgrace of white men going too gently into that goodnight. Armey is a practiced confrontationist. When he was back in the House, he claimed not to enjoy confrontation; but then he would always add: “somebody has to be the first guy to stand up.”

Pastoral Responsibility in the Waning Days of White Male Dominance

Religion is what religion does. I believe we should count ourselves lucky that we have not yet had a much more vicious upsurge of White Nationalism than Armey’s tea-partying army represents. I mean, white men have had it so good in this country for so long; in part thanks to the mythos of racial superiority that figures like Cody and Harris helped to create a century and more ago.

Authentic religion ought to be capable of helping people deal with loss. Faith leaders today could and should be helping their native-born white congregants look hard at their deep-down assumptions of privilege. They could and should be helping congregants prepare to negotiate a new social landscape.

I don’t see a lot of that kind of leadership out there. But whether or not today’s clergy leaders are willing to step up and accept this pastoral responsibility, the days of white male dominance are clearly numbered.

And what I want to know is: How do you like your blue-eyed boy, Mr. Death?

Peter Laarman is executive director of Progressive Christians Uniting, a network of activist individuals and congregations headquartered in Los Angeles. He served as the senior minister of New York’s Judson Memorial Church from 1994 to 2004. Ordained in the United Church of Christ, Peter spent 15 years as a labor movement strategist and communications specialist prior to training for the ministry.

R.J. Matson: Reaction to the Belleville school bus reaction
(www.stltoday.com)

Clay Bennett: Scary
(media.timesfreepress.com)

==========

Pray for Glenn Beck

Friday, September 18, 2009

While conservatives spread fear and confusion, our friends, loved ones, and neighbors are suffering.

Tell Glenn Beck to tell the truth about health-care reform.

Glenn Beck has received a lot of attention for his inflammatory rhetoric lately. Recently, he shared a personal story about his daughter who has cerebral palsy, which gets to the heart of his fears about health-care reform:

They [the government] will say exactly what doctors said about my 21-year-old daughter: “She may not really have a quality of life. She may not walk or talk or feed herself. But then again miracles happen.” The “then again, miracles happen” part of that will be left out of the conversation. And I will not be able to see my daughter’s 21st birthday, where I can reflect with her how miracles do happen. Because really, as I was told at the beginning of her life: Well, what kind of quality of life is she going to really have? I don’t know, but that’s for God to decide, not the government. -The Glenn Beck Program, 8/6/2009

His predictions that health-care reform would lead to government bureaucrats euthanizing people like his daughter are dead wrong, but we agree with Glenn on this point: God is the giver of life. However, what Glenn fails to realize is that lack of affordable, accessible health care is one of the reasons that people choose to terminate difficult pregnancies.

Consider two very close friends of the Sojourners family who recently found out that their unborn baby daughter has a brain tumor. To protect their privacy, we’ll call her Milagro – meaning “Miracle” – or Mila, for short.

The tumor is the same size as her brain and is causing a build-up of fluid and the enlargement of her head. Significant brain damage is near certain. She’s been given a 15 percent chance of survival and then only with a severely impaired quality of life. And yet, they’ve been told what Glenn’s doctors told him: “miracles happen.”

Mila will likely be delivered in December. With their current coverage, premiums, deductibles, and out-of-pocket costs for a complicated pregnancy will cost 20 percent of their modest income. But if their total bills exceed $250,000, they must pay all additional expenses. It’s unclear how likely this is, but multiple brain surgeries and the additional care Mila may need could spell deep financial trouble.

But their worries don’t stop there. Our friends receive their insurance through the mother’s university. After she completes her Ph.D. this spring, her coverage will end in August. After that, with the possibility of Mila’s severe pre-existing conditions, they may not be able to get any coverage at all.

Our friends do not fear a future where a government bureaucracy forces them to kill their child. Doctors in the current system have already suggested abortion. Their fear is much more immediate: If by some miracle their child survives beyond the womb, will they be able to afford the care she’ll need once the insurance coverage ends?

Contrary to Glenn’s fears, nothing in any of the proposed legislation would take away the right of a parent to carry her child to term. Nothing in any of the current legislation would deny life-saving treatment to anyone in need.

Those painful decisions would still be left to the families, and ultimately, yes, to God – just like the choices Beck had with his daughter Mary. It’s our current system that does not ensure that families have all the care they need – before or after the birth of a child.

All of the reform proposals being debated include provisions to cap out-of-pocket expenses, end exclusions for pre-existing conditions, and eliminate limits like our friends’ annual $250,000 cap on coverage – removing the financial pressures that currently lead many families to terminate difficult pregnancies.

Tell Glenn Beck that health-care reform is pro-life – consistently pro-life.

go.sojo.net

Lately, Glenn has repeatedly asked his listeners for prayer:

I’m fighting for you and me, my children, your children. I would ask you for one thing. Please, keep me in your prayers, keep my staff in your prayers, for safety, for wisdom, please. -The Glenn Beck Program, 9/8/2009

It should be no surprise that we strongly disagree with many of Glenn’s views, but we too believe in a God far greater than all of us. So on this point, let’s take Glenn at his word and pray for him to have wisdom as he speaks out on these issues.

Tell Glenn you’re praying for him – that he’ll choose hope over fear.

Pray that stories like Mila’s will help convince Glenn that his fears of a government takeover are dangerous distractions compared to the real-life suffering that Americans are experiencing right now.

Campaigns by other groups have shown that targeting Glenn’s advertisers gets real results, so we’re including them in this message in order to hold him accountable for his words.

go.sojo.net

And please pray for our friends’ unborn daughter – that Mila, like Glenn’s now 21-year-old daughter Mary, will grow up to be a miracle who lives a long and blessed life, regardless of what happens with health-care reform.

Blessings,

Jim Wallis

From: “Jim Wallis”

==========

A message to Christians who oppose Public Health Care, from a fellow Christian: Read more Bible. Watch less Fox News. (self.politics)

I keep seeing headlines and articles that seem to put Christians, Republicans and Public-Healthcare-Opposers all in one group together, which is either totally unfair and biased, or suggests that there are a lot of Christians who are actually opposed to a public health care system… I find this a little worrying and confusing, and so write this not as evangelism to non-Christians (you guys can stop reading now…), but as evangelism to conservative Christians, who I ask to turn off Fox News and pick up their bible and see what you find in there about the matter…

The old question of WWJD (What Would Jesus Do?) may be a little dorky and a little clichéd, but for a Christian it’s often a good way to start thinking about moral/ethical dilemmas, or even simple every day scenarios.

Now I for one can’t believe that Jesus would be against the public health care option, and I can’t imagine too many people who could honestly say he would be. He asks us to love our neighbour, enemy and friend alike, to help the sick and lame no matter what the social, financial or potentially life-threatening cost (i.e. the parable of the Good Samaritan). He is quite specific about giving away wealth, rather than hoarding it. Jesus would be in favour of the entire public paying what they can afford, towards the spiritual and physical care of their peers.

Now I’m not quite saying that Jesus would be in favour of raising taxes. After all, he was clearly not a fan of the Roman Empire and their over-taxing of the poor. But his problem was with the Empire taxing poor people to increase the divide between poor and wealthy. He was against the continual exploitation of his people. And by “his people” I am of course referring especially to the meek, the poor, the poverty stricken, the injured, the lame, the sick. It’s not that Jesus was only gunning for the sick and lame, but he made a point of trying to bring a voice to those without one.

If Jesus were around today, he would be spending his time helping those without any health care or insurance (probably in quite a different way to Obama, to be totally honest — he would want to wholly subvert the system, rather than work within it). The Pharisees of his time would be today’s Middle America, Republicans and Democrats alike, for they participate in an Empire where success is measured financially and socially, rather than through servitude and grace.

Jesus was not a capitalist. The ‘Free Market’ is not a Christian construct.

It saddens me to see conservative Christians in America using the language of Christ along side the language of capitalism, as if one is ethically and spiritually aligned with the other. As if some how Jesus wants you to be a wealthy CEO. Equally, I don’t think Jesus would strictly align with any of the political ideologies that are commonly believed to be inherently “evil”, like Socialism/Communism/Fascism (BTW, they’re not all the same thing).

Large chunks of the New Testament deal with the Roman Empire and how it oppresses and mistreats the people of God. In today’s world, the Empire is the extreme capitalist movement in America. The leader and army of today’s empire are the extremely wealthy CEOs/managers/etc and massive companies and markets where people are encouraged to consume more and more, and care only for themselves. Capitalism is the new Imperial Cult.

I think it’s best summed up a quote from the J-man himself on the topic of taxation — “Give to Caesar what is Caesar’s, and to God what is God’s”.

Taxation and wealth should not be concerns for Christians. Jesus asks us to give our lives to helping others and to worshiping God. I personally cannot fathom how one can be anti-public-healthcare while following Jesus’ teachings.

From: http://www.reddit.com/user/drfrogsplat

Complete article at:

www.reddit.com

==========

AU Press Release :: AU, Allied Groups Urge Attorney General To Reverse Bush-Era ‘Faith-Based’ Rule

Thursday, September 17, 2009

Americans United, Allied Groups Urge Attorney General To Reverse Bush-Era ‘Faith-Based’ Rule

Coalition Of Religious And Public Policy Groups Says Legal Memo Threatens Core Civil Rights And Religious Freedom Protections

September 17, 2009

Americans United for Separation of Church and State today joined a coalition of 58 organizations urging Attorney General Eric Holder to revoke a Bush-era rule regarding “faith-based” funding that the groups say threatens civil rights and religious freedom.

In June of 2007, the Office of Legal Counsel (OLC) issued a legal memo asserting that a federal law called the Religious Freedom Restoration Act (RFRA) gives religious organizations a blanket right to discriminate on religious grounds when hiring staff in taxpayer-funded programs.

In a joint letter to Holder today, a broad coalition of organizations said RFRA does no such thing.

“The Bush administration twisted federal law to buttress its misguided policies and allow religious discrimination in taxpayer-funded ‘faith-based’ programs,” said the Rev. Barry W. Lynn, executive director of Americans United. “It’s time for the Obama administration to correct this error.”

Read the full press release at au.org www.au.org

Americans United (AU) is a nonpartisan organization dedicated to preserving the constitutional principle of church-state separation as the only way to ensure religious freedom for all Americans.

Americans United for Separation of Church and State www.au.org

==========

AU Special Report :: The Religious Right In 2009: Less Pious, More Partisan

Tuesday, September 15, 2009

An Americans United Special Report

Fundamentalist Political Movement Focuses On Defeating Obama Health-Care Proposals; Electing Republicans To Congress, White House

September 15, 2009

Religious Right leaders and activists will meet in Washington, D.C., at the end of the week for their first major gathering since President Barack Obama took office. These fundamentalist forces have an ambitious – and highly partisan – political agenda that ultimately seeks to merge religion and government.

Read the Special Report at au.org www.au.org

Americans United (AU) is a nonpartisan organization dedicated to preserving the constitutional principle of church-state separation as the only way to ensure religious freedom for all Americans.

Americans United for Separation of Church and State www.au.org

==========

three thousand words

(click here to view)

David Cohen Freelance Sep 8, 2009 EditorialCartoonists.com

Pat Bagley: … core of the utah gop
(www.cagle.com)

Ted Rall
(editorialcartoonists.com)

The rich still run the US – America’s traumatic recession should have ushered in a wave of progressive political reform. It hasn’t happened

Mark Weisbrot guardian.co.uk,
Thursday 17 September 2009

Corruption takes many forms in different countries and locations. Here in the United States it may not be as common to pay off a judge or a customs official as it is in most low- and middle-income countries, but we do have quite a bit of legalised bribery, especially in the form of electoral campaign contributions. The most obvious current case is that of healthcare reform, where the powerful insurance, pharmaceutical and other lobbies are in the process of vetoing some of the most important parts of the healthcare reform that most Americans want and need.

For example, the vast majority of Americans favour a public option – insurance offered by the government, as we have for senior citizens in the Medicare programme – yet these powerful interests are blocking it in the Senate. This is despite the modest nature of the reform, which would not provide free or universal insurance, but rather an additional option that employers and individuals could buy into, with some subsidies for those who could not afford it. The insurance companies don’t want competition, and the pharmaceutical corporations don’t want another potentially large buyer that could bargain against their own monopoly power over the prices of patented drugs.

The United States is a rich country, so it seems obvious that our forms of corruption are preferable to those that plague developing countries. And they are, in the sense that it that it is always better to be a rich country and have rich country problems than to be a poor or middle-income country. But if we look at the US from the point of view of its potential – and I don’t mean utopian dreams but merely what is quite feasible and practical in the immediate or near future – it seems that we have a very limited form of democracy.

One year after the collapse of Lehman Brothers and nearly two years into our worst recession since the Great Depression, we have almost nothing to show in the way of reforms that could prevent a recurrence. The financial sector is probably more concentrated than it was before the crisis, and financial firms are still gambling with taxpayer guarantees, and even subsidies.

Some are doing remarkably well – Goldman Sachs, a recipient of billions of dollars of taxpayer assistance, is expected to pay bonuses averaging $700,000 each to 30,000 employees. The vastly over-bloated financial industry that brought us this calamity has shrunk by only 7.7% in terms of employment, far fewer than the percentage of jobs lost in manufacturing (14.6%) or construction (31.6%), since the recession began.

One reform that many experts saw as necessary to avoid future financial disasters was to regulate the trading of derivatives – financial instruments that are based on some other assets or values – so that they could be traded and priced on an exchange like stocks, bonds or commodities. Because many of these often complex derivatives were traded outside of exchanges, financial companies were able to hide enormous losses that only showed up when things fell apart.

But off-exchange trading is a highly profitable business – because when there are no market prices, there is limited competition. So Wall Street is pushing this modest but important reform off the table as well.

“Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall,” Barack Obama announced Monday in a speech on Wall Street. But so far, it looks like that’s exactly what they are doing.

What then are we to make of the prospects for reform under an Obama administration and a Democratic Congress? It is still relatively early in the game, but one thing seems clear: This administration needs a lot more pressure from the progressive end of the political spectrum, especially the people who did the work and made the contributions that elected this president.

Most of the pressure is coming from the right, which is to be expected given the historic shift that the 2008 election represented. For nearly four decades the politics of the country had been shifting rightward, including during the Clinton administration. Most importantly, the rules of the game have been steadily rewritten in ways that shifted the distribution of income upward.

The latest data that now takes us through the end of the last business cycle (2002-2007) shows that two-thirds of the income gains during these years went to the top 1% of the income distribution. This brought the income share of the top 1% to its highest level since 1928. The bottom 90% got only about 12% of the income gains. This continued and accelerated a trend that began in the mid 1970s, which was also quite pronounced during the Clinton administration, when the top 1% captured 43% of all income gains (as compared to just 11% in the 1960s).

The election of 2008 was a turning point, partly because the recession and financial crisis forced swing (mostly white, working-class) voters to focus on the economic issues and see that they were getting hammered under Republican rule.

The current recession will reverse that upward redistribution temporarily, as happened in the last recession, because a lot of wealth disappears. But whether we get back on track toward a more equitable society when the economy recovers will depend on structural reforms. Healthcare is one such reform – and the outcome is still undetermined – but we also need reforms that more directly help the majority of Americans to share in the gains from productivity growth.

For this reason it is especially unfortunate that the Obama administration has not fought for the Employee Free Choice Act, which would make it easier for workers to recover their lost ability to form unions in the US. The most important provision in this act is known as “card check”, which would allow employees to form a union as soon as a majority of them had signed cards expressing their desire to join. This, too, is in the process of being derailed.

Income distribution is fundamental, because it is difficult to imagine social and economic progress in most other areas, including democratisation, education, poverty and social exclusion and crime as our society grows increasingly unequal. It remains to be seen whether we will see progress on this front when the economy recovers.

Complete article at:

www.guardian.co.uk

==========

Popular Bismarck restaurant closing And more …

kxnet.com North Dakota News
KXMC

The city closed part of River Road last summer for five weeks for work on Bismarck’s water treatment plant. This summer, slumping asphalt led to the closing …

http://www.kxmc.com/News/432089.asp

See all stories on this topic:

Indiana City Braces for Whirlpool Plant Closing

The Epoch Times

Among workers and local residents, the announcement of the plant’s closing produced responses ranging from feelings of betrayal to outrage. …

http://www.theepochtimes.com/n2/content/view/22035/

Briggs sets timing for Jefferson plant closing. …

Briggs & Stratton Corp. plans to shutter its Jefferson factory by the end of the year, according to a …

http://milwaukee.bizjournals.com/milwaukee/stories/2009/08/31/daily25.html

BUSINESS: Wilson mayor says plant closing will not be reversed

Tonawanda News

We can see (the Pfeiffer closing) as a disaster or see it as an opportunity.” Luring a new business to the building is about staving off some of the …

http://www.tonawanda-news.com/local/local_story_254224927.html

Arvin Sango closing Merced plant

Merced Sun-Star

By SCOTT JASON

Arvin Sango announced late this morning that it would close its Merced plant, which manufactures engine exhaust components and employs 55 …

http://www.mercedsunstar.com/108/story/1051762.html?storylink=omni_popular

Mount Pleasant Paper Plant Closing

WSMV

ITW Shippers is closing its facility in Mount Pleasant. The Columbia Daily Herald reported the company is consolidating to its facility in Arkansas.
…

http://www.wsmv.com/money/20857266/detail.html

Republic Windows CEO charged in plot to loot the company

Chicago Tribune

On Thursday Cook County prosecutors made a startling allegation: The sudden plant closing was all part of a monthslong plot by the head of Republic Windows …

http://www.chicagotribune.com/news/local/chi-republic-windows-11-sep11,0,771746.story

Reel-Tales » Mercury plans for Wisconsin plant’s closing

Mercury plans for Wisconsin plant’s closing.
Posted on September 12th, 2009

Mercury Marine confirmed Sunday that its contract proposal for union employees …

http://reel-tales.co.cc/?p=1745

Plant Closing, Putting 70 People Out Of Work

ABC 33/40 News -

Plant Closing, Putting 70 People Out Of Work – A wooden pellet plant in Selma has closed, putting dozens of people out of work.

http://www.abc3340.com/news/stories/0909/656132.html

==========

Black Sea Crisis Deepens As US-NATO Threat To Iran Grows

By Rick Rozoff
Global Research, September 16, 2009
Stop NATO

Tensions are mounting in the Black Sea with the threat of another conflict between U.S. and NATO client state Georgia and Russia as Washington is manifesting plans for possible military strikes against Iran in both word and deed.

Referring to Georgia having recently impounded several vessels off the Black Sea coast of Abkhazia, reportedly 23 in total this year, the New York Times wrote on September 9 that “Rising tensions between Russia and Georgia over shipping rights to a breakaway Georgian region have opened a potential new theater for conflict between the countries, a little more than a year after they went to war.” [1]

Abkhazian President Sergei Bagapsh ordered his nation’s navy to respond to Georgia’s forceful seizure of civilian ships in neutral waters, calling such actions what they are – piracy – by confronting and if need be sinking Georgian navy and coast guard vessels. The Georgian and navy and coast guard are trained by the United States and NATO.

The spokesman of the Russian Foreign Ministry addressed the dangers inherent in Georgia’s latest provocations by warning “They risk aggravating the military and political situation in the region and could result in serious armed incidents.” [2]

On September 15 Russia announced that its “border guards will detain all vessels that violate Abkhazia’s maritime border….” [3]

Russia would be not only entitled but obligated to provide such assistance to neighboring Abkhazia as “Under mutual assistance treaties signed last November, Russia pledged to help Abkhazia and South Ossetia protect their borders, and the signatories granted each other the right to set up military bases in their respective territories.” [4]

In attempting to enforce a naval blockade – the International Criminal Court plans to include blockades against coasts and ports in its list of acts of war this year [5] – against Abkhazia, the current Georgian regime of Mikheil Saakashvili is fully aware that Russia is compelled by treaty and national interests alike to respond. Having been roundly defeated in its last skirmish with Russia, the five-day war in August of last year, Tbilisi would never risk actions like its current ones without a guarantee of backing from the U.S. and NATO.

Days after last year’s war ended then U.S. Senator and now Vice President Joseph Biden flew into the Georgian capital to pledge $1 billion in assistance to the nation, making Georgia the third largest recipient of American foreign aid after Egypt and Israel.

U.S. and NATO warships poured into the Black Sea in August of 2008 and American ships visited the Georgia port cities of Batumi and Poti to deliver what Washington described as civilian aid but which Russian sources suspected contained replacements for military equipment lost in the conflict.

Less than a month after the war ended NATO sent a delegation to Georgia to “evaluate damage to military infrastructure following a five-day war between Moscow and Tbilisi….” [6]

In December a meeting of NATO foreign ministers agreed upon a special Annual National Program for Georgia and in the same month Washington announced the creation of the United States-Georgia Charter on Strategic Partnership.

In the past week a top-level delegation of NATO defense and logistics experts visited Georgia on September 9 “to promote the development of the Georgian Armed Forces” [7] and on September 14 high-ranking officials of the U.S. George C. Marshall European Center for Security Studies arrived at the headquarters of the Georgian Ministry of Defense “to review issues of interdepartmental coordination in the course of security sector management and national security revision.” [8]

The ongoing military integration of Georgia and neighboring Azerbaijan, which also borders Iran – Washington’s Georgetown University is holding a conference on Strategic Partnership between U.S. and Azerbaijan: Bilateral and Regional Criteria on September 18 – by the Pentagon and NATO is integrally connected with general military plans in the Black Sea and the Caucasus regions as a whole and, even more ominously, with joint war plans against Iran.

As early as January of 2007 reports on that score surfaced in Bulgarian and Romanian news sources. Novinite (Sofia News Agency) reported that the Pentagon “could be using its two air force bases in Bulgaria and one on Romania’s Black Sea coast to launch an attack on Iran….” [9]

The bases are the Bezmer and Graf Ignitievo airbases in Bulgaria and the Mihail Kogalniceanu counterpart near the Romanian city of Constanza on the Black Sea.

The Pentagon has seven new bases altogether in Bulgaria and Romania and in addition to stationing warplanes – F-15s, F-16s and A-10 Thunderbolts – has 3,000-5,000 troops deployed in the two nations at any given time, and Washington established its Joint Task Force-East (JTF-East) permanent headquarters at the Mihail Kogalniceanu airbase in Romania.

A U.S. government website provides these details about Joint Task Force-East:

“All U.S. Army and U.S. Air Force training operations in Romania and Bulgaria will fall under the command of JTF–East, which in turn is under the command of USEUCOM [United States European Command]. Physically located in Romania and Bulgaria, JTF East will include a small permanent headquarters (in Romania) consisting of approximately 100-300 personnel who will oversee rotations of U.S. Army brigade-sized units and U.S. Air Force Weapons Training Deployments (WTD). Access to Romanian and Bulgarian air and ground training facilities will provide JTF-East forces the opportunity to train and interact with military forces throughout the entire 92-country USEUCOM area of responsibility. U.S. Army Europe (USAREUR) and U.S Air Forces in Europe (USAFE) are actively involved in establishing JTF-East.” [10]

The four military bases in Romania and three in Bulgaria that the Pentagon and NATO have gained indefinite access to since the two nations were incorporated into the North Atlantic Treaty Organization in 2004 allow for full spectrum operations: Infantry deployments in the area and downrange to Afghanistan and Iraq, runways for bombers and fighter jets, docking facilities for American and NATO warships including Aegis class interceptor missile vessels, training grounds for Western special forces and for foreign armed forces being integrated into NATO.

Added to bases and troops provided by Turkey and Georgia – and in the future Ukraine – the Bulgarian and Romanian sites are an integral component of plans by the U.S. and its allies to transform the Black Sea into NATO territory with only the Russian coastline not controlled by the Alliance. And that of newly independent Abkhazia, which makes control of that country so vital.

Last week the Romanian defense ministry announced the intention to acquire between 48 and 54 new generation fighter jets – American F-16s and F-35s have been mentioned – as part of “a new strategy for buying multi-role aircraft, which means to first buy aircraft to make the transition to fifth generation equipment, over the coming 10-12 years.” [11]

With the recent change in government in the former Soviet republic of Moldova – the aftermath of this April’s violent “Twitter Revolution” – the new parliamentary speaker, Mihai Ghimpu, has openly spoken of the nation merging with, which is to say being absorbed by, neighboring Romania. Transdniester [the Pridnestrovian Moldovan Republic] broke away from Moldova in 1990 exactly because of the threat of being pulled into Romania and fighting ensued which cost the lives of some 1,500 persons.

Romania is now a member of NATO and should civil war erupt in Moldova and/or fighting flare up between Moldova and Transdniester and Romania sends troops – all but a certainty – NATO can activate its Article 5 military clause to intervene. There are 1,200 Russian peacekeepers in Transdniester.

Transdniester’s neighbor to its east is Ukraine, linked with Moldova through the U.S.-concocted GUAM (Georgia, Ukraine, Azerbaijan, Moldova) bloc, which has been collaborating in enforcing a land blockade against Transdniester. Ukraine’s President Viktor Yushchenko, whose poll ratings are currently in the low single digits, is hellbent on dragging his nation into NATO against overwhelming domestic opposition and can be counted on to attack Transdniester from the eastern end if a conflict breaks out.

A Moldovan news source last week quoted an opposition leader issuing this dire warning:

“Moldova’s ethnic minorities are categorically against unification with Romania.

“If we, those who are not ethnic Moldovans, will have to defend Moldova’s
statehood, then we will find powerful allies outside Moldova, including in Russia. Along with it, Ukraine, Turkey and Bulgaria would be involved in this fighting. Last year we all witnessed how Russia defended the interests of its nationals in South Ossetia and Abkhazia. Why does somebody believe that in case of a civil war in Moldova Russia will simply watch how its nationals are dying? Our task is to prevent such developments.” [12]

Indeed, the entire Black Sea and Caucasus regions could go up in flames if Western proxies in GUAM attack any of the so-called frozen conflict nations – Abkhazia and South Ossetia by Georgia, Nagorno Karabakh by Azerbaijan and Transdniester by Moldova and Ukraine. A likely possibility is that all four would be attacked simultaneously and in unison.

An opportunity for that happening would be a concentrated attack on Iran, which borders Azerbaijan and Armenia. The latter, being the protector of Nagorno Karabakh, would immediately become a belligerent if Azerbaijan began military hostilities against Karabakh.

On September 15 news stories revealed that the Bipartisan Policy Center in Washington, DC, founded in 2007 by former Senate Majority Leaders Howard Baker, Tom Daschle, Bob Dole and George Mitchell, had released a report which in part stated, “If biting sanctions do not persuade the Islamic Republic to demonstrate sincerity in negotiations and give up its enrichment activities, the White House will have to begin serious consideration of the option of a U.S.-led military strike against Iranian nuclear facilities.” [13]

The report was authored by Charles Robb, a former Democratic senator from
Virginia, Daniel Coats, former Republican senator from Indiana, and retired General Charles Wald, a former deputy commander of the U.S. European Command.

Iran is to be given 60 days to in essence abandon its civilian nuclear power program and if it doesn’t capitulate the Obama administration should “prepare overtly for any military option” which would include “deploying an additional aircraft carrier battle group to the waters off Iran and conducting joint exercises with U.S. allies.” [14]

The main Iranian nuclear reactor is being constructed at Bushehr and would be a main target of any U.S. and Israeli bombing and missile attacks. As of 2006 there were 3,700 Russian experts and technicians – and their families – living in the environs of the facility.

It has been assumed for the past eight years that a military attack on Iran would be launched by the United States from aircraft carriers in the Persian Gulf and by long-range Israeli bombers flying over Iraq and Turkey.

During that period the U.S. and its NATO allies have also acquired access to airbases in Iraq, Afghanistan, Pakistan (in Baluchistan, bordering Iran), Kyrgyzstan and Tajikistan in addition to those they already have in Turkey.

Washington and Brussels have also expanded their military presence into Bulgaria, Georgia and Romania on the Black Sea and into Azerbaijan on the Caspian Sea bordering northeastern Iran.

Plans for massive military aggression against Iran, then, might include air and missile strikes from locations much nearer the nation than previously suspected.

The American Defense Security Cooperation Agency announced plans last week to supply Turkey, the only NATO member state bordering Iran, with almost $8 billion dollars worth of theater interceptor missiles, of the upgraded and longer-range PAC-3 (Patriot Advance Capability-3) model. The project includes delivering almost 300 Patriots for deployment at twelve command posts inside Turkey.

In June the Turkish government confirmed that NATO AWACS (Airborne Warning and Control System) planes would be deployed in its Konya province.

The last time AWACS and Patriot missiles were sent to Turkey was in late 2002 and early 2003 in preparation for the invasion of Iraq.

On September 15 the newspaper of the U.S. armed forces, Stars and Stripes, ran an article titled “U.S., Israeli forces to test missile defense while Iran simmers,” which included these details on the biannual Juniper Cobra war games:

“Some 1,000 U.S. European Command troops will soon deploy to Israel for a large-scale missile defense exercise with Israeli forces.

“This year’s Juniper Cobra comes at a time of continued concern about Iran’s nuclear program, which will be the subject of talks in October.

“The U.S. troops, from all four branches of service, will work alongside an equal number of Israel Defense Force personnel, taking part in computer-simulated war games….Juniper Cobra will test a variety of air and missile defense technology during next month’s exercise, including the U.S.-controlled X-Band.” [15]

The same feature documented that this month’s exercise is the culmination of months of buildup.

“In April, about 100 Europe-based personnel took part in a missile defense exercise that for the first time incorporated a U.S.-owned radar system, which was deployed to the country in October 2008. The U.S. X-Band radar is intended to give Israel early warning in the event of a missile launch from Iran.

“For nearly a year, a mix of troops and U.S. Defense Department contractors have been managing the day-to-day operation of the X-Band, which is situated at Nevatim air base in the Negev Desert.” [16]

The same publication revealed two days earlier that the Pentagon conducted a large-scale counterinsurgency exercise with the 173rd Airborne Brigade and the 12th Combat Aviation Brigade last week in Germany, “the largest such exercise ever held by the U.S. military outside of the United States….” [17] The two units are scheduled for deployment to Afghanistan and Iraq, respectively, but could be diverted to Iran, which has borders with both nations, should need arise.

What the role of Black Sea NATO states and clients could be in a multinational, multi-vectored assault on Iran was indicated in the aftermath of last year’s Georgian-Russian war.

At a news conference at NATO headquarters in Brussels a year ago, Russian ambassador to NATO Dmitry Rogozin “said that Russian intelligence had obtained information indicating that the Georgian military infrastructure could be used for logistical support of U.S. troops if they launched an attack on Iran.” [18]

Rogozin was further quoted as saying, “What NATO is doing now in Georgia is restoring its ability to monitor its airspace, in other words restoring the whole locator system and an anti-missile defence system which were destroyed by Russian artillery.

“[The restoration of surveillance systems and airbases in Georgia is being] done for logistic support of some air operations either of the Alliance as a whole or of the United States in particular in this region. The swift reconstruction of the airfields and all the systems proves that some air operation is being planned against another country which is located not far from Georgia….” [19]

Early last October Nikolai Patrushev, Secretary of the Russian Security
Council “described the U.S. and NATO policy of increasing their military presence in Eastern Europe as seeking strategic military superiority over Russia.

“The official added that the United States would need allies in the region if the country decided to attack Iran.” [20]

Patrushev stated, “If it decides to carry out missile and bomb attacks
against Iran, the US will need loyal allies. And if Georgia is involved in this war, this will pose additional threats to Russia’s national security.” [21]

Later last October an Azerbaijani website reported that 100 Iranian Air Force jets were exercising near the nation’s border and that “military sources from the United States reported that territories in Azerbaijan and in Georgia may be used for attacking Iran….” [22]

Writing in The Hindu the same month Indian journalist Atul Aneja wrote of the effects of the Georgian-Russian war of the preceding August and offered this information:

“Russia’s military assertion in Georgia and a show of strength in parts of West Asia [Middle East], combined with domestic political and economic preoccupations in Washington, appear to have forestalled the chances of an immediate strike against Iran.

“Following Russia’s movement into South Ossetia and Abkhazia, Russian President Dmitry Medvedev acknowledged that Moscow was aware that serious plans to attack Iran had been laid out. ‘We know that certain players are planning an attack against Iran. But we oppose any unilateral step and [a] military solution to the nuclear crisis.’

“Russia seized control of two airfields in Georgia from where air strikes against Iran were being planned. The Russian forces also apparently recovered weapons and Israeli spy drones that would have been useful for the surveillance of possible Iranian targets.” [23]

The same newspaper, in quoting Dmitry Rogozin asserting that Russian military intelligence had captured documents proving Washington had launched “active military preparations on Georgia’s territory” for air strikes against Iran, added information on Israeli involvement:

“Israel had supplied Georgia with sophisticated Hermes 450 UAV spy drones, multiple rocket launchers and other military equipment that Georgia, as well as modernised Georgia’s Soviet-made tanks that were used in the attack against South Ossetia. Israeli instructors had also helped train Georgia troops.” [24]

Rather than viewing the wars of the past decade – against Yugoslavia, Afghanistan and Iraq – and the concomitant expansion of U.S. and NATO military presence inside all three countries and in several others on their peripheries as an unrelated series of events, the trend must be seen for what it is: A consistent and calculated strategy of employing each successive war zone as a launching pad for new aggression.

The Pentagon has major military bases in Kosovo, in Afghanistan and in Iraq that it never intends to abandon. The U.S. and its NATO allies have bases in Bulgaria, Romania, Kyrgyzstan, Tajikistan, Uzbekistan, Kuwait, Bahrain (where the U.S. Navy’s 5th Fleet is headquartered) and other nations in the vicinity of the last ten years’ wars which can be used for the next ten – or twenty or thirty – years’ conflicts.

1) New York Times, September 9, 2009
2) Ibid
3) Russian Information Agency Novosti, September 15, 2009
4) Ibid
5) Wikipedia
6) Agence France-Presse, September 8, 2009
7) Trend News Agency, September 9, 2009
Georgia Ministry of Defence, September 14, 2009
9) Turkish Daily News, January 30, 2007
10) U.S. Department of State
11) The Financiarul, September 9, 2009
12) Infotag, September 11, 2009
13) Bloomberg News, September 15, 2009
14) Ibid
15) Stars and Stripes, September 15, 2009
16) Ibid
17) Stars and Stripes, September 13, 2009
18) Russian Information Agency Novosti, September 17, 2008
19) Russia Today, September 17, 2008
20) Russian Information Agency Novosti, October 1, 2008
21) Fars News Agency, October 2, 2008
22) Today.AZ, October 20, 2008
23) The Hindu, October 13, 2008
24) The Hindu, September 19, 2008

Complete article at:

www.globalresearch.ca

==========

This Week in Petroleum (TWIP)

Wednesday, September 16, 2009

This Week in Petroleum (TWIP) has been updated to the EIA website:

tonto.eia.doe.gov

==========

CONSERVATIVES RIDE GOVERNMENT-RUN TRANSIT TO PROTEST GOVERNMENT SPENDING

By John Petro, Drum Major Institute

Irony alert.

Complete article at:

www.alternet.org

==========

P.S. to the Tea Party Express

Source: Connecticut Post, September 11, 2009

In the lead-up to the anti-health care reform, anti-Obama administration rally in Washington DC on September 12, the “Tea Party Express” bus tour held smaller, local rallies across the country. The Connecticut rally featured Ann Coulter and the Congress of Racial Equality’s Niger Innis. The bus tour was organized by Our Country Deserves Better (OCDB), a political action committee formed in 2008 to oppose Barack Obama that — like Move America Forward and the MAF Freedom PAC — has extensive ties to the Sacramento-based PR firm Russo Marsh & Rogers. At an October 2008 bus tour rally covered by the Center for Media and Democracy, OCDB’s Mark Williams accused then-candidate Obama of “socialism” and implied that he wasn’t a U.S. citizen. Of the recent rallies, Williams said, “What brought everything together was the Obamacare idea, which contains every odiferous objection.” Blogger Lindsay Beyerstein reports that BusBank, “one of the featured corporate sponsors of the Tea Party Express had to pay millions of dollars to settle lawsuits for its role in a bus fire that killed 23 elderly nursing home residents fleeing Hurricane Rita in 2005.”

==========

JUSTICE Act Would Fix Long Standing Problems with PATRIOT Act and Other Surveillance Laws News release and Fact Sheet:

“U.S. Senators Russ Feingold (D-WI), Dick Durbin (D-IL), Jon Tester (D-MT), Tom Udall (D-NM), Jeff Bingaman (D-NM), Bernie Sanders (I-VT), Daniel Akaka (D-HI) and Ron Wyden (D-OR) have introduced legislation to fix problems with surveillance laws that threaten the rights and liberties of American citizens. The Judicious Use of Surveillance Tools In Counterterrorism Efforts (JUSTICE) Act would reform the USA PATRIOT Act, the FISA Amendments Act and other surveillance authorities to protect Americans’ constitutional rights, while preserving the powers of our government to fight terrorism. The JUSTICE Act reforms include more effective checks on government searches of Americans’ personal records, the “sneak and peek” search provision of the PATRIOT Act, “John Doe” roving wiretaps and other overbroad authorities. The bill will also reform the FISA Amendments Act, passed last year, by repealing the retroactive immunity provision, preventing “bulk collection” of the contents of Americans’ international communications, and prohibiting “reverse targeting” of innocent Americans. And the bill enables better oversight of the use of National Security Letters (NSLs) after the Department of Justice Inspector General issued reports detailing the misuse and abuse of the NSLs. The Senate Judiciary Committee will hold a hearing on Wednesday, September 23rd, on reauthorization of the USA PATRIOT Act.”

Complete article at:

feingold.senate.gov

==========

How Time magazine enables Glenn Beck’s lies

Four years ago, Time magazine devoted its cover story to a puff-piece profile of Ann Coulter, the right-wing ideologue best known for serial lies and wishing death upon those she disagrees with (journalists included). Only, Time forgot about the lies and the bloodlust and portrayed Coulter in a remarkably kind light.

Read More

mediamatters.org

9/17: Is Glenn Beck Bad for America? : Glenn Beck – The 912 Project

By Editor

Glenn Beck consistently lies and present falsified information as fact. He tries to paint himself as an independent libertarian by telling Ohio and Missouri to get rid of Voinovich and Bond, both Republicans, BUT both have stated that …

Complete article at:

www.the912project.com

==========

And now for the important news ….

By Argus Hamilton

Federal Reserve Chairman Ben Bernanke declared Tuesday the recession is mostly over, causing the stock market to continue rising. It’s a game-changer. The moment the Dow Jones hits ten thousand, Republicans could care less if you call them racists.

http://www.JewishWorldReview.com

==========

three thousand words

(click here to view)

Tim Eagan The Press Democrat Sep 17, 2009 EditorialCartoonists.com

Lloyd Dangle, Troubletown: things are exactly the same, virgil
(www.cagle.com)

Bob Englehart: it’s over! go back to work!
(www.cagle.com)

Paulson’s Decision Cost Lehman, Then the World

The former Treasury boss arranged a Bear Stearns rescue but let Lehman go under. A Bear bankruptcy would’ve alarmed Fuld, thus averting the global upheaval

By Lawrence G. McDonald

My new book, A Colossal Failure of Common Sense, moves to a stark and irrevocable conclusion, that Henry Merritt Paulson, the former U.S. Treasury Secretary, made a fateful decision that within two weeks brought the world’s economy to its knees.

He decided to let Lehman Brothers, the 158-year-old Wall Street institution, go bankrupt. He need not have done so. But on that fateful weekend, Sept. 13-15, 2008, he made the decision with which he must live for the rest of his life. He would not save Lehman Brothers. As one senior Lehman managing director told me, “They put Lehman’s head underwater and watched for the bubbles.” And that did it, globally, as first the U.S. and then the rest of the world swooned.

Since last winter, I have had many hundreds of hours to ponder Paulson’s history-making decision, and while I cannot revise the truth, nor in any way let him off the hook, I am drawn to the conclusion that the Treasury boss did not lose the war on that final weekend. He lost it the previous March when he stepped forward and saved the much smaller Bear Stearns, which was in the same leaking boat as Lehman with far worse debt and no hope. Hank Paulson could have let them go, but he did not. He practically frog-marched JPMorgan Chase (JPM) into the arena and ordered it first to loan Bear Stearns a large amount of cash, and then five days later to buy the 86-year-old Wall Street bank.

When Paulson gave the lifeboat to Bear Stearns, it gave Lehman’s CEO Richard S. Fuld a deadly, false sense of confidence.

JPMorgan’s Behavior Change

Even today, the most clever Lehman minds tell me about a form of schizophrenia that JPMorgan displayed in its dealings with Bear Stearns and later Lehman. Bear was an investment bank almost half the size of Lehman. Yet the Fed and Treasury commissioned JPMorgan and its CEO Jamie Dimon to provide cash infusions to Bear the week before the bank’s bailout. JPMorgan became a new tool in Hank Paulson’s chest of creative innovations.

Fast-forward to September 2008—and oh how things had changed. Most senior traders and bankers I spoke to from Lehman were shocked at the new demeanor of JPMorgan, the split personality that Lehman was now experiencing like a bayonet in the back. JPMorgan was in a foul mood of sorts. Injecting aid, a cash infusion for Lehman? No, JPMorgan was now demanding weekly increases in the collateral that Lehman would have to put up in order to secure short-term loans to run its businesses. This suffocated the 158-year-old investment bank. It put her to sleep.

But what, I ask, would have happened if Paulson had simply stepped aside and let Bear Stearns collapse into bankruptcy back in March? I’ll tell you the first thing: Dick Fuld would probably have had a heart attack. “If he can let Bear Stearns go, he can let us go.”

And what would have been the natural progression? Fuld would have had no options. Mired in debt, holding billions and billions of unsellable assets, already entering its death throes, Lehman would then have had only one way out: to accept the offer about to be made by the Korea Development Bank, which when it materialized was around $23 a share. Fuld might have been way out of his depth in 21st century finance. But he was nobody’s fool, and he had a sense of self-preservation second to none. He would have accepted the Korean money in seven seconds, particularly since Paulson himself never stopped urging him to do so right until the men from the Far East withdrew as Labor Day arrived.

Lehman’s Leverage

A similar scenario played out during that turbulent September. John Thain, CEO of Lehman’s great rival, Merrill Lynch, knowing that Paulson was letting Lehman go, jumped willingly and enthusiastically into the arms of the near-bankrupt Bank of America (BAC).

In the end, the Treasury chief never forgave the Lehman chairman for ignoring that Korean offer, because in Hank’s opinion that probably would have saved the world. It was here that the constantly smoldering rift between the old Wall Street rivals, Paulson and Fuld, suddenly became a chasm. Because despite everything, Fuld had an almost obsessive desire to hold on to Lehman at all costs. With the Koreans on the sidelines, he began thrashing around, investing in major hedge funds, in small hedge funds, in overseas hedge funds. He even started to form hedge funds, and Hank Paulson was appalled. Here was a Wall Street bank leveraged almost 40 times its own value at the top of the market, plainly headed for oblivion, ignoring the Korean lifeline, silencing its best risk-takers, and spending its borrowed money like a drunken sailor. Hank Paulson never got over that.

Let me clarify that 40 times leverage is the equivalent of any gambler walking into a casino with just a $100 bill in his back pocket but playing on the tables with $4,000. It doesn’t take much to wipe out that old Benjamin.

Fuld and Paulson had dinner that spring of 2008. Fuld was characteristically rude to the Treasury boss. In turn Paulson was infuriated at this disrespect to his great office of state. Most of the distilled opinion suggests that it was that spring when Lehman’s fate was decided. But my own new opinion is that the hasty rescue of Bear Stearns was the fulcrum upon which the entire issue swung.

Hank Paulson and then New York Fed chief Timothy Geithner have argued that Bear Stearns had to be saved because systemic defense mechanisms protecting the markets had not been set up yet. Well, a fool could tell you the adequate mechanisms were not set up when Lehman failed, either. If Hank had let Bear go, the world would have looked very different.

Lawrence G. McDonald is the co-author of A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers and was a vice-president at Lehman from 2004 to 2008.

Complete article at:

www.businessweek.com

Book by Lawrence G. McDonald

==========

Why capitalism fails

The man who saw the meltdown coming had another troubling insight: it will happen again

By Stephen Mihm, Globe Correspondent
September 13, 2009

Since the global financial system started unraveling in dramatic fashion two years ago, distinguished economists have suffered a crisis of their own. Ivy League professors who had trumpeted the dawn of a new era of stability have scrambled to explain how, exactly, the worst financial crisis since the Great Depression had ambushed their entire profession.

Amid the hand-wringing and the self-flagellation, a few more cerebral commentators started to speak about the arrival of a “Minsky moment,” and a growing number of insiders began to warn of a coming “Minsky meltdown.”

“Minsky” was shorthand for Hyman Minsky, a hitherto obscure macroeconomist who died over a decade ago. Many economists had never heard of him when the crisis struck, and he remains a shadowy figure in the profession. But lately he has begun emerging as perhaps the most prescient big-picture thinker about what, exactly, we are going through. A contrarian amid the conformity of postwar America, an expert in the then-unfashionable subfields of finance and crisis, Minsky was one economist who saw what was coming. He predicted, decades ago, almost exactly the kind of meltdown that recently hammered the global economy.

In recent months Minsky’s star has only risen. Nobel Prize-winning economists talk about incorporating his insights, and copies of his books are back in print and selling well. He’s gone from being a nearly forgotten figure to a key player in the debate over how to fix the financial system.

But if Minsky was as right as he seems to have been, the news is not exactly encouraging. He believed in capitalism, but also believed it had almost a genetic weakness. Modern finance, he

argued, was far from the stabilizing force that mainstream economics portrayed: rather, it was a system that created the illusion of stability while simultaneously creating the conditions for an inevitable and dramatic collapse.

In other words, the one person who foresaw the crisis also believed that our whole financial system contains the seeds of its own destruction. “Instability,” he wrote, “is an inherent and inescapable flaw of capitalism.”

Minsky’s vision might have been dark, but he was not a fatalist; he believed it was possible to craft policies that could blunt the collateral damage caused by financial crises. But with a growing number of economists eager to declare the recession over, and the crisis itself apparently behind us, these policies may prove as discomforting as the theories that prompted them in the first place. Indeed, as economists re-embrace Minsky’s prophetic insights, it is far from clear that they’re ready to reckon with the full implications of what he saw.

In an ideal world, a profession dedicated to the study of capitalism would be as freewheeling and innovative as its ostensible subject. But economics has often been subject to powerful orthodoxies, and never more so than when Minsky arrived on the scene.

That orthodoxy, born in the years after World War II, was known as the neoclassical synthesis. The older belief in a self-regulating, self-stabilizing free market had selectively absorbed a few insights from John Maynard Keynes, the great economist of the 1930s who wrote extensively of the ways that capitalism might fail to maintain full employment. Most economists still believed that free-market capitalism was a fundamentally stable basis for an economy, though thanks to Keynes, some now acknowledged that government might under certain circumstances play a role in keeping the economy – and employment – on an even keel.

Economists like Paul Samuelson became the public face of the new establishment; he and others at a handful of top universities became deeply influential in Washington. In theory, Minsky could have been an academic star in this new establishment: Like Samuelson, he earned his doctorate in economics at Harvard University, where he studied with legendary Austrian economist Joseph Schumpeter, as well as future Nobel laureate Wassily Leontief.

But Minsky was cut from different cloth than many of the other big names. The descendent of immigrants from Minsk, in modern-day Belarus, Minsky was a red-diaper baby, the son of Menshevik socialists. While most economists spent the 1950s and 1960s toiling over mathematical models, Minsky pursued research on poverty, hardly the hottest subfield of economics. With long, wild, white hair, Minsky was closer to the counterculture than to mainstream economics. He was, recalls the economist L. Randall Wray, a former student, a “character.”

So while his colleagues from graduate school went on to win Nobel prizes and rise to the top of academia, Minsky languished. He drifted from Brown to Berkeley and eventually to Washington University. Indeed, many economists weren’t even aware of his work. One assessment of Minsky published in 1997 simply noted that his “work has not had a major influence in the macroeconomic discussions of the last thirty years.”

Yet he was busy. In addition to poverty, Minsky began to delve into the field of finance, which despite its seeming importance had no place in the theories formulated by Samuelson and others. He also began to ask a simple, if disturbing question: “Can ‘it’ happen again?” – where “it” was, like Harry Potter’s nemesis Voldemort, the thing that could not be named: the Great Depression.

In his writings, Minsky looked to his intellectual hero, Keynes, arguably the greatest economist of the 20th century. But where most economists drew a single, simplistic lesson from Keynes – that government could step in and micromanage the economy, smooth out the business cycle, and keep things on an even keel – Minsky had no interest in what he and a handful of other dissident economists came to call “bastard Keynesianism.”

Instead, Minsky drew his own, far darker, lessons from Keynes’s landmark writings, which dealt not only with the problem of unemployment, but with money and banking. Although Keynes had never stated this explicitly, Minsky argued that Keynes’s collective work amounted to a powerful argument that capitalism was by its very nature unstable and prone to collapse. Far from trending toward some magical state of equilibrium, capitalism would inevitably do the opposite. It would lurch over a cliff.

This insight bore the stamp of his advisor Joseph Schumpeter, the noted Austrian economist now famous for documenting capitalism’s ceaseless process of “creative destruction.” But Minsky spent more time thinking about destruction than creation. In doing so, he formulated an intriguing theory: not only was capitalism prone to collapse, he argued, it was precisely its periods of economic stability that would set the stage for monumental crises.

Minsky called his idea the “Financial Instability Hypothesis.” In the wake of a depression, he noted, financial institutions are extraordinarily conservative, as are businesses. With the borrowers and the lenders who fuel the economy all steering clear of high-risk deals, things go smoothly: loans are almost always paid on time, businesses generally succeed, and everyone does well. That success, however, inevitably encourages borrowers and lenders to take on more risk in the reasonable hope of making more money. As Minsky observed, “Success breeds a disregard of the possibility of failure.”

As people forget that failure is a possibility, a “euphoric economy” eventually develops, fueled by the rise of far riskier borrowers – what he called speculative borrowers, those whose income would cover interest payments but not the principal; and those he called “Ponzi borrowers,” those whose income could cover neither, and could only pay their bills by borrowing still further. As these latter categories grew, the overall economy would shift from a conservative but profitable environment to a much more freewheeling system dominated by players whose survival depended not on sound business plans, but on borrowed money and freely available credit.

Once that kind of economy had developed, any panic could wreck the market. The failure of a single firm, for example, or the revelation of a staggering fraud could trigger fear and a sudden, economy-wide attempt to shed debt. This watershed moment – what was later dubbed the “Minsky moment” – would create an environment deeply inhospitable to all borrowers. The speculators and Ponzi borrowers would collapse first, as they lost access to the credit they needed to survive. Even the more stable players might find themselves unable to pay their debt without selling off assets; their forced sales would send asset prices spiraling downward, and inevitably, the entire rickety financial edifice would start to collapse. Businesses would falter, and the crisis would spill over to the “real” economy that depended on the now-collapsing financial system.

From the 1960s onward, Minsky elaborated on this hypothesis. At the time he believed that this shift was already underway: postwar stability, financial innovation, and the receding memory of the Great Depression were gradually setting the stage for a crisis of epic proportions. Most of what he had to say fell on deaf ears. The 1960s were an era of solid growth, and although the economic stagnation of the 1970s was a blow to mainstream neo-Keynesian economics, it did not send policymakers scurrying to Minsky. Instead, a new free market fundamentalism took root: government was the problem, not the solution.

Moreover, the new dogma coincided with a remarkable era of stability. The period from the late 1980s onward has been dubbed the “Great Moderation,” a time of shallow recessions and great resilience among most major industrial economies. Things had never been more stable. The likelihood that “it” could happen again now seemed laughable.

Yet throughout this period, the financial system – not the economy, but finance as an industry – was growing by leaps and bounds. Minsky spent the last years of his life, in the early 1990s, warning of the dangers of securitization and other forms of financial innovation, but few economists listened. Nor did they pay attention to consumers’ and companies’ growing dependence on debt, and the growing use of leverage within the financial system.

By the end of the 20th century, the financial system that Minsky had warned about had materialized, complete with speculative borrowers, Ponzi borrowers, and precious few of the conservative borrowers who were the bedrock of a truly stable economy. Over decades, we really had forgotten the meaning of risk. When storied financial firms started to fall, sending shockwaves through the “real” economy, his predictions started to look a lot like a road map.

“This wasn’t a Minsky moment,” explains Randall Wray. “It was a Minsky half-century.”

Minsky is now all the rage. A year ago, an influential Financial Times columnist confided to readers that rereading Minsky’s 1986 “masterpiece” – “Stabilizing an Unstable Economy” – “helped clear my mind on this crisis.” Others joined the chorus. Earlier this year, two economic heavyweights – Paul Krugman and Brad DeLong – both tipped their hats to him in public forums. Indeed, the Nobel Prize-winning Krugman titled one of the Robbins lectures at the London School of Economics “The Night They Re-read Minsky.”

Today most economists, it’s safe to say, are probably reading Minsky for the first time, trying to fit his unconventional insights into the theoretical scaffolding of their profession. If Minsky were alive today, he would no doubt applaud this belated acknowledgment, even if it has come at a terrible cost. As he once wryly observed, “There is nothing wrong with macroeconomics that another depression [won’t] cure.”

But does Minsky’s work offer us any practical help? If capitalism is inherently self-destructive and unstable – never mind that it produces inequality and unemployment, as Keynes had observed – now what?

After spending his life warning of the perils of the complacency that comes with stability – and having it fall on deaf ears – Minsky was understandably pessimistic about the ability to short-circuit the tragic cycle of boom and bust. But he did believe that much could be done to ameliorate the damage.

To prevent the Minsky moment from becoming a national calamity, part of his solution (which was shared with other economists) was to have the Federal Reserve – what he liked to call the “Big Bank” – step into the breach and act as a lender of last resort to firms under siege. By throwing lines of liquidity to foundering firms, the Federal Reserve could break the cycle and stabilize the financial system. It failed to do so during the Great Depression, when it stood by and let a banking crisis spiral out of control. This time, under the leadership of Ben Bernanke – like Minsky, a scholar of the Depression – it took a very different approach, becoming a lender of last resort to everything from hedge funds to investment banks to money market funds.

Minsky’s other solution, however, was considerably more radical and less palatable politically. The preferred mainstream tactic for pulling the economy out of a crisis was – and is – based on the Keynesian notion of “priming the pump” by sending money that will employ lots of high-skilled, unionized labor – by building a new high-speed train line, for example.

Minsky, however, argued for a “bubble-up” approach, sending money to the poor and unskilled first. The government – or what he liked to call “Big Government” – should become the “employer of last resort,” he said, offering a job to anyone who wanted one at a set minimum wage. It would be paid to workers who would supply child care, clean streets, and provide services that would give taxpayers a visible return on their dollars. In being available to everyone, it would be even more ambitious than the New Deal, sharply reducing the welfare rolls by guaranteeing a job for anyone who was able to work. Such a program would not only help the poor and unskilled, he believed, but would put a floor beneath everyone else’s wages too, preventing salaries of more skilled workers from falling too precipitously, and sending benefits up the socioeconomic ladder.

While economists may be acknowledging some of Minsky’s points on financial instability, it’s safe to say that even liberal policymakers are still a long way from thinking about such an expanded role for the American government. If nothing else, an expensive full-employment program would veer far too close to socialism for the comfort of politicians. For his part, Wray thinks that the critics are apt to misunderstand Minsky. “He saw these ideas as perfectly consistent with capitalism,” says Wray. “They would make capitalism better.”

But not perfect. Indeed, if there’s anything to be drawn from Minsky’s collected work, it’s that perfection, like stability and equilibrium, are mirages. Minsky did not share his profession’s quaint belief that everything could be reduced to a tidy model, or a pat theory. His was a kind of existential economics: capitalism, like life itself, is difficult, even tragic. “There is no simple answer to the problems of our capitalism,” wrote Minsky. “There is no solution that can be transformed into a catchy phrase and carried on banners.”

It’s a sentiment that may limit the extent to which Minsky becomes part of any new orthodoxy. But that’s probably how he would have preferred it, believes liberal economist James Galbraith. “I think he would resist being domesticated,” says Galbraith. “He spent his career in professional isolation.”

Stephen Mihm is a history professor at the University of Georgia and author of “A Nation of Counterfeiters” (Harvard, 2007).

Complete article at:

www.boston.com

Book by Dr. Stephen Mihm

==========

Real Bank Regulation

September 16, 2009

NOMI PRINS, via Celeste Balducci, celeste@monteiroandco.com, http://www.nomiprins.com

Prins, a former investment banker turned journalist, is author of the just-released “It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street.”

Her latest article is titled “Obama Banking Too Much on Banks,” which states: “Under both the Bush and Obama administrations, the government, from the Federal Reserve to the Treasury Department, has flushed the banking systems and other components of the financial markets with $17.5 trillion worth of loans, guarantees, and other forms of support. …

“Simply funding the banking system without reforming it is an expensive and dangerous game. Obama is capable of truly fixing things — by dividing up the Wall Street mega-banks with a new Glass Steagall Act, thereby enabling the success of more extensive regulatory reforms. Or, he could introduce a set of cosmetic changes that allow banks to keep doing what they did before last year’s crisis and that put us on the path for the next one.”

From: Institute for Public Accuracy

Books by Nomi Prins

==========

SEC Announces New Division of Risk, Strategy, and Financial Innovation News release: “Securities and Exchange Commission

Chairman Mary L. Schapiro today announced that University of Texas School of Law Professor Henry T. C. Hu has been named Director of the newly-established Division of Risk, Strategy, and Financial Innovation. The new division combines the Office of Economic Analysis, the Office of Risk Assessment, and other functions to provide the Commission with sophisticated analysis that integrates economic, financial, and legal disciplines. The division’s responsibilities cover three broad areas: risk and economic analysis; strategic research; and financial innovation.”

Press Release at : www.sec.gov

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Liars in America – Facts don’t matter in the alternate Republican reality where Joe Wilson, Sarah Palin and the birthers are heroes

Sahil Kapur guardian.co.uk,
Thursday 17 September 2009

“Ignorance is not merely the lack of knowledge, but self-destructive turning away from truth in all areas of life. Persons develop a taste for ignorance, the predisposition to embrace erroneous beliefs based on presumption or mere authority. The ignorant person believes he knows what he actually doesn’t know. He becomes delusional. He is deranged.” So declared Plato, unwittingly describing the face of 21st-century American conservatism in the age of Obama. Today, facts and fiction appear more interchangeable than ever before in America’s public discourse.

In the most recent example: Republican congressman Joe Wilson, after being officially censured for interrupting and yelling “You lie!” at Obama during last week’s healthcare address to Congress, took it as badge of honour. He pledged on his Twitter feed on Tuesday that “Despite Congress’ actions today, I will not back down from speaking the truth. Please stand with me,” before asking people to donate to his 2010 campaign.

Apparently it doesn’t matter to Wilson that his heckling of the president, disgraceful as it was in its decorum, was based on pure fiction. Obama has never advocated insuring illegal immigrants. In fact, his bill explicitly bans it. Regardless, Wilson continues to flaunt his assertion unapologetically – and it has made him a hero among the radical right.

That’s what’s most disturbing about this ordeal: It shows that Americans can no longer agree on basic realities. Certainly everyone’s entitled to their own opinion, but not everyone’s entitled to their own facts. We can’t have a serious debate about policy in this country when one group keeps inventing its own version of the truth.

It doesn’t matter to Sarah Palin that her claim about healthcare “death panels” was a flat-out lie. She continues to tout it after being repeatedly taken to task – including by the Associated Press and the very fair FactCheck.org. With no admission of her falsehood, millions of people still believe it, and the national dialogue remains tainted.

It doesn’t matter to Michael Steele, the chairman of the Republican party, and his cohorts that healthcare reform will only create more choice and competition in the form of a public insurance option. They continue to claim it’ll lead to a “government takeover” of the system and more “rationing” of care. Their insistence on these erroneous claims fuelled the teabagging and town hall madness this summer.

It doesn’t matter to the birthers that Obama’s official birth certificate from Honolulu, Hawaii has been thoroughly examined and verified. Their virulent anger toward this alleged Muslim socialist from Kenya remains immutable. Even more stunning is that nearly two in three mainstream Republicans harbour doubts as to whether he’s a natural-born US citizen. There couldn’t be a clearer sign that some people simply refuse to accept reality.

It’s one thing to cynically lie for political purposes and later take the punch if you get caught – another to cling to the lie after it has been exposed. This is a major abdication of responsibility for public figures, and it serves only to feed the paranoia of a generation of troubled souls unable to come to grips with a country changing before their eyes – demographically and ideologically. While previously the exception, this is quickly becoming the norm in today’s Republican party.

Thus we live in an era where, in the depths of ignorance, facts are no longer treated as facts. Outlandish notions are portrayed in the media as legitimate points of view. Debates over credible but differing opinions are being replaced by shouting matches over easily verifiable facts. The truth can so easily be parsed or even snubbed for political gain, and far from facing repercussions, the perpetrators are often rewarded with widespread press coverage and devoted followings.

It’s true that this mentality predates Obama. The usual suspects have snubbed science for decades – evolution is merely a theory, and global warming is a leftwing conspiracy. There’s a reason scientists and intellectuals, in their affinity for truth, are rapidly deserting today’s Republican party and conservative movement. But, the sheer volume and depth of the craziness appears to have escalated to unprecedented levels.

Thomas Jefferson famously said: “If a nation expects to be ignorant and free, in a state of civilisation, it expects what never was and never will be.” The fabric of American civilisation now faces one of its its toughest tests to date. Only time will tell whether it can it re-emerge from the darkness of ignorance.

Complete article at:

www.guardian.co.uk

==========

GLENN BECK GIVES TUTORIAL ON HOW TO ENGAGE IN CIVIL DIALOGUE, SAYS YOU CAN’T MAKE WILD, BASELESS ACCUSATIONS

By Tana Ganeva, AlterNet

Beck argues that you can’t just go around accusing people of being racist. Recently Beck accused President Obama of being a racist with a deepseated hatred for whites.

Complete article at:

www.alternet.org

Pat Bagley: … core of the utah gop
(www.cagle.com)

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Conservatives express outrage about charges that their attacks on Obama are racist

Conservatives in the media have recently criticized congressional Democrats, Jimmy Carter, Maureen Dowd, and others for suggesting that attacks on President Obama are racially motivated, saying, for example, that it’s a “disgusting smear,” “a sign of desperation,” and ” despicable tactics.” However, conservative media figures — including some who are now decrying the accusations — have themselves used charges of racism when discussing Obama and his policies.

Read More

mediamatters.org

(click here to view)

Tim Eagan The Press Democrat Sep 17, 2009 EditorialCartoonists.com

Cartoon du Jour – By Khalil: … I mean red?
(www.bendib.com)

==========

INSIDE PAT TILLMAN’S LIFE, AND THE BUSH ADMINISTRATION’S COVER-UP OF HIS DEATH

By Sarah Seltzer, AlterNet

Journalist Jon Krakauer’s striking new book on the story o the events surrounding Pat Tillman’s death in Afghanistan
covers the emotional depths of war and government cover-up.

Complete article at:

www.alternet.org

Where Men Win Glory: The Odyssey of Pat Tillman by Jon Krakauer

==========

And now for the important news ….

By Argus Hamilton

Michael Jordan made the crowd uncomfortable at his NBA Hall of Fame acceptance speech on Friday. He stood onstage and lashed out at anyone who ever doubted him or insulted him. After the speech, Congressman Joe Wilson called him up and apologized.

http://www.JewishWorldReview.com

==========

three thousand words

(click here to view)

David Cohen Freelance Sep 17, 2009 EditorialCartoonists.com

Tom Tomorrow: Ye olde fund of ensurance
(www.salon.com)

Tom the Dancing Bug -Ruben Bolling: Hitler’s Diabolical Secret Plan
(politicalirony.com)

Misreading the Iranian Situation from STRATFOR

By George Friedman
September 15, 2009

The Iranians have now agreed to talks with the P-5+1, the five permanent members of the U.N. Security Council (the United States, the United Kingdom, France, Russia and China) plus Germany. These six countries decided in late April to enter into negotiations with Iran over the suspected Iranian nuclear weapons program by Sept. 24, the date of the next U.N. General Assembly meeting. If Iran refused to engage in negotiations by that date, the Western powers in the P-5+1 made clear that they would seriously consider imposing much tougher sanctions on Iran than those that were currently in place. The term “crippling” was mentioned several times.

Obviously, negotiations are not to begin prior to the U.N. General Assembly meeting as previously had been stipulated. The talks are now expected to begin Oct. 1, a week later. This gives the Iranians their first (symbolic) victory: They have defied the P-5+1 on the demand that talks be under way by the time the General Assembly meets. Inevitably, the Iranians would delay, and the P-5+1 would not make a big deal of it.

Talks About Talks and the Sanctions Challenge
Now, we get down to the heart of the matter: The Iranians have officially indicated that they are prepared to discuss a range of strategic and economic issues but are not prepared to discuss the nuclear program — which, of course, is the reason for the talks in the first place. On Sept. 14, they hinted that they might consider talking about the nuclear program if progress were made on other issues, but made no guarantees.

So far, the Iranians are playing their traditional hand. They are making the question of whether there would be talks about nuclear weapons the center of diplomacy. Where the West wanted a commitment to end uranium enrichment, the Iranians are trying to shift the discussions to whether they will talk at all. After spending many rounds of discussions on this subject, they expect everyone to go away exhausted. If pressure is coming down on them, they will agree to discussions, acting as if the mere act of talking represents a massive concession. The members of the P-5+1 that don’t want a confrontation with Iran will use Tehran’s agreement merely to talk (absent any guarantees of an outcome) to get themselves off the hook on which they found themselves back in April — namely, of having to impose sanctions if the Iranians don’t change their position on their nuclear program.

Russia, one of the main members of the P-5+1, already has made clear it opposes sanctions under any circumstances. The Russians have no intention of helping solve the American problem with Iran while the United States maintains its stance on NATO expansion and bilateral relations with Ukraine and Georgia. Russia regards the latter two countries as falling within the Russian sphere of influence, a place where the United States has no business meddling.

To this end, Russia is pleased to do anything that keeps the United States bogged down in the Middle East, since this prevents Washington from deploying forces in Poland, the Czech Republic, the Baltics, Georgia or Ukraine. A conflict with Iran not only would bog down the United States even further, it would divide Europe and drive the former Soviet Union and Central Europe into viewing Russia as a source of aid and stability. The Russians thus see Iran as a major thorn in Washington’s side. Obtaining Moscow’s cooperation on removing the thorn would require major U.S. concessions — beyond merely bringing a plastic “reset” button to Moscow. At this point, the Russians have no intention of helping remove the thorn. They like it right where it is.

In discussing crippling sanctions, the sole obvious move would be blocking gasoline exports to Iran. Iran must import 40 percent of its gasoline needs. The United States and others have discussed a plan for preventing major energy companies, shippers and insurers from supplying that gasoline. The subject, of course, becomes moot if Russia (and China) refuses to participate or blocks sanctions. Moscow and Beijing can deliver all the gasoline Tehran wants. The Russians could even deliver gasoline by rail in the event that Iranian ports are blocked. Therefore, if the Russians aren’t participating, the impact of gasoline sanctions is severely diminished, something the Iranians know well.

Tehran and Moscow therefore are of the opinion that this round of threats will end where other rounds ended. The United States, the United Kingdom and France will be on one side; Russia and China will be on the other; and Germany will vacillate, not wanting to be caught on the wrong side of the Russians. In either case, whatever sanctions are announced would lose their punch, and life would go on as before.

There is, however, a dimension that indicates that this crisis might take a different course.

The Israeli Dimension

After the last round of meetings between Israeli Prime Minister Benjamin Netanyahu and U.S. President Barack Obama, the Israelis announced that the United States had agreed that in the event of a failure in negotiations, the United States would demand — and get — crippling sanctions against Iran, code for a gasoline cutoff. In return, the Israelis indicated that any plans for a unilateral Israeli strike on Iran’s nuclear facilities would be put off. The Israelis specifically said that the Americans had agreed on the September U.N. talks as the hard deadline for a decision on — and implementation of — sanctions.

Our view always has been that the Iranians are far from acquiring nuclear weapons. This is, we believe, the Israeli point of view. But the Israeli point of view also is that, however distant, the Iranian acquisition of nuclear weapons represents a mortal danger to Israel — and that, therefore, Israel would have to use military force if diplomacy and sanctions don’t work.

For Israel, the Obama guarantee on sanctions represented the best chance at a nonmilitary settlement. If it fails, it is not clear what could possibly work. Given that Supreme Leader Ayatollah Ali Khamenei has gotten his regime back in line, that Iranian President Mahmoud Ahmadinejad apparently has emerged from the recent Iranian election crisis with expanded clout over Iran’s foreign policy, and that the Iranian nuclear program appears to be popular among Iranian nationalists (of whom there are many), there seems no internal impediment to the program. And given the current state of U.S.-Russian relations and that Washington is unlikely to yield Moscow hegemony in the former Soviet Union in return for help on Iran, a crippling sanctions regime is unlikely.

Obama’s assurances notwithstanding, there accordingly is no evidence of any force or process that would cause the Iranians to change their minds about their nuclear program. With that, the advantage to Israel of delaying a military strike evaporates.

And the question of the quality of intelligence must always be taken into account: The Iranians may be closer to a weapon than is believed. The value of risking delays disappears if nothing is likely to happen in the intervening period that would make a strike unnecessary.

Moreover, the Israelis have Obama in a box. Obama promised them that if Israel did not take a military route, he would deliver them crippling sanctions against Iran. Why Obama made this promise — and he has never denied the Israeli claim that he did — is not fully clear. It did buy him some time, and perhaps he felt he could manage the Russians better than he has. Whatever Obama’s motivations, having failed to deliver, the Israelis can say that they have cooperated with the United States fully, so now they are free by the terms of their understanding with Washington to carry out strikes — something that would necessarily involve the United States.

The calm assumptions in major capitals that this is merely another round in interminable talks with Iran on its weapons revolves around the belief that the Israelis are locked into place by the Americans. From where we sit, the Israelis have more room to maneuver now than they had in the past, or than they might have in the future. If that’s true, then the current crisis is more dangerous than it appears.

Netanyahu appears to have made a secret trip to Moscow (though it didn’t stay secret very long) to meet with the Russian leadership. Based on our own intelligence and this analysis, it is reasonable to assume that Netanyahu was trying to drive home to the Russians the seriousness of the situation and Israel’s intent. Russian-Israeli relations have deteriorated on a number of issues, particularly over Israeli military and intelligence aid to Ukraine and Georgia. Undoubtedly, the Russians demanded that Israel abandon this aid.

As mentioned, the chances of the Russians imposing effective sanctions on Iran are nil. This would get them nothing. And if not cooperating on sanctions triggers an Israeli airstrike, so much the better. This would degrade and potentially even effectively eliminate Iran’s nuclear capability, which in the final analysis is not in Russia’s interest. It would further enrage the Islamic world at Israel. It would put the United States in the even more difficult position of having to support Israel in the face of this hostility. And from the Russian point of view, it would all come for free. (That said, in such a scenario the Russians would lose much of the leverage the Iran card offers Moscow in negotiations with the United States.)

Ramifications of an Israeli Strike

An Israeli airstrike would involve the United States in two ways. First, it would have to pass through Iraqi airspace controlled by the United States, at which point no one would believe that the Americans weren’t complicit. Second, the likely Iranian response to an Israeli airstrike would be to mine the Strait of Hormuz and other key points in the Persian Gulf — something the Iranians have said they would do, and something they have the ability to do.

Some have pointed out that the Iranians would be hurting themselves as much as the West, as this would cripple their energy exports. And it must be remembered that 40 percent of globally traded oil exports pass through Hormuz. The effect of mining the Persian Gulf would be devastating to oil prices and to the global economy at a time when the global economy doesn’t need more grief. But the economic pain Iran would experience from such a move could prove tolerable relative to the pain that would be experienced by the world’s major energy importers. Meanwhile, the Russians would be free to export oil at extraordinarily high prices.

Given the foregoing, the United States would immediately get involved in such a conflict by engaging the Iranian navy, which in this case would consist of small boats with outboard motors dumping mines overboard. Such a conflict would be asymmetric warfare, naval style. Indeed, given that the Iranians would rapidly respond — and that the best way to stop them would be to destroy their vessels no matter how small before they have deployed — the only rational military process would be to strike Iranian boats and ships prior to an Israeli airstrike. Since Israel doesn’t have the ability to do that, the United States would be involved in any such conflict from the beginning. Given that, the United States might as well do the attacking. This would increase the probability of success dramatically, and paradoxically would dampen the regional reaction compared to a unilateral Israeli strike.

When we speak to people in Tehran, Washington and Moscow, we get the sense that they are unaware that the current situation might spin out of control. In Moscow, the scenario is dismissed because the general view is that Obama is weak and inexperienced and is frightened of military confrontation; the assumption is that he will find a way to bring the Israelis under control.

It isn’t clear that Obama can do that, however. The Israelis don’t trust him, and Iran is a core issue for them. The more Obama presses them on settlements the more they are convinced that Washington no longer cares about Israeli interests. And that means they are on their own, but free to act.

It should also be remembered that Obama reads intelligence reports from Moscow, Tehran and Berlin. He knows the consensus about him among foreign leaders, who don’t hold him in high regard. That consensus causes foreign leaders to take risks; it also causes Obama to have an interest in demonstrating that they have misread him.

We are reminded of the 1962 Cuban Missile Crisis only in this sense: We get the sense that everyone is misreading everyone else. In the run-up to the Cuban Missile Crisis, the Americans didn’t believe the Soviets would take the risks they did and the Soviets didn’t believe the Americans would react as they did. In this case, the Iranians believe the United States will play its old game and control the Israelis. Washington doesn’t really understand that Netanyahu may see this as the decisive moment. And the Russians believe Netanyahu will be controlled by an Obama afraid of an even broader conflict than he already has on his hands.

The current situation is not as dangerous as the Cuban Missile Crisis was, but it has this in common: Everyone thinks we are on a known roadmap, when in reality, one of the players — Israel — has the ability and interest to redraw the roadmap. Netanyahu has been signaling in many ways that he intends to do just this. Everyone seems to believe he won’t. We aren’t so sure.

If you repost this article on a website, include a link to www.STRATFOR.com www.STRATFOR.com

Book by George Friedman

==========

CREW Names the 15 Most Corrupt Members of Congress

Wednesday, September 16, 2009

Yesterday, CREW released its fifth annual report on the most corrupt members of Congress.

CREW’s Most Corrupt Members of Congress provides a detailed look at the unethical and sometimes illegal activities of 15 congressmen and women who have most egregiously betrayed the public’s trust.

New to this year’s list are Senators Roland Burris and John Ensign, and Representatives Nathan Deal, Jesse Jackson, Jr. and Pete Visclosky. After a two year absence, Rep. Maxine Waters has reappeared in the study for unethical activities unrelated to the conduct that landed her on the list in the past.

A detailed list of those on the list can be found on the report’s website www.CREWsMostCorrupt.org, which offers short summaries of each member’s transgressions as well as the full-length profiles and accompanying exhibits.

The members of Congress profiled in CREW’s Most Corrupt report have betrayed those who voted them into office. This report holds them accountable for their bad choices.

Click here to visit CREWsMostCorrupt.org. www.crewsmostcorrupt.org

Click here to read CREW’s full report (PDF). www.crewsmostcorrupt.org

From: Citizens for Responsibility and Ethics in Washington citizensforethics.org

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Glenn Beck’s Demagoguery, Right Wing Extremism, and Racism –

by Stephen Lendman

September 16, 2009

At a time of 24-hour news and a proliferation of television and radio talk shows featuring hatemongers and demagogues like Rush Limbaugh, Bill O’Reilly, Sean Hannity and Lou Dobbs, Glenn Beck may stand out as the most unhinged and extremist of all as evidenced by his jihad against anyone to the left of his views, disadvantaged minorities, Muslims, Latino immigrants, and progressive change in some of his most outlandish comments, including:

– calling Barack Obama a “racist (who) has a deep-seated hatred for white people or the white culture; I don’t know what it is….This guy is, I believe, a racist;”

– calling Van Jones “an avowed, radical, revolutionary communist,” then saying “Jones is the tip of the iceberg” as part of his over-the-top campaign against anyone less extremist than himself;

– stating “The most used phrase in my administration if I were to be President would be ‘What the hell do you mean we’re out of missiles;’ ”

– saying “We need to be the first ones in the recruitment office lining up to shoot the bad Muslims in the head….In 10 years, Muslims and Arabs will be looking through a razor wire fence at the West;”

– telling Muslim Congressman Keith Ellison to “prove to me that you are not working with our enemies;”

– advocating disposing of Guantanamo detainees by shooting them in the head;

– accusing Al Gore of creating a new “Hitler youth” by promoting environmental awareness, and called for kicking California out of the union;

– in 2003, telling listeners he was praying for a gruesome death for Democrat presidential candidate Dennis Kucinich, and in 2005 saying he fantasized about strangling filmmaker Michael Moore;

– characterizing Obama’s new regulatory czar, Cass Sunstein, as a crazed animal rights activist who believes that rats matter more than people; and

– in September 2005, expressing open “hate” toward Katrina victims, calling them “scumbags” for not waiting patiently for emergency aid at a time their lives were devastated, and the Bush administration was forcibly removing them to distant locations, then preventing them from returning so predatory developers could exploit their neighborhoods for profit.

In May 2008, a Media Matters Action Network report titled, “Fear & Loathing in Prime Time: Immigration Myths and Cable News” highlighted undocumented Latino immigrant hatemongering by Lou Dobbs, Bill O’Reilly, and Glenn Beck, each making outlandish claims, including:

– an alleged connection between undocumented Latinos and crime;

– how they exploit social services and don’t pay taxes;

– the “reconquista” myth about a supposed Mexican plot to take over the US Southwest; and

– an epidemic of Latino voter fraud.

According to Beck, “It’s time to wake up in this country. We are dealing with an illegal alien (read Latino) crime wave, and drug smuggling is just the beginning.” He opened a special 2008 “Border Crisis” program saying: “America’s border crisis. Rape, drugs, kidnapping, even murder. It is beginning to look a lot more like a border war….Every single illegal immigrant is guilty of a crime, every single one….Every undocumented worker (read Latino) is an illegal immigrant, a criminal and a drain on our dwindling resources.”

He added:

– “I’ve got a quick message for illegal aliens if you happen to be watching; you better start packing your bags; and to the politicians in Washington who are soft on illegal immigration, start packing up your office, because when the terrorists strike, which they will, and when we find out that they’re here illegally from some other country, we will be telling all of you to get the hell out;”

– earlier he said “I told you about the five-part plan that I believe may lead to the end of the West as we know it; I called it my ‘Perfect Storm;’ one of the elements….is illegal immigration; it is still a great way for terrorists to come here and mess with us; but even if that doesn’t happen….at the very least (they’re) attacking our culture, and our way of life; they are not melting into our melting pot; they’re here for the cash;” and

– “I also know our country is on fire, and the fuel is illegal immigration; they (threaten) our national security;” they come for “three reasons: one, they’re terrorists; two, they’re escaping the law; or three, they’re hungry (because) they can’t make a living in their own dirtbag country.”

This is what passes for American mainstream “journalism” that’s in no worse form than from Glenn Beck – on Fox News, the radio outlets that give him a platform, and the sponsors that make his kind of programming possible. More on them below.

Joe McCarthy’s Earlier Jihad Against the Left

In the 1950s, Joe McCarthy’s witch-hunts against alleged communists, those on the left, and Democrat administration and other “subversives” included Secretary of State Dean Acheson whom he called “a pompous diplomat in striped pants,” General George Marshall when he was Secretary of State for being “soft on communism” and being “a man steeped in falsehood,” and many others on his so-called “blacklist.”

In 1950, with no proof, he said he had a list of 205 known communists in the State Department, later reduced the number to 57, but said they were passing secret information to the Soviets. He claimed:

“The reason why we find ourselves in a position of impotency is not because the enemy has sent men to invade our shores, but rather because of the traitorous actions of those who had all the benefits that the wealthiest nation on earth has had to offer – the finest homes, the finest college educations, and the finest jobs in Government (and the private sector) we can give.”

He characterized enemies as “card-carrying communists.” Others as “loyalty risks” or being “soft on communism.” For political gain, he vilified patriotic Americans, created years of hysteria, targeted anti-American books in libraries and got them removed, then overstepped enough to be hung on his own petard with publications like the Louisville Courier-Journal reporting that:

“In this long, degrading travesty of the democratic process, McCarthy has shown himself to be evil and unmatched in malice.” On December 2, 1954 the Senate censured him and took away his power base. Later ill with cirrhosis of the liver from years of abusive alcoholism, he died a broken man on May 2, 1957.

Today, the term “McCarthyism” is synonymous with baseless malicious slander, unscrupulous fearmongering, vilifying the innocent, accusing them of disloyalty, and calling them terrorists, Islamofascists, illegal immigrants, and unpatriotic for supporting progressive change and ideas to the left of right wing views.

McCarthysim Redux Through the Right Wing Media

Nightly on Fox News, Glenn Beck delivers some of the worst of it to his estimated 2.3 million faithful and millions more on The Glenn Beck Program, a nationally syndicated talk-radio show aired by Premiere Radio Networks (a Clear Channel Communications subsidiary) throughout the country on over 300 stations, according to a Premiere Speakers Bureau promo about him stating that his program “is presently the third highest-rated national radio talk show among adults ages 25 – 54.”

It said that he debuted on CNN’s Headline News in May 2006 “with his self-styled topical talk show and quickly soared in popularity.” CNN at the time called it “an unconventional look at the news of the day featuring (Beck’s) often amusing perspective on the top stories from world events and politics to pop culture and everyday hassles.”

In early January 2007, he also joined ABC News’ Good Morning America as a regular contributor with its senior executive producer, Jim Murphy, saying:

“Glenn is a leading commentator with a distinct voice. At times, he is the perfect guest for many of the talk topics we cover on morning news programs.”

In 2008, Beck won the Marconi Radio Award for Network Syndicated Personality of the Year from the National Association of Broadcasters. Previous winners included Rush Limbaugh and Fox News’ Sean Hannity. After his award, Premiere Radio Networks president, Charlie Rahilly, said:

“Glenn’s conversation with millions of Americans weekly on The Glenn Beck Program….makes him a familiar voice in our culture. We salute his work, creativity, and humor, and congratulate him on his genuine recognition by our industry.”

He regularly features guests like Karl Rove, John McCain, Sarah Palin, Rudy Giuliani, Rick Santorum, Rush Limbaugh, and an array of the most extremist Republican members of Congress, others from right wing think tanks, and former Bush administration officials.

His syndicator, Premiere Radio, is a subsidiary of Clear Channel Communications, the world’s largest radio broadcaster, concert promoter, and billboard advertising firm. It’s also a major player in US television and Spanish language broadcasting, and very much to the right of center in ideology. As one of America’s most powerful media companies, it’s played a leading role in destroying media diversity by airing the same content on many dozens of its stations simultaneously, suppressing everything not supportive of its views.

In 2002, Clear Channel attracted the attention of Senator Russ Feingold and several other members of Congress over its anti-competitive behavior and alleged shady business practices. In 2009, the company remains a powerful force, ranking ninth among the top 20 US media companies ahead of The New York Times Co., the Washington Post Co., Hearst Corp., and McGraw-Hill.

More on Beck’s Background

He’s written three New York Times-listed bestsellers, publishes the entertainment Fusion Magazine, and tours the country twice yearly in his own one-man show to promote himself as a national institution.

Instead of condemning his extremism, on December 4, 2006, The New York Times described him as a “tearful rising star” in calling him “brash (and) opinionated (with an) unfiltered approach (in) saying what others are feeling but are afraid to say.” Writers Brian Stelter and Bill Carter said he “has a gift for touching the passion nerve (by) tapping into fear about the future.”

They quoted Old Dominion University’s Jeffrey Jones saying Beck engages in “inciting rhetoric. People hear their values are under attack and they get worried. It becomes an opportunity for them to stand up and do something” without realizing how destructive Beck’s extremism is to their own well-being. Even Beck once said about himself: “I say on the air all the time, if you take what I say as gospel, you’re an idiot.”

His Premiere’s Speakers Bureau bio says he debuted in radio at age 13 in Seattle, and grew up in nearby Mount Vernon. After high school, he got jobs “as a Top 40 DJ” in Baltimore, Houston, and New Haven, CT.

It also explained that at age 30, he became consumed by alcoholism and drug addiction, then regained sobriety and “found a new direction.” He remarried, became a baptized Mormon, and decided to pursue talk radio after being offered his own show on Tampa, Florida station WFLA-AM. In his first year, it became number-one rated, and within 18 months, Premiere Radio Networks offered him national syndication.

In January 2002, The Glenn Beck Program debuted on 47 stations. Today, he’s on over 300 as well as XM satellite radio.

LDS Living Magazine (for Latter Day Saint Mormon families) provides more details about Beck’s background. It said he was fired from his first three radio jobs in Washington State. Six months later, he returned on WPGC in Washington, DC. Was again fired. Then he became program director and “morning guy” on a small Corpus Christi, TX station. After two years of “moving around from city to city, he ended up in Baltimore.” He also worked at WRKA in Louisville, KY and WKCI-FM in Hamden, CT.

Three days after converting to Mormonism, he was offered his first radio talk show in Tampa. It propelled him to national prominence and his current positions at Fox News, his syndicated radio program (first from Philadelphia in January 2002, now in New York), and as a hot topic on other programs, including MSNBC’s Keith Olbermann’s war of words with Beck.

He posted a September 6 request on The Daily Kos to “Send Me Everything You Can Find About Glenn Beck.” He added that he’ll “expand this to the television audience and have a dedicated email address to accept leads, tips, contacts, on Beck, his radio producer Burguiere, and the chief of his tv enables, Ailes (head of Fox News)….”

It may simply be a PR stunt to boost ratings and get added revenue for General Electric, MSNBC’s owner, that certainly can stop this if it wishes.

Sponsors Bailing Out on Beck

To date, over five dozen decided they’ll no longer be associated with his kind of antics, fearing, of course, it may harm their image and hurt sales and profits.

In 2005, Van Jones (now inactive) and James Rucker co-founded ColorOfChange.org “to strengthen Black America’s political voice” toward the goal of making “government more responsive to the concerns of Black Americans and to bring about positive political and social change for everyone.”

In the wake of Beck calling Obama a “racist” and attacking Van Jones, it sent a letter to his sponsors urging them to boycott “the kinds of views and tactics” he espouses and cease all advertising on his program.

FoxNewsBoycott.com joined in as part of its campaign “to help people realize that Fox News Channel and its personalities are a detriment to journalism and journalistic integrity.” It urges supporters “to boycott, not only Fox News Channel, but Fox News sponsors and companies that air Fox News in their places of business.”

To date, over 60 companies no longer advertise on Glenn Beck, including:

– AT & T

– Bank of America

– Bell & Howell

– Best Buy

– Campbell Soup

– Capital One

– Clorox

– Berkshire Hathaway’s GEICO Insurance

– General Mills

– HSBC

– Johnson & Johnson

– Kraft Foods

– Mercedes-Benz

– Procter & Gamble

– Sanofi-Aventis

– Sprint

– Travelers Insurance

– UPS

– Verizon Wireless, and

– Wal-Mart

Many others still advertise, but more keep pulling out, showing the effectiveness of the national campaign, backed by many tens of thousands of signatures from ColorOfChange.org and FoxNewsBoycott.com supporters.

The Internet’s power is real and proves when enough committed people back progressive issues, constructive change follows. If if works against Glenn Beck and Fox News, why not in a campaign to reclaim the kind of America people deserve and can have if they work hard enough for it.

If not now, when? If not us, who? If not soon, maybe never? If that’s not incentive enough, what is?

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Monday – Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national issues. All programs are archived for easy listening.

Complete article at:

www.globalresearch.ca

(click here to view)

Sandy Huffaker caglecartoons.com Sep 11, 2009 EditorialCartoonists.com

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WHY ARE AFRICAN-AMERICANS SO FREQUENTLY THE SUBJECT OF GLENN BECK’S RIDICULE AND CRITICISM?

By Devona Walker, The Loop

There are a lot of problems in America, but right-wingers and the GOP seem to be stuck on making controversy over
issues involving black people.

Complete article at:

www.alternet.org

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Talk Radio is a Cancerous Blight on the Nation; Not “Entertainment”.

By Jay Diamond
September 14, 2009

For months radio lout Steve Malzberg screamed 10 times a day that “Folks, Barack Obama HATES! this country and his WIFE HATES! this country”.

And when for over ten years, every day, Hannity couldn’t survive a fact check in the average kindergarten class, and when he violated Abner Louima with the equivalent of a verbal plunger after Louima had been worked over with a physical plunger, that was nothing else but Vile Poison.

Prior to low-brow, right wing, dishonest, and hate fueled talk radio, the political culture of our country would have prevented Joe Wilson from screaming insults at the President of the United States in the midst of an address to a joint session (or anywhere else).

This culture of relentlessly dishonest and utterly ignorant pure hate which is ubiquitous all over low-brow, rightwing radio is nothing other than Vile Poison, even though right wing apologists try to cosmeticize this swill as merely “entertainment”.

These transparently political apologistsareno doubt descended from those fine folks inancient Rome who made the casethat throwing Christians to lions was alsomerely “Entertainment”.

While it ispossible to do a radio program that is truly entertaining, honest, intelligent, funny, and informative, doing that requires some amount of ethics and talent and diligent application, and that does not describe the low-brow, right wing, hate fueled, dishonest, and power hungry slobs who bleed pure poison all across our public spectrum.

Employing the most ugly and persistently untruthful political slurs about crucial public policy questions along with ugly and false personal character assassination in furtherance of a bigoted and feudal political agenda that couldnever existon the meritsabsenttheir relentlesstsunami ofcalculated lying,would not in anyrationalenvironmentbeconsidered even remotely as”entertainment”.

As but one illustration,on this idiotic and malicious low-brow, right wing radio the President of the United States is a Marxist who HATES! this country along with his wife. What I ask any decent citizen can be the purpose of repeating such a statement multiple times a day on an individual’s radio program? And what can be the purpose of sponsors who purchase advertising on such a “show”. And what can be the purpose of an station licensee who right now features this Malzberg in addition to Savage, Dobbs, and Beck all on one station; WOR-AMin New York.

Color of Change, are you listening !?

That’s just one example…some others: Death panels, birthers, the USA couldn’t live without attacking and occupying Iraq (3 Trillion dollars later of tax payers money), Sarah Palin is a genius who loves America even as she makes speeches of love to the Alaska Independence Party whose whole existence is devoted to LEAVING the country she makes believe she loves.

And an endless torrent of theseirresponsiblegargoyleshurlingthered meatof hateand slanderto the least informed, most hate filled cadres in an increasingly ignorant demographic consumed in the malice and stupidity that makes license holders money today as it eats the country up from the inside in the long term.

This is the message that goes out all over talk radio on the Public’s Air, minute by minute, day after day after day.

It is killing the country they claim they love so much.

Hey, but it pays well.

What it is, is a disgrace, and it is a travesty to trivialize it as “entertainment”.

The unlettered, humorless slobs talking spit on low-brow, rightwing radio are not entertainment. They are an ugly spectacle. There is a difference.

Anyone who has seen traffic slow to a crawl as the motorists gawk at the spectacle of bleeding and broken bodies in the immediate aftermath of adeadlytraffic wreck understands that difference.

It is not subtle. Neither is the radio cancer eating away at the civic body of the United States.

These lowlifes like to bray on about how they want to “take the country back” (presumably from their black president and his family).

How’s this for an idea. How ’bout anti-hate Americans take back their radio stations !

Jay Diamond is a commentator and media activist in New York City. He has broadcast on WABC-AM, WOR-AM, and WEVD-AM in New York.

He can be reached at jaydiamond@usa.com

Author’s Bio: Jay Diamond is a progressive activist, media critic, and radio commentator.

Complete article at:

www.opednews.com

==========

Paulson’s Decision Cost Lehman, Then the World

The former Treasury boss arranged a Bear Stearns rescue but let Lehman go under. A Bear bankruptcy would’ve alarmed Fuld, thus averting the global upheaval

By Lawrence G. McDonald

My new book, A Colossal Failure of Common Sense, moves to a stark and irrevocable conclusion, that Henry Merritt Paulson, the former U.S. Treasury Secretary, made a fateful decision that within two weeks brought the world’s economy to its knees.

He decided to let Lehman Brothers, the 158-year-old Wall Street institution, go bankrupt. He need not have done so. But on that fateful weekend, Sept. 13-15, 2008, he made the decision with which he must live for the rest of his life. He would not save Lehman Brothers. As one senior Lehman managing director told me, “They put Lehman’s head underwater and watched for the bubbles.” And that did it, globally, as first the U.S. and then the rest of the world swooned.

Since last winter, I have had many hundreds of hours to ponder Paulson’s history-making decision, and while I cannot revise the truth, nor in any way let him off the hook, I am drawn to the conclusion that the Treasury boss did not lose the war on that final weekend. He lost it the previous March when he stepped forward and saved the much smaller Bear Stearns, which was in the same leaking boat as Lehman with far worse debt and no hope. Hank Paulson could have let them go, but he did not. He practically frog-marched JPMorgan Chase (JPM) into the arena and ordered it first to loan Bear Stearns a large amount of cash, and then five days later to buy the 86-year-old Wall Street bank.

When Paulson gave the lifeboat to Bear Stearns, it gave Lehman’s CEO Richard S. Fuld a deadly, false sense of confidence.

JPMorgan’s Behavior Change

Even today, the most clever Lehman minds tell me about a form of schizophrenia that JPMorgan displayed in its dealings with Bear Stearns and later Lehman. Bear was an investment bank almost half the size of Lehman. Yet the Fed and Treasury commissioned JPMorgan and its CEO Jamie Dimon to provide cash infusions to Bear the week before the bank’s bailout. JPMorgan became a new tool in Hank Paulson’s chest of creative innovations.

Fast-forward to September 2008—and oh how things had changed. Most senior traders and bankers I spoke to from Lehman were shocked at the new demeanor of JPMorgan, the split personality that Lehman was now experiencing like a bayonet in the back. JPMorgan was in a foul mood of sorts. Injecting aid, a cash infusion for Lehman? No, JPMorgan was now demanding weekly increases in the collateral that Lehman would have to put up in order to secure short-term loans to run its businesses. This suffocated the 158-year-old investment bank. It put her to sleep.

But what, I ask, would have happened if Paulson had simply stepped aside and let Bear Stearns collapse into bankruptcy back in March? I’ll tell you the first thing: Dick Fuld would probably have had a heart attack. “If he can let Bear Stearns go, he can let us go.”

And what would have been the natural progression? Fuld would have had no options. Mired in debt, holding billions and billions of unsellable assets, already entering its death throes, Lehman would then have had only one way out: to accept the offer about to be made by the Korea Development Bank, which when it materialized was around $23 a share. Fuld might have been way out of his depth in 21st century finance. But he was nobody’s fool, and he had a sense of self-preservation second to none. He would have accepted the Korean money in seven seconds, particularly since Paulson himself never stopped urging him to do so right until the men from the Far East withdrew as Labor Day arrived.

Lehman’s Leverage

A similar scenario played out during that turbulent September. John Thain, CEO of Lehman’s great rival, Merrill Lynch, knowing that Paulson was letting Lehman go, jumped willingly and enthusiastically into the arms of the near-bankrupt Bank of America (BAC).

In the end, the Treasury chief never forgave the Lehman chairman for ignoring that Korean offer, because in Hank’s opinion that probably would have saved the world. It was here that the constantly smoldering rift between the old Wall Street rivals, Paulson and Fuld, suddenly became a chasm. Because despite everything, Fuld had an almost obsessive desire to hold on to Lehman at all costs. With the Koreans on the sidelines, he began thrashing around, investing in major hedge funds, in small hedge funds, in overseas hedge funds. He even started to form hedge funds, and Hank Paulson was appalled. Here was a Wall Street bank leveraged almost 40 times its own value at the top of the market, plainly headed for oblivion, ignoring the Korean lifeline, silencing its best risk-takers, and spending its borrowed money like a drunken sailor. Hank Paulson never got over that.

Let me clarify that 40 times leverage is the equivalent of any gambler walking into a casino with just a $100 bill in his back pocket but playing on the tables with $4,000. It doesn’t take much to wipe out that old Benjamin.

Fuld and Paulson had dinner that spring of 2008. Fuld was characteristically rude to the Treasury boss. In turn Paulson was infuriated at this disrespect to his great office of state. Most of the distilled opinion suggests that it was that spring when Lehman’s fate was decided. But my own new opinion is that the hasty rescue of Bear Stearns was the fulcrum upon which the entire issue swung.

Hank Paulson and then New York Fed chief Timothy Geithner have argued that Bear Stearns had to be saved because systemic defense mechanisms protecting the markets had not been set up yet. Well, a fool could tell you the adequate mechanisms were not set up when Lehman failed, either. If Hank had let Bear go, the world would have looked very different.

Lawrence G. McDonald is the co-author of A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers and was a vice-president at Lehman from 2004 to 2008.

Complete article at:

www.businessweek.com

Book by Lawrence G. McDonald

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Director of National Intelligence unveiled the 2009 National Intelligence Strategy

News release: “On September 15, 2009, the Director of National Intelligence Dennis C. Blair unveiled the 2009 National Intelligence Strategy – the blueprint that will drive the priorities for the nation’s 16 intelligence agencies over the next 4 years. The National Intelligence Strategy (NIS) is one of the most important documents for the Intelligence Community (IC) as it lays out the strategic environment, sets priorities and objectives, and guides current and future decisions on budgets, acquisitions, and operations.”

PDF: www.dni.gov

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And now for the important news ….

By Argus Hamilton

President Obama insisted on a public health care plan that pays for itself. It is doable. They’ve ruled out a soda tax, but they think they can make billions by selling the broadcast rights for a reality show about the senior citizen death panels.

http://www.JewishWorldReview.com

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three thousand words

(click here to view)

Deb Milbrath Freelance Sep 16, 2009 EditorialCartoonists.com

www.dni.gov

Pat Bagley: resolve to do and be better!
(www.cagle.com)

Peray – Thailand: misinformation
(www.caglecartoons.com)