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Monday, August 31, 2009

From My Lai to Lockerbie

From My Lai to Lockerbie
When the Libyan jailed for the 1988 bombing of Pan Am Flight 103 over Lockerbie was freed, a furor erupted in the United States. At the same time, an apology from an American sentenced to life in prison for the massacre of Vietnamese civilians in 1971 - but who spent only three days locked up - was met with little fanfare. - Nick Turse (Aug 31, '09)

http://www.atimes.com/atimes/Southeast_Asia/KI01Ae02.html

Top Ten Bloggables – Marc Lynch, Foreign Policy: "5. Admiral Mullen’s strategic communication.

Top Ten Bloggables – Marc Lynch, Foreign Policy: "5. Admiral Mullen’s strategic communication. The Chairman of the Joint Chiefs just released a blunt three page article challenging the military’s new conventional wisdom on strategic communications. His bottom line — that words matter less than deeds — is no different from the top-line recommendations of dozens of reports on public diplomacy over the last few years. Everybody says that deeds matter more than words. But words do also matter — nothing speaks for itself, framing matters, and failure to engage in the public rhetorical battles would be disastrous. I suspect that his real target was the 'strategic communications' industry which has grown up remarkably in Pentagon circles over the last half decade. That really does need to be reined in, a I’ve written about often over the last few years and as Obama’s Pentagon and some parts of Congress have already begun to do. I’ll definitely have more to say about this!

http://lynch.foreignpolicy.com/posts/2009/08/29/top_ten_bloggables

Mulling Mullen's Message

Mulling Mullen's Message: Admiral Mullen seems to believe that if America builds trust and delivers, then it will earn respect and admiration - and win its wars. But America’s wars are the problem, notes Nadia Hijab – Middle East Online: "Reading about the essay by Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, I thought, at last! An American official who really gets it -- and the highest-ranking military officer, no less. At a time when the Obama Administration plans to invest heavily in strategic communication as part of 'winning' the war in Afghanistan, Mullen writes that what appear to be communication problems are actually 'policy and execution problems.'”

http://www.middle-east-online.com/english/opinion/?id=34000

5 Ways to Build a Fascist-Proof America If we want to build a fascist-proof America for the long haul, we must stand up now for everything we believe

5 Ways to Build a Fascist-Proof America
Sara Robinson, Campaign for America's Future
Rights and Liberties: If we want to build a fascist-proof America for the long haul, we must stand up now for everything we believe and everything we are.

http://www.alternet.org/rights/142250/5_ways_to_build_a_fascist-proof_america_/

How in the hell did we get here? And more to the point: How do we get back out?

The first question is depressingly easy. This is precisely where 40 years wandering in the right-wing moral, cultural and economic wilderness has left us -- and, in fact, where it was always intended to lead us.

A liberal democratic society is a complex system that's designed to be very resilient and self-correcting in the face of all kinds of extremism. But the health of that system -- especially its natural immunity to would-be attackers -- ultimately depends on just one factor: It cannot survive without people's ongoing confidence in a functioning political contract.

When it's working right, this contract guarantees the upper classes predictable, reliable wealth in return for their investments. It promises the middle class mobility, comfort and security. It ensures the working classes fair reward for fair work, chances to move ahead and protection against very real risk that they'll be forced into poverty if they can't work any more.

Generally, as long as everybody gets their piece of this constantly renegotiated deal, everybody stays invested in keeping the system going -- and a democratic society will remain upright, healthy and moving mostly forward.

For the past four decades, conservatives have done everything in their power to dismantle that essential contract, and thus destroy our mutual confidence in the fundamental agreements that allow any democratic system to function. (None dare call it treason -- but a solid case could be made.)

This isn't news: by now, most of us can recite the litany, chapter and verse, of the all the many ways they hacked away at America's essential ability to function as the Constitution intended.

But the biggest loser, as always, has been the working class -- the people whose only real power lies in their sweat and their numbers. Their faith in the promise of democratic self-government has been shattered through years of union-busting, farm foreclosures, factory exports, college grant cuts, subprime mortgage scams and all manner of betrayal, treachery, neglect and abuse.

Go to link for rest of article

Is the Antiwar Movement Waking Up? Not quite yet…

Is the Antiwar Movement Waking Up?

Not quite yet…

http://original.antiwar.com/justin/2009/08/30/is-the-antiwar-movement-waking-up/

Anthony DiMaggio What Obama Isn't Telling You About Afghanistan

Anthony DiMaggio
What Obama Isn't Telling You About Afghanistan

http://www.counterpunch.org/dimaggio08312009.html

Will the IG Report Cover the Role of White Shoe Law Firms? Madoff and the SEC's Revolving Door By PAM MARTENS

Will the IG Report Cover the Role of White Shoe Law Firms?
Madoff and the SEC's Revolving Door

By PAM MARTENS

The long-awaited investigative report by the Securities and Exchange Commission’s (SEC) Inspector General on how the SEC bungled multiple investigations of Bernard Madoff is set for release this week. Unfortunately, according to media reports, the long suffering investing public will not receive the report until the SEC itself has had a chance to review it.

The team that produced this report on one of the most long-running and convoluted frauds in the history of Wall Street included Inspector General H. David Kotz who came to the SEC-IG post in December 2007 after five years as Inspector General and Associate General Counsel for the Peace Corps. The Deputy Inspector General, Noelle Frangipane, also came to the SEC from the Peace Corps where she had served as Director of Policy and Public Information.

This lack of Wall Street cronyism by the top two in the Inspector General’s office might have been refreshing to some in Congress and compensated for their not knowing the difference between puts and calls and peaks and troughs and the intricacies of Mr. Madoff’s split-strike conversion strategy (he splits with your money while converting you to a pauper). But the background of the member of the team heading up the Inspector General’s Office of Investigations, J. David Fielder, should have rang serious alarm bells to Congressional investigators.

For the ten years leading up to July 2007, J. David Fielder worked for the SEC as a Senior Counsel in the Division of Enforcement. In February 1999, he moved to the Division of Investment Management, first as Senior Counsel on the Task Force for Adviser Regulation, then as Advisor to the Director. In November 2000, SEC Chairman, Arthur Levitt, appointed Fielder Counsel to the Chairman.

In July 2007, Mr. Fielder was invited to join the corporate law firm, Haynes and Boone LLP, as a partner. In other words, Mr. Fielder’s government issue rolodex filled with the names, home numbers and email addresses of his colleagues at the SEC along with the investigatory matters in his head is deemed fungible currency among corporate law firms and can be freely exchanged for partner status, instantaneously moving one from the lowly wages and attendant lifestyle of public servant to the rarefied bracket and luxuriant trappings of corporate law firm partner.

But what happened next is where things get interesting. In March 2009, just as the SEC Inspector General was hot in pursuit of Madoff aiders and abettors, Mr. Fielder gave up his lucrative partner status at Haynes and Boone to accept the lowly post of Assistant Inspector General of Investigations, working under a boss from the Peace Corps. In other words, he gave up big bucks for a demotion at the SEC.

What Mr. Fielder did might not raise alarm bells were it not happening on a regular basis throughout the corridors of Washington and Wall Street. To understand the implications, this maneuver deserves an appropriate name. A revolving door is assumed to mean one gets all the right connections as a public servant and cashes them in to the highest bidder in private industry. That concept doesn’t typically entertain the door revolving back to public servant status. On Wall Street, they call a maneuver like that a round trip: you buy 100 shares and eventually sell the same 100 shares. You end up back where you started: a round trip.

Just how many lawyer round trippers are involved in the Madoff investigation? Enough to raise a strong stench of circular corruption.

Linda Chatman Thomsen left the SEC in February and has now returned to the corporate law firm that represents many of the largest Wall Street firms, Davis Polk & Wardwell LLP. Ms. Thomsen, who served as head of Enforcement at the SEC, also achieved partner status in this round trip. Ms. Thomsen is married to Steuart Hill Thomsen, a partner in the law firm, Sutherland Asbill & Brennan LLP, which brags as follows in its brochure: “Many of our financial services attorneys have worked in the federal government, including regulatory agencies such as the SEC, FINRA and the Department of Justice.” Mr. Thomsen represents “many in the financial services industry” including “securities fraud cases.”

Linda Thomsen’s February 4, 2009 appearance before the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises left Chairman Paul E. Kanjorski (D-PA) and Committee Member Gary Ackerman (D-NY) smoldering over her smug attitude and refusal to answer questions. Congressman Ackerman erupted at one point, telling Ms. Thomsen and her colleagues: “You have single handedly diffused the American public of any sense of confidence in our financial markets if you are the watchdogs…”

Congressmen Kanjorski and Ackerman’s outrage was set off by earlier testimony that day from whistleblower Harry Markopolos who presented the multi year, documented complaints he had filed with the SEC advising that the Madoff operation was a giant Ponzi scheme, without any serious action on the part of the SEC. Markopolos said the agency “roars like a mouse, bites like a flea” and “when an entire industry you were supposed to be regulating disappears due to unregulated, unchecked greed, then you are both a captive regulator and a failed regulator….”

On May 14, 2009, Wayne Jett, Managing Principal and Chief Economist of Classical Capital LLC summed up Ms. Thomsen’s more recent SEC tenure as follows in a published letter to the SEC:

“As SEC's director of enforcement, Thomsen presided over the firing of her investigating attorney, Gary Aguirre, in 2005 shortly after Aguirre disclosed to Paul Berger, Thomsen's immediate subordinate, evidence of insider trading by a hedge fund. Berger learned that Aguirre's evidence pointed to Wall Street player John Mack [the head of Morgan Stanley] as the "tipper" in insider trading by Pequot Capital, a major hedge fund. Berger fired Aguirre and closed the investigation of Pequot…

After a statute of limitations expired foreclosing further action against Mack, Berger resigned from the SEC to accept a position with a major Wall Street law firm -- the same law firm which had contacted the SEC on behalf of investment bank Morgan Stanley to inquire whether Mack was exposed to any pending investigation. Berger pursued his new position as he exercised authority in the Pequot investigation and in the inquiry by Morgan Stanley.

Two Senate committees investigated Aguirre's firing and a joint minority report found appearances of impropriety. The report was followed by resignations of the SEC's inspector general, chief economist and three commissioners. A new SEC inspector general investigated and recommended disciplinary action against Thomsen for her conduct in the Pequot/Mack/Aguirre matter. But the Enforcement staff issued its own press release denying misfeasance. Commissioners voted to take no action against Thomsen despite the inspector general's report, and laudatory comments followed her eventual resignation.

In other words, if you’re only a domestic diva like Martha Stewart, SEC round trippers may see fit to throw you to the wolves. If you’re a major Wall Street firm generating tens of millions in billable hours to round trippers and their legal colleagues, you may get a gift-wrapped get out of jail free card.

This isn’t just my suspicion. U.S. District Court Judge Jed Rakoff smelled something fishy in the August 3rd deal the SEC cooked up with Bank of America. The Judge refused to approve what he perceived as a measly SEC settlement of $33 million in a lawsuit over Bank of America withholding from investors information that it had approved of Merrill Lynch paying out billions of dollars in bonuses as part of its rescue acquisition of the firm. (Both firms required life support from the public purse known as TARP.) Bloomberg News quotes Judge Rakoff as follows: “I would be less than candid if I didn’t express my continued misgivings about this settlement at this stage…When this settlement first came to me, it seemed to me to be lacking, for lack of a better word, in transparency. I did not know much about the facts from the complaint. I did not know much, or really anything, about the basis for the settlement.”

That was the same view held by the Congressional questioners in the Madoff matter at the February 4, 2009 dust up with top SEC officials. After many rounds of pointed questions produced unresponsive answers, round tripper Andrew Vollmer, then Acting General Counsel of the SEC, explained why. He and his fellow SEC panelists were claiming executive privilege. This position elicited the following outburst from Congressman Ackerman: “Your value to us is useless…Our economy is in crisis, Mr. Vollmer. We thought the enemy was Mr. Madoff. I think it’s you…you were the shield…You come here and fumble through make believe answers that you concoct and attribute it to executive privilege….”

On April 2, 2009, another of Wall Street’s favorite law firms, WilmerHale, announced that Andrew Vollmer would be returning to the firm as a partner. According to the press release, before joining the SEC, Vollmer was a vice-chair of WilmerHale’s Securities Department.

The idea that highly paid corporate lawyers have an insatiable altruistic bent to periodically serve as low wage staffers at the SEC is worthy of its own Congressional hearing. Any serious reading of the facts will likely prove these lawyers are going to protect that big Wall Street firm that represents their next big pay day and fast track to partnership.

And just what does the Madoff fraud have to do with the big firms on Wall Street? The multi billion dollar proceeds of the fraud were wired in and out of JPMorgan Chase where Madoff maintained his firm’s account. Also, Madoff partnered with Citigroup’s Smith Barney, Morgan Stanley, Merrill Lynch and Goldman Sachs to compete head on with the New York Stock Exchange in a venture called Primex Trading as reported here at CounterPunch on January 15, 2009.

Pam Martens worked on Wall Street for 21 years; she has no security position, long or short, in any company mentioned in this article. She writes on public interest issues from New Hampshire. She can be reached at pamk741@aol.com

http://www.counterpunch.org/martens08312009.html

Lockerbie and Libyan oil

Lockerbie and Libyan oil
Tripoli, Libya (UPI) Aug 28, 2009 - Scotland's controversial Aug. 20 release of a cancer-stricken Libyan intelligence agent convicted of bombing Pan Am Flight 103 in December 1988 has triggered allegations that Britain was seeking to secure oil and gas contracts in energy-rich Libya. London vehemently denies that. But France, Italy and Switzerland have done just that as Europe strives to cut its dependency on natural gas ... more

http://www.energy-daily.com/reports/Lockerbie_and_Libyan_oil_999.html

LNG boom to make Australia 'Middle East of gas': analysts

LNG boom to make Australia 'Middle East of gas': analysts
Melbourne (AFP) Aug 30, 2009 - Australia is poised to become "the Middle East of gas" as Asia's rapidly growing economies queue up to buy its vast reserves in liquid form, according to analysts. The government last week approved the massive Gorgon liquefied natural gas (LNG) project off Western Australia, which Prime Minister Kevin Rudd said would cost 50 billion dollars (41 billion US) to build and would generate 6,000 ... more

http://webmail.aol.com/44148/aol/en-us/Suite.aspx

Saudis close to Russian copter buy

Saudis close to Russian copter buy
Beirut, Lebanon (UPI) Aug 28, 2009 - Saudi Arabia is reported to be in the "final stage" of negotiating a deal with Russia to buy up to 30 assault helicopters, a major departure by a key U.S. ally that is slated to get advanced U.S. weaponry worth billions of dollars over the next decade. Jane's Defense Weekly, published in London, says in this week's edition that the multibillion-dollar deal was first proposed in November ... more

http://www.spacewar.com/reports/Saudis_close_to_Russian_copter_buy_999.html

NKorean arms headed to Iran seized in UAE: diplomat

NKorean arms headed to Iran seized in UAE: diplomat
United Nations (AFP) Aug 28, 2009 - The United Arab Emirates has seized a ship carrying North Korean weapons to Iran, marking the first time a nation has acted on UN sanctions to stop the communist state's proliferation, a diplomat said Friday. The incident emerged despite a recent easing of tensions with the hardline communist nation, which has been seeking a resumption of talks with the United States three months after ... more

http://www.spacewar.com/reports/NKorean_arms_headed_to_Iran_seized_in_UAE_diplomat_999.html

Derrick Crowe: In Afghanistan, We Know Failure When We See It

Derrick Crowe: In Afghanistan, We Know Failure When We See It
I've been mulling over the inability of Ambassador Holbrooke and Secretary Gates to define success in Afghanistan or to speculate about how long we should expect to be fighting a war there.

http://www.huffingtonpost.com/derrick-crowe/in-afghanistan-we-know-fa_b_272674.html

Washington Prepares for Economic War

Washington Prepares for Economic War
Minyanville.com
In his op-ed on Friday in the New York Times, Paul Krugman offers "deficits saved the world" from a repeat of the Great Depression. ...

http://www.minyanville.com/articles/fed-choices-government-bernanke/index/a/24300

Ducking the Deficit Washington Post By Robert J. Samuelson

Ducking the Deficit
Washington Post
By Robert J. Samuelson The problem of the burgeoning government debt is mainly political, but the adverse consequences may be economic. ...

http://www.washingtonpost.com/wp-dyn/conte...id=opinionsbox1

Blaming Hoover (for Helping Workers)

Blaming Hoover (for Helping Workers)
New York Times
I develop a theory of labor market failure for the Great Depression based on Hoover's industrial labor program that provided industry with protection from ...

http://norris.blogs.nytimes.com/2009/08/31/blaming-hoover-for-helping-workers/?hp

The Devil's Excrement By Moisés Naím Can oil-rich countries avoid the resource curse?

The Devil's Excrement
By Moisés Naím

Can oil-rich countries avoid the resource curse?

http://www.foreignpolicy.com/articles/2009/08/17/the_devil_s_excrement

Is a Green World a Safer World? By David J. Rothkopf

Is a Green World a Safer World?
By David J. Rothkopf

A guide to the coming green geopolitical crises.

http://www.foreignpolicy.com/articles/2009/08/17/is_a_green_world_a_safer_world_not_necessarily

The Great Pipeline Opera By Daniel Freifeld

The Great Pipeline Opera
By Daniel Freifeld

Inside the European pipeline fantasy that became a real-life gas war with Russia.

http://www.foreignpolicy.com/articles/2009/08/12/the_great_pipeline_opera

The Strait Dope on Hormuz By Eugene Gholz No, Iran can’t cut off your oil.

The Strait Dope on Hormuz
By Eugene Gholz

No, Iran can’t cut off your oil.

http://www.foreignpolicy.com/articles/2009/08/12/the_strait_dope

Don't Be Crude By Prince Turki al-Faisal

Don't Be Crude
By Prince Turki al-Faisal

Why Barack Obama's energy-independence talk is just demagoguery.


http://www.foreignpolicy.com/articles/2009/08/17/dont_be_crude

Subpriming the Pump By Mahmoud A. El-Gamal and Amy Myers Jaffe

Subpriming the Pump
By Mahmoud A. El-Gamal and Amy Myers Jaffe

Oil wealth used to hurt only those who had it. Now, it’s hurting everyone.

http://www.foreignpolicy.com/articles/2009/08/17/subpriming_the_pump

It's Still the One By Daniel Yergin

It's Still the One
By Daniel Yergin

Oil's very future is being seriously questioned, debated, and challenged. The author of an acclaimed history explains why, just as we need more oil than ever, it is changing faster than we can keep up with.

http://www.foreignpolicy.com/articles/2009/08/17/its_still_the_one

Think Again: Realism Obama Is No Realist By Paul Wolfowitz

Obama Is No Realist
By Paul Wolfowitz

Amid war and recession, Americans are in a no-nonsense, matter-of-fact mood. But that, says a leading architect of George W. Bush’s foreign policy, is no reason to adopt a misguided doctrine.

http://www.foreignpolicy.com/articles/2009/08/17/think_again_realism

Paul Wolfowitz vs. the Realists by Stephen M. Walt

Paul Wolfowitz vs. the Realists
by Stephen M. Walt

http://walt.foreignpolicy.com/posts/2009/08/23/real_realism

What do realists believe? Realists see international politics as an inherently competitive realm where states compete for advantage and where security is sometimes precarious. So, realists emphasize that states should keep a keen eye on the balance of power, which makes them wary of squandering blood or treasure on needless military buildups, ideological crusades, or foolish foreign wars. Realists cherish America's commitment to democracy and individual liberty, but they know that ideals alone are no basis for conducting foreign policy. They also understand that endless overseas adventures will inevitably provoke a hostile backlash abroad and force us to compromise freedoms at home.

Even The New Republic Now Calls for a Party Purge of Corporate-Owned 'Centrists' by Glenn Greenwald

Even The New Republic Now Calls for a Party Purge of Corporate-Owned 'Centrists'

by Glenn Greenwald

The New Republic, 2004, endorsing Joe Lieberman for President:

But one day, Joe Lieberman's warnings in this campaign will look prophetic. And the principles he has espoused will once again guide the Democratic Party. It will be the work of this magazine, to whatever small degree possible, to hasten that day.

TNR's Jonathan Chait, in The Los Angeles Times, 2006, viciously condemning those who mounted a primary challenge against Lieberman (an "anti-Lieberman jihad"):

[T]he anti-Lieberman campaign has come to stand for much more than Lieberman's sins. It's a test of strength for the new breed of left-wing activists who are flexing their muscles within the party. These are exactly the sorts of fanatics who tore the party apart in the late 1960s and early 1970s. They think in simple slogans and refuse to tolerate any ideological dissent.

TNR's Chait, last month:

A few weeks ago, Senator Dianne Feinstein announced that she and other Senate Democrats harbored reservations about President Obama's plans to overhaul the health care system. . . . The reaction from the left was swift and, by the standards of such things, furious. Which is to say, not very furious. . . .

I have a suggestion for something that would be productive: run a primary challenge against her. . . . The possibility of a primary challenge could [also] balance out [Sen. Evan] Bayh's incentives, thus aligning them more with those of the national party. . . . Primary electorates consist of a small, highly partisan subset of the electorate, and the prospect of submitting themselves to a partisan loyalty contest terrifies centrists like Bayh.

TNR's Chait, this week:

But if health care reform fails, liberals need to understand who to blame and how to fix it. They need to start knocking off Democrats like Conrad and Joe Lieberman, who seem to be trying to kill health care reform, even if this temporarily costs the Democrats some seats. . . . If health care reform can't pass now, then a filibuster-proof Democratic majority isn't worth having. At that point you have to consider blowing up the party and waiting a decade or two to rebuild a new one that's able to address the country's actual needs.

___________

My, what a rapid and total reversal -- one effectuated without the slightest acknowledgment that it even occurred. But that's just the accountability-free nature of Beltway punditry. There's a more important point highlighted here: namely, it is a sign of how dysfunctional the Democratic Party is -- and how meaningless is their glorious super-majority -- that even The New Republic, which long prided itself on safeguarding the Party from nefarious left-wing influences, is now calling for "centrist" Democratic Senators (even including Joe Lieberman) to be thrown out of office by means of primary challenges (I believe that was once called a "purity purge"), even if doing so results in a loss of Democratic seats. Chait's rationale is that allowing "centrist" dominance within the party means that the same corporate interests (rather than the interests of constituents) and the same political agenda end up being served regardless of which party is in control, meaning that -- as he put it -- even "a filibuster-proof Democratic majority isn't worth having" because nothing meaningful changes. You don't say.

That, of course, was exactly the motivating premise of those who sought to remove Joe Lieberman from the Senate in 2006 -- the people Chait demonized back then as "left-wing fanatics" who "refuse to tolerate any ideological dissent." That was also the animating principle behind the founding last year of Accountability Now, largely designed to recruit and enable meaningful primary challenges against corrupt, unaccountable, and worthless corporate-serving incumbents. As I wrote at the time in explaining the rationale for that project, after enumerating all of the radical Bush policies eagerly supported by Democrats:

As the 2006 election and these subsequent events conclusively demonstrate, mindlessly supporting and electing more Democrats for its own sake doesn't solve or even mitigate anything. Grounded in the premise that the Democrats are going to control both houses of Congress for the foreseeable future -- a premise virtually nobody disputes -- the primary objective has to be to alter the behavior of those who control the Congress.

Increasing the Democrats' margin of control doesn't achieve that goal. It does the opposite. Conveying to Democrats that you will support all of them no matter what they do, no matter how egregiously they trample on your values, only ensures that they will ignore your political priorities and values even more. Working to expand the margin of control Steny Hoyer, Rahm Emanuel and Harry Reid already enjoy -- further entrenching them in power -- only ensures that they will be less responsive and accountable. Only by attaching a serious price to their enabling of these extremist, destructive policies will their behavior change. If they are rewarded with greater control and greater comfort for doing what they've been doing, then it's just guaranteed that they'll continue to do the same thing. Only if they suffer losses and have their power threatened from this behavior will the behavior change.

And as part of a discussion I had with Lanny Davis -- who, echoing the 2006 version of Chait, had accused Accountability Now in The Washington Times of seeking the "ideological cleansing of the Democratic Party" -- I wrote:

What rational person would ever think that it's a bad thing to force incumbent members of Congress to have to justify their actions to voters, compete within their own party over conflicting ideas, and maximize the instruments available to citizens to keep their representatives accountable? Supporting primary challenges against incumbents who enable policies that you think are bad and harmful is about the purest expression of democracy there can be. And yet, so many people have become convinced that primary challenges are inherently illegitimate, and that what is "anti-democratic" is not the 97% re-election rates and the huge institutional advantages incumbents possess, but rather, attempts to expand the democratic process and the range of acceptable ideas by fostering intra-party debates and forcing incumbents to have to go before voters to explain what they've done.

And as I noted in my June, 2008 article entitled "Let's Give Blue Dogs the Boot," it is blind support for the likes of Chris Carney, Steny Hoyer, and various other corporate-owned Blue Dogs that made the Democratic Party key enablers of the ongoing Iraq War, telecom immunity, warrantless eavesdropping, and virtually every other piece of legislation demanded by the corporate interests that own both parties in Congress.

* * * * *

While it's lovely that The New Republic has now joined that movement and decided that corporate-owned "centrists" need to be purged from the Party, Chait is laboring under complete blindness about the reasons these problems have arisen. Chait accuses me, Dan Froomkin and "liberals" generally of "confusion" because we believe that the Obama White House bears some of the blame in the dominance of corporate interests generally and in the health care battle specifically. Chait echoes the facially absurd excuse of the most hardened Obama loyalists everywhere: namely, that Obama, Rahm Emanuel and friends are just helpless, impotent observers who wield no influence over the health care debate and can do nothing but sit back and hope and pray that the Senate will pass a good, progressive health care reform bill free of excessive servitude to the health care and drug industries. If the Congress refuses to, well that's obviously not Obama's fault -- a President isn't in the Congress and can't really influence what it does, so this excuse-making goes.

For the moment, leave aside all the evidence to the contrary: that, as Chait's colleague Jonathan Cohn detailed, the Obama White House secretly entered into a deal with the drug industry not to negotiate for lower prices; that Obama has repeatedly sought to empower the Baucus-dominated Senate Finance Committee at the expense of more progressive committees; that the White House aggressively threatens, berates, and cajoles House progressives who impede the President's agenda but hasn't done anything against Blue Dogs; that the strategy of the White House from the start has been to ensure that the health care and drug industries are pleased so that they continue to use their ample largesse to fund the Democrats rather than get behind a GOP takeover in 2010; and that Emanuel built his career and power base by controlling the Congress through the expansion of the Blue Dogs and other "centrist" and "conservative" members and by pleasing corporate donors, thus rendering the image of him as a helpless, passive bystander in the health care debate transparent fiction. Even Dick Durbin -- the Senate's number two Democrat -- acknowledges that, even with a huge Democratic majority, the banking industry "frankly owns" the Congress.

More important than all of that is the fact that there is one principal reason that Blue Dogs and "centrists" exert such dominance within the Party: because the Party leadership, led by the Obama White House, wants it that way and works hard to ensure it continues. While Chait seems to envision himself as the pioneering inventor of the primary challenge strategy (something he first articulated six weeks ago), Accountability Now has actually been working continuously for the last year on recruiting credible primary challengers and building an infrastructure to support those challenges -- all in order to unseat the unresponsive, corrupt and corporate-owned incumbents who ensure that the same factions control government no matter which party is in control. But the principal barrier to those efforts has been the accurate perception that the White House and President -- along with key party institutions such as the DCCC -- will use their vast resources to keep Blue Dogs and "centrists" in office and crush any efforts from within the party to unseat them.

It's hard to overstate how many promising potential primary challengers with whom we've spoken -- highly energized and impressive members of City Councils or County Commissions or state legislatures or just private citizens -- who are eager to run against their corporate-owned Democratic Congressional incumbent but are deterred by one primary fear: that Obama and the Party infrastructure will undercut their efforts by actively supporting the Blue Dog incumbent. That fear is particularly pronounced for potential African-American challengers in districts where the corporate-serving "centrist" incumbent is wildly out of step with the interests and views of the typical (and sometimes overwhelmingly African-American) Democratic voter. Such potential challengers anticipate that Obama will intervene on behalf of the Blue Dog against the progressive challenger -- as he's done before -- and sabotage not only their primary challenge but perhaps their future viability as a candidate in their community and district.

That's what makes Chait's insistence that the Obama White House is just an innocent, impotent bystander in all of this so painfully naive and wrong (Obama says he wants a public option, so doesn't that settle it?, asks Chait, vacantly batting his eyes with child-like trust and innocence). When the White House genuinely wants a bill to pass -- rather than paying irrelevant lip service to it -- they know how to apply pressure on the defiant members of Congress:

The White House is playing hardball with Democrats who intend to vote against the supplemental war spending bill, threatening freshmen who oppose it that they won't get help with reelection and will be cut off from the White House, Rep. Lynn Woolsey (D-Calif.) said Friday.

"We're not going to help you. You'll never hear from us again," Woolsey said the White House is telling freshmen.

Rahm Emanuel, Tom Delay, and the Bush/Cheney White House have left no doubt that where there's a will to influence the actions of Senators and House members in one's own party, there's a way. But the Obama White House has done nothing in the way of attempting to change the behavior of the supposedly obstructionist Blue Dogs and centrists whom Obama-defenders are eager to blame for the health care standstill. In fact, they've done the opposite: Emanuel has repeatedly leapt to their defense and attacked progressives who sought to influence or otherwise put pressure on them to change behavior. White House threats that "you'll never hear from us again" are issued to defiant progressives only. Not only are such threats never issued to "centrists" and Blue Dogs who are supposedly impeding the President's health care agenda, but the White House does everything it can to protect those ostensible obstructionists and further entrench them in power. Isn't all of this fairly strong evidence that the White House knew, accepted and likely even desired from the start that -- despite the President's public assurances to progressives -- the "public option," understandably despised by the insurance industry, would be dropped from bill?

Nobody suggests that the President could easily or single-handedly change the behavior of Kent Conrad or Mike Ross. But there's certainly things -- effective things -- he could do to try, including making it more difficult for those politicians to stay in office, exactly as they threaten to do with defiant progressives. But they don't do that. They do the opposite. The reason that Blue Dogs and "centrists" exert such control in the Democratic Party and are able to ensure the Party remains beholden to corporate interests is because that's how Party leaders want it. That's how the Democratic Party has been built and it's how they continue to maintain their power.

* * * * *

It's certainly true that the faces of the Republican Party (Rush Limbaugh, Glenn Beck, Sarah Palin, Bill Kristol, James Dobson) are significantly more warped and repellent than the standard Democrat, but the central fact in American political life is that the same narrow factions continue to control our political process regardless of which party is in control (note this recently leaked memo from GE executives emphasizing that "the intersection between GE's interests and government action is clearer than ever" and thus urging that all GE resources continue to be devoted to ensuring the enactment of favorable legislation, such as the Democratic Waxman-Markey climate and energy bill, something accomplished by flooding both parties equally with corporate largesse).

All of this hasn't happened despite the best efforts of the Obama White House to battle against it. To the contrary, Obama himself has been a major beneficiary of this process -- helping Democrats to be the leading recipient of corporate money -- and key Obama allies like Rahm Emanuel and Chuck Schumer have built their power bases through servitude to corporate interests. The very idea that Obama is valiantly struggling to cleanse the party of its corporate and centrist dominance, yet is just haplessly and helplessly unable to do so, is ludicrous beyond words.

It's possible to reasonably defend those actions as a necessary, pragmatic and prudent strategy for keeping Republicans out of power. But it's not possible to reasonably deny that the Democratic Party is how it is because that's how its leaders, including Obama, want it to be. Their actions permit no other conclusion. Indeed, one potential bright side with what's happening with the health care debate -- the Party's total devotion to the health care and drug industries despite huge majorities and a massive electoral mandate -- is that these truths have become so glaring that it is finally forcing even the most "sensible" Democratic partisans (TNR) to recognize how fundamentally flawed the Party is. That also appears to be making the prospect of recruiting credible challenges easier, and Accountability Now hopes to have some significant announcements soon.

If the Democratic Party is to become a meaningful alternative, free from corporate control, that will happen not because party leaders such as Obama cause it to happen. Instead, it will only occur from efforts on the part of Democrats to cease support for, and begin working to eject, those elements which keep the Party beholden to the same interests as the ones who own and control the so-called "other party." Systematic, credible primary challenges -- to impose a price for the Party on this behavior (by forcing them to divert resources to fending off primary challenges) and to make incumbents more accountable to their constituents -- is the best, perhaps the only, means for accomplishing that, if it can be accomplished at all.
Copyright ©2009 Salon Media Group, Inc.

http://www.commondreams.org/view/2009/08/28

Even Camelot Needed Health Care by Michael Winship

Even Camelot Needed Health Care

by Michael Winship

Toward the end of George McGovern's failed presidential bid in 1972, I was helping advance a bus trip for vice presidential candidate Sargent Shriver. The final weekend of the campaign, his caravan would start in New Hampshire and work its way down the Eastern seaboard, holding rallies along the way and winding up in Washington, DC, just before Election Day.

As we spoke with mayors whose cities would be visited, the draw wasn't Shriver but the news that his brother-in-law, Senator Ted Kennedy, would be accompanying him. Even though Chappaquiddick had taken place just a little more than three years before, it was the Kennedy charisma, the power of that family that still got even the most seasoned local politico excited.

Imagine how popular we were a few days later when we had to go back to tell them Teddy wasn't coming. His bad back from that near fatal plane crash in 1964 made a long bus journey impossible to endure. Shriver still drew crowds but it just wasn't the same.

Nearly 20 years later, I ran into Kennedy on an escalator at the AFL-CIO convention in Detroit as he arrived to make a speech. No bodyguards (visible, anyway), no entourage. I thought that I had never seen him look so healthy and vigorous. The gregariousness that made him such a consummate politician was on full display as we chatted and he loudly greeted union officials as we ascended, each a hail fellow, well met.

To those belonging to the post-baby boomer generations, it may be difficult to comprehend the change that took place in America when Ted Kennedy's older brother Jack became President in 1961 -- although the successful embracing of the Obama candidacy by young people comes close.

As we ended the years of the Eisenhower administration, even though the nation was more prosperous than ever, there was a grayness to everyday life that seemed to shift to Technicolor with the advent of those brief Kennedy years, like Dorothy shaking off the dust of Kansas for Oz.

John F. Kennedy's presidential race against Richard Nixon split my family neatly in two. My dad and older brother were for Nixon, my mother and I favored JFK (but I still have a gold Nixon tie clip my father prized, with an engraved caricature of Tricky Dick that looks more like Bob Hope than the presidential incubus we all came to know and love).

My father and brother came around. I witnessed Kennedy's inauguration on the elementary school's TV set, and was allowed to stay up late to watch the inaugural balls. My mother kept scrapbooks about Jack and Jackie and Caroline and John-John. All of us snapped up stories about family life in the White House and wept when the President died in Dallas. A few years later we would do the same for Bobby.

As time went by we would learn that we had been fooled about a lot of it; that the Wizard was a man behind a curtain, that much of the Camelot legend's glitter was media hype as bogus as fool's gold. But there remained about the Kennedy family a sort of grand, Shakespearean sublimity that applied as equally to the hubris and heartbreak as the good luck and achievement.

Or, in the words of playwright, journalist and Republican Clare Boothe Luce, cited in some of this week's obituaries, "Where else but in gothic fiction, where else among real people could one encounter such triumphs and tragedies, such beauty and charm and ambition and pride and human wreckage, such dedication to the best and lapses into the mire of life; such vulgar, noble, driven, generous, self-centered, loving, suspicious, devious, honorable, vulnerable, indomitable people?"

But how interesting that despite their grossest and most callow foibles and failings, throughout the life and times of the three Kennedy brothers who survived their older brother Joe there was a deep, moral concern for the nation's health that continued right up through Ted Kennedy's death. Notice in their memories of him this week how many friends and colleagues mentioned help that Senator Kennedy got for them during medical crises of their own.

Vice President Joe Biden remembered that when his two sons were recovering from the car crash that took the life of his wife and daughter in 1972, Kennedy "was on the phone with me literally ever day in the hospital... I'd turn around and there would be some specialist from Massachusetts, a doc I had never even asked for, literally sitting in the room with me."

And in Thursday's Washington Post, Howard Kurtz reported that, "Chris Matthews, a Type 2 diabetic, spoke of Kennedy calling him with advice after the 'Hardball' host had an attack of hypoglycemia. Paul Begala, a Democratic strategist, recalled on CNN that when his father had received a cancer diagnosis, Kennedy called and 'gave me the name of one of the world's foremost experts in cancer treatment. He said, "He's expecting your call. I just talked to him." And he helped pave the way to get my father the treatment that, frankly, saved his life.'"

Perhaps such concern was inspired by the example of the matriarch Rose's selfless devotion to service in the name of the Catholic Church or simply all the time the Kennedy family has spent in hospital wards through the years, nursing or mourning their own.

The first time I ever heard the dreaded phrase "socialized medicine" was during John F. Kennedy's presidency, when the GOP and the AMA fought his administration's attempts at health care reform. And during his own, all too brief presidential campaign in 1968, when Bobby Kennedy told audiences that decent medical care should not be a luxury of the rich, he quoted Aristotle: "If we believe men have any personal rights at all, then they must have an absolute moral right to such a measure of good health as society can provide."

The only one of the brothers to live beyond the age of fifty and make it to senior citizenship, Ted Kennedy honed his skills as a legislator over nearly as many decades in the US Senate, and universal health care was, in his words, the cause of his life.

Through his years there, Kennedy pushed for it incrementally with the Americans with Disabilities Act, creation of the State Children's Health Insurance Program (S-Chip), the Health Insurance Portability and Accountability Act allowing folks to hang onto their insurance after leaving a job, the creation of the Occupational Safety and Health Administration (OSHA), increased funds for AIDS and cancer research and community medical centers.

But many believe the time for increments has passed. In Edward Moore Kennedy's name, it's time to do the right thing, the big thing; time to revive flagging support and step up to universal reform. Already there has been far too much shouting and far too little healing.

In Newsweek last month, Kennedy wrote with his longtime speechwriter and advisor Bob Shrum, "I've thought in an even more powerful way than before about what this will mean to others. And I am resolved to see to it this year that we create a system to ensure that someday, when there is a cure for the disease I now have, no American who needs it will be denied it."

Ted Kennedy, resolute in his faith and passionately, unabashedly liberal to the last breath, said he wanted "a good ending for myself." Universal health care -- at its best with a public option -- would be it.

Michael Winship is senior writer of the weekly public affairs program "Bill Moyers Journal," which airs Friday night on PBS. Check local airtimes or comment at The Moyers Blog at www.pbs.org/moyers.

http://www.commondreams.org/view/2009/08/29-3

Kennedy: Liberal lamb of the senate

Kennedy: Liberal lamb of the senate
United States Senator Ted Kennedy, who died this week, was a congressional lamb, not a lion. In an era when liberal Democrats lost every battle that mattered, Kennedy was the movement's poster boy. - Muhammad Cohen (Aug 28, '09)

http://www.atimes.com/atimes/Front_Page/KH29Aa01.html


HONG KONG - Senator Ted Kennedy, who died this week aged 77, was the champion of the left during the greatest surge to the right in United States political history. Rather than the liberal lion of the senate fiercely defending his turf, he was a lamb who failed to stop and even abetted the country's seismic shift away from his principals and ideals. The very word liberal transformed from an adjective to an accusation while Kennedy was the keeper of its flame.

I don't make these charges as one of the legion of Kennedy haters. Quite the contrary: I'm a proud, card-carrying liberal.

COMMENT
Kennedy: Liberal loser of the senate
By Muhammad Cohen

HONG KONG - Senator Ted Kennedy, who died this week aged 77, was the champion of the left during the greatest surge to the right in United States political history. Rather than the liberal lion of the senate fiercely defending his turf, he was a lamb who failed to stop and even abetted the country's seismic shift away from his principals and ideals. The very word liberal transformed from an adjective to an accusation while Kennedy was the keeper of its flame.

I don't make these charges as one of the legion of Kennedy haters. Quite the contrary: I'm a proud, card-carrying liberal.

"To Sail Against the Wind" poster, a campaign contribution keepsake from Kennedy's one and only presidential run in 1980, showing the senator stoutly striding to his left, has graced my wall on three continents. I would have voted for Kennedy instead of any presidential candidate of the past 40 years, so count me as a true believer.

I don't blame Kennedy for that 1980 run against Jimmy Carter, a sitting president of his own party. I don't even blame Kennedy, though many do, for Carter's subsequent defeat at the hands of Ronald Reagan. In 1979, Carter threatened, "If Kennedy runs, I'll whip his ass." Kennedy let him, and that's unforgivable. Though friends and foes alike salute Kennedy's legislative record, those bills are mere footnotes to the dominant trend of the past 40 years. The Americans With Disabilities Act, No Children Left Behind and the Occupational Safety and Health Act don't stack up to a single Clarence Thomas or Rush Limbaugh that Kennedy helped create. In an era when liberals lost every battle that mattered, Kennedy was the movement's poster boy.

Kennedy didn't just fail to stem the rightward tide, he helped power it. Through his own personal misconduct, from cheating at Harvard to Chappaquiddick to his binge with William Kennedy Smith of the blue-dot rape trial, Kennedy exemplified the privileged, irresponsibility that fueled the rightwing revolution.

Magical name
The Kennedy name was said to be magical among liberals, but it became even more effective for conservatives. The mere mention of Ted Kennedy on any issue was enough to open rightwing wallets. For every dollar Kennedy raised for causes he supported, his name probably raised 10 times as much for causes he opposed. Portraying himself as a champion of the working class, Kennedy simultaneously financed the movement that convinced millions of Joe the Plumbers to vote against their own interests.

While he became a powerful symbol for the right of everything that was wrong with government, liberals, Democrats and Washington, Kennedy failed to use his iconic position to inspire and move his allies. He was the one liberal politician of his time guaranteed a national audience whenever he spoke out. But Kennedy rarely chose to take that big stage to galvanize his side and move public opinion on key issues that defined the US over the past four decades.

Where was he on George Bush I's Supreme Court nomination of Clarence Thomas, the rightwing extremist whose lifetime appointment to the court will have a far greater impact than Kennedy and his brothers combined? When Thomas' 1991 confirmation hearings deteriorated into a circus with pubic hair on soda cans in the center ring, where was Kennedy to tell the president and the country that it had to demand someone better? Actually, Kennedy was right there on the Senate Judiciary Committee, gagged by his own string of peccadilloes.

Bushwhacked
When Thomas cast the vote that made George W Bush president, where was Kennedy to say it was wrong in a democracy for nine judges to order vote-counting stopped? Where was Kennedy to express liberal outrage at this sham and to lead a movement to refuse to recognize Bush as president until the votes were counted? Why wasn't he calling on fellow lawmakers to stand and turn their backs whenever they were confronted with this immorally appointed president?

Well, Kennedy was too busy then crafting the flawed and under-funded No Children Left Behind Act that not only made public education less effective but gave the sham president legitimacy. After asserting Bush betrayed him, Kennedy went back to work again with that same administration on prescription drug coverage for seniors, only to see his support used to create government handouts for drug companies. The guy just didn't learn.

Where was Kennedy's call for liberals to march to protest the invasion of Iraq? Where was he on the erosion of civil liberties under George W Bush? Where was he over the past 40 years on taking meaningful steps to end America's dependence on imported oil and stop fouling the planet?

Most important, where was Kennedy on the decades-long slide starting with Reagan that transformed the government's mandate and public opinion about the very mission of America. Kennedy's silence was deafening as Republicans and Democrats alike pandered to business and cut taxes on the wealthy, mocking his brother John's clarion call in his inaugural speech, "Ask not what your country can do for you, ask what you can do for your country."

Go ask Al
It's deeply ironic that Kennedy dies in the midst of a national firestorm over healthcare reform, the issue that he hoped to make his crowning achievement. He leaves the issues mired in the lies and muddle that he allowed to spread and poison the national debate. Senior citizens with their social security benefits and Medicare cards stand up at town hall meetings today demanding, "Keep government's hands off me and my healthcare," not only because of Fox News and rightwing radio, but because Ted Kennedy refused his mantle to refute the noise and nonsense on the right, leaving it instead to the likes of Al Franken.

Kennedy eschewed that national spotlight to become the consummate Capitol Hill insider. His accomplishments, while noteworthy and substantial, did nothing to counteract the nation's lurch to the right. He chose to work in the comfortable, clubby confines of senate while his team desperately needed a public leader. Perhaps, given the times and trends (though with Watergate, Reagan and his hoodlums, Iraq and Katrina, the Democrats certainly have had some cards to play), Kennedy drew a Mission Impossible; but unlike the TV and movie versions, Kennedy chose not to accept it.

Renowned as an orator, it's fitting that Kennedy's best known words have come in tragedy and defeat. There's this beautiful tribute in the eulogy for Robert Kennedy: "As he said many times, in many parts of this nation, to those he touched and who sought to touch him: 'Some men see things as they are and say why. I dream things that never were and say, why not'?"

After Carter whipped his ass, Kennedy told the 1980 Democratic National Convention, "The work goes on, the cause endures, the dream will never die." In his electrifying appearance at last year's Democratic Party convention, the stricken Kennedy, whose early support helped Barack Obama secure the presidential nomination, said, "The work begins anew, the hope rises anew, the dream lives on."

Because of Kennedy's own failures and flaws, so much of what he stood for remains nothing more than a dream.

http://www.atimes.com/atimes/Front_Page/KH29Aa01.html

Tale of Two Economies

Tale of Two Economies

How well corporations have fared in the recovery depends largely on two factors.

1) How much cash on hand they had and how conservative they were heading into the recession

2) How much Uncle Sam (taxpayers) bailed them out

The Wall Street Journal has the story in Halting Recovery Divides America in Two.

The U.S. recovery is a tale of two economies.

At one extreme of Corporate America is a cadre of companies and banks, mostly big, united by an enviable access to credit. At the other end are firms, chiefly small, with slumping sales that can't borrow or are facing stiff terms to do so.

On Main Street, there are consumers with rock-solid jobs -- but also legions of debt-strapped individuals struggling to keep their noses above water.

This split helps explain the patchiness of the recovery that appears to be taking hold after the worst recession in a half-century.

The split between companies that can borrow and those that can't shows the extent to which any recovery depends on reviving the nation's ailing banks and squeamish credit markets. Until that happens, the vigor of the economy will remain in doubt.

"If you're not making money, you need to borrow money," says John Graham, a finance professor at Duke University's Fuqua School of Business. But "you need to be creditworthy in order to borrow, and if you're not making money, you're creditworthiness isn't very strong."

Mr. Graham, who oversees a quarterly survey of CFOs, says more companies are doing better than they were a few months ago. Still, he estimates, one in four is in "dire straights due to lack of profits combined with not being able to borrow."

Companies big enough to bypass banks and go directly to capital markets are finding a warmer reception. That's because the markets are showing more willingness to make risky loans: In January, only eight of the 56 companies that sold bonds were rated below-investment-grade, or "junk," according to Dealogic. In August, by contrast, 24 of the 60 deals had junk ratings.

Since the start of the year, companies have been increasingly turning to the bond markets to raise money. Through August thus far, companies have issued $395.4 billion in bonds over 512 deals, according to Dealogic, a healthy increase from the second half of last year when the markets went months with fewer offerings and less than a handful of junk bond deals.



In the business of finance itself, a divide between early winners and others appears to be opening up as well. Many of the nation's biggest financial institutions, benefiting from federal-government backing, have been able to raise equity and debt from private investors. Some large money-management companies such as BlackRock Inc. are profiting by helping the Treasury with the clean-up from the burst bubble.

Some of the nation's largest banks could, in fact, emerge from the crisis stronger than they entered it. While they have suffered huge losses on complex financial products, and are still facing mounting loan defaults, they were stabilized with tens of billions of dollars of taxpayer money. In the second quarter, the seven largest commercial banks earned more than $14 billion, even as thousands of smaller banks were in the red.

Big lenders are currently enjoying an advantage in their "cost of funds" -- the raw material of a bank, which is in the business of borrowing cheaply and lending at a higher rate. The handful of banks with more than $10 billion in assets were paying 1.18% to borrow money in the second quarter, the FDIC said in data issued Thursday. By contrast, banks with $100 million and $1 billion in assets were paying 1.97%, a big difference in a business where tenths of a percentage point translates into millions of dollars in profits.

As of June 30 the three largest banks -- Bank of America, Wells Fargo, and J.P.Morgan -- collectively had $2.3 trillion in domestic deposits, or 31% of the industry total, according to the Federal Deposit Insurance Corp. Two years earlier, the top three had only 20% of the industry total.

There is much more in the article including some winners and losers. Panera Bread, having no debt is a winner. Panera franchisees have a tougher go.

And the biggest of big banks, Bank of America, Wells Fargo, and J.P.Morgan appear to be doing well thanks to bailouts and low costs of funds. Because those banks are regarded as "well capitalized" they pay a smaller insurance rate to the FDIC. "Regarded" is the key word. They can continue to be regarded as "well capitalized" but commercial real estate loans, credit card defaults, and pay option ARMs problems are the 800 pound gorillas in the room.

When it comes to deposits, the big got bigger. Too big to fail is now "Too Bigger To Fail".

However, as long as the corporate bond market holds together, equities will fetch a bid. How much longer that can last is anyone's guess. I suspect not much longer. The pool of greater fools is not unlimited.

In the meantime ponder the key sentence in the article by Mr. Graham, who oversees a quarterly survey of CFOs "one in four [businesses] is in dire straits due to lack of profits combined with not being able to borrow."

That is in addition to: Greater Than One in Four FDIC Insured Institutions are Unprofitable; Bank Problem List at 15 Year High.

The best all this world record stimulus could do is create a bifurcated economy leaving one in four businesses and banks on the brink of disaster. Meanwhile there is no recovery in jobs, and no relief for cash strapped consumers.

In due time this "recovery" is going to start flying apart.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Orwellian Madness "Bernanke Saved The World"

Orwellian Madness "Bernanke Saved The World"

The MarketWatch Headline Bernanke: We Saved The World is the height of Orwellian madness.



Please consider the "full story" We saved the world from disaster, Fed's Bernanke says.

In a speech at the Kansas City Fed's annual retreat in Jackson Hole, Wyo., Bernanke summarized a hellish year and explained modestly how he and his central bank colleagues saved the world from a bigger disaster.

"The world has been through the most severe financial crisis since the Great Depression," he said. "As severe as the economic impact has been, however, the outcome could have been decidedly worse."

If the Fed, other central banks and other government leaders hadn't acted in a coordinated and aggressive way in September and October of 2008, "the resulting global downturn could have been extraordinarily deep and protracted," Bernanke said.

The policy response "averted the imminent collapse of the global financial system, an outcome that seemed all too possible to the finance ministers and central bankers."

Reflections on a Year of Crisis

To be fair to Bernanke, he never directly claimed to have "Saved The World". That is a trumped-up headline by MarketWatch.

Here is the key snip from his Jackson Hole speech Reflections on a Year of Crisis.

Since we last met here, the world has been through the most severe financial crisis since the Great Depression. The crisis in turn sparked a deep global recession, from which we are only now beginning to emerge.

As severe as the economic impact has been, however, the outcome could have been decidedly worse. Unlike in the 1930s, when policy was largely passive and political divisions made international economic and financial cooperation difficult, during the past year monetary, fiscal, and financial policies around the world have been aggressive and complementary. Without these speedy and forceful actions, last October's panic would likely have continued to intensify, more major financial firms would have failed, and the entire global financial system would have been at serious risk. We cannot know for sure what the economic effects of these events would have been, but what we know about the effects of financial crises suggests that the resulting global downturn could have been extraordinarily deep and protracted.

Although we have avoided the worst, difficult challenges still lie ahead. We must work together to build on the gains already made to secure a sustained economic recovery, as well as to build a new financial regulatory framework that will reflect the lessons of this crisis and prevent a recurrence of the events of the past two years. I hope and expect that, when we meet here a year from now, we will be able to claim substantial progress toward both those objectives.

Serious Risk vs. Saved the World

There is a difference between "Serious Risk" and "Saving the World". However, that is as far as I will go in defending Bernanke. It is important to understand that we are in this crisis because of the policies of Central Bankers in general and the Greenspan and Bernanke Fed in particular.

Both Greenspan and Bernanke have fostered an environment that threw money at every problem. The worldwide credit boom and housing bubbles were a direct result of Central Bank policies. Thus, giving credit to Bernanke is like giving credit to a doctor for amputating a cancerous limb after mistakenly cutting off three perfectly healthy limbs.

The difference between the Greenspan's alleged "success" and Bernanke's struggle to save the world is Greenspan had a wind of consumers' willingness to go deeper in debt blowing at his back. Bernanke has the wind of boomers fearing retirement in the midst of falling home prices and impaired bank balance sheets blowing stiffly in his face.

That difference is immense. For further discussion of the problems facing Bernanke and how little power the Fed really has when consumer attitudes have changed, please see Belief In Wizards Runs Deep.

Bernanke's Self-Promotion Self-Vindication Campaign

Bernanke's Jackson Hole speech is part of his campaign for re-appointment to the Fed. Previously, Bernanke had a cream-puff interview with 60 minutes as well as three fluff installments on "The NewsHour with Jim Lehrer" as discussed in Bernanke Goes On Self-Promotional Media Blitz.

Bernanke's media blitz is as galling as it is unprecedented. No Fed chairman in history has openly or brazenly campaigned for reappointment.

The most galling thing is that nowhere along the way did Bernanke ever mention his role, the Fed's role, or central banker's role in general for creating this crisis.

Did The Fed Really Save The World?

Even Bernanke admits that "We cannot know for sure what the economic effects of these events would have been ..." thus we still cannot be sure if his policy actions were correct. Indeed some highly respected individuals suggest they were the wrong thing to do.

Elizabeth Warren On The Policy Response

Visit msnbc.com for Breaking News, World News, and News about the Economy


Please listen to that sobering interview, in entirety. It is about 9 minutes long. Elizabeth Warren rips PPIP (the public-private investment plan) to shreds, and questions the policy responses that have still left toxic assets on the balance sheets of banks.

Warren: ".... In addition to what we've got with the toxic assets, we've got a real problem coming on commercial mortgages.... looking ahead to 2010, 2011, 2012 we are potentially looking at 50-60% default rates. This is a very significant problem concentrated with intermediate and smaller banks"

My favorite exchange starts just after the 7 minute mark.

MSNBC: In hindsight was Paulson right? If Congress did not write that $700 billion check would banks have collapsed?

Warren: I have to say I think there would have been some real pain. There are some businesses today that are alive that would have been wiped out. However, I am just not convinced at all that we would have gone into a death spiral"

MSNBC: With the facts he knew at the time, was it the right call?

Warren: (struggling to be polite) "You know, let me say it this way. The question about whether or not the world as we know it has ended, depends on what you think the world is as we know it. If you think the world as we know it, are a handful of huge financial institutions, the dinosaurs that roamed the earth, then you're right. They are not going to exist without huge infusions of government money. On the other hand if what you really believe is that our economy and our world is 115 million American households you start to see it very differently. And you say, you know if the dinosaurs are gone there are still a lot of stuff to be done.

High Praise For Elizabeth Warren

I have high praise for Warren. It takes a lot of courage to say what she did on the record. Moreover, I am certain she is correct about what she hints the real world is: American households and a large consortium of small to mid-sized banks as opposed to a few dinosaurs that ought to be extinct.

Bernanke Saved The Dinosaurs

Bernanke did not "save the world". All Bernanke did was prolong the lives of a few ailing dinosaurs at great expense to US taxpayers.

Elizabeth Warren, not Bernanke should have given a speech at Jackson Hole.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

http://globaleconomicanalysis.blogspot.com/2009/08/orwellian-madness-bernanke-saved-world.html

Sunday, August 30, 2009

The US public largely opposes America's foreign wars and economic meddling. They need a voice in US foreign policy

We don't want to rule the world

The US public largely opposes America's foreign wars and economic meddling. They need a voice in US foreign policy

Strategic Communications and the Graveyard of Empires - John Brown, Huffington Post

Strategic Communications and the Graveyard of Empires - John Brown, Huffington Post: "So [to paraphrase Special Representative to Pakistan and Afghanistan Richard Holbrooke] 'whatever it is called' -- public diplomacy, or public affairs, or psychological warfare, propaganda or (if you really want to be blunt) strategic communications -- appears to be an essential element in the administration's 'necessary war' (as President Obama recently called it) [in Afghanistan]. Right? Not quite, if at all. Enter Admiral Mullen. In a three-page Joint Force Quarterly article that received considerable media attention this week, he made it bluntly clear that he's not fan of 'strategic communications.' 'Frankly,' he notes, 'I don't care for the term.'" See also (1) (2)

http://www.huffingtonpost.com/john-brown/strategic-communications_b_271977.html

Teddy Kennedy the Hollow Champion By ALEXANDER COCKBURN

Teddy Kennedy the Hollow Champion
By ALEXANDER COCKBURN
Teddy Kennedy's disasters were vivid. His legislative triumphs, draped in this week's obituaries with respectful homage, were far less colorful but they were actually devastating for the very constituencies – working people, organized labor – whose champion he claimed to be.
He had the most famous car accident in political history when he drove off a wooden bridge on Chappaquiddick Island in July 1969, saying later that he had failed in several attempts to dive down 10ft to rescue Mary Jo Kopechne, a former aide of his dead brother Robert. She was in the back seat and drowned.
Ted quit the scene and called in standby Kennedy speechwriters instead of the police, a misdemeanor which cost him a two-month suspended sentence and any chance of ever following his brother Jack into the White House.
He made only one overt bid for the presidency and that was a colorful disaster too. He challenged the Democratic incumbent, Jimmy Carter, then seeking20re-election in 1980. After three years, the left in the Democratic Party was bitterly disappointed in Carter's cautious centrism and Kennedy placed himself in the left's vanguard, declaring in a famous speech that "sometimes a party must sail against the wind".
In those days I was reporting on national politics for the Village Voice and Rolling Stone and covered Kennedy's bid. It got off to a shaky start when Roger Mudd of NBC, a well-known political r eporter and TV newscaster, asked Ted on prime time why he wanted to be president. The thirty seconds of silence that followed this easy lob didn't help Kennedy's chances.
The campaign plane shot backwards and forwards across America, seeking photo opportunities. On one typical morning we left Washington DC at 6am and headed for the rustbelt where Kennedy stood outside a shuttered Pittsburgh steel mill and pledged to get the steel industry back on its feet. We shot west to Nebraska so Kennedy could stand in front of a corn silo and swear allegiance to the cause – utterly doomed - of the small family farmer. Then we doubled back to New York so he could stand on a street corner in a slum neighborhood in the Bronx and promise a better deal for urban blacks and Hispanics.
I asked one of Kennedy's campaign people why they didn't simply equip a studio in20Washington with the necessary backdrops – steel mill, silo, urban wasteland – but he said it wouldn't be honest. As things were, the locations we flew to may have been genuine, but the campaign pledges were as dishonest as a studio backdrop, which is why Kennedy – bellowing out his speeches like a mammoth stuck in a swamp - sounded utterly fake.
By 1980 the die was cast. Disdaining the leftward option offered by George McGovern in 1972, the Democratic Party had thrown in its lot decisively with Wall Street, and the big players across the American corporate landscape. The labor unions and the other foot-soldier constitu encies of the Party, would be flung rhetorical bouquets with decreasing fervor every four years.
Though the obituarists have glowingly evoked Kennedy's 46-year stint in the US Senate and, as 'the last liberal', his mastery of the legislative process, they miss the all-important fact that it was out of Kennedy's Senate office that came two momentous slabs of legislation that signalled the onset of the neo-liberal era: deregulation of trucking and aviation. They were a disaster for organized labor and the working conditions and pay of people in those industries.
The theorists of deregulation were Stephen Breyer who was Kennedy's chief counsel on the Senate Judiciary Committee and Alfred Kahn, out of Cornell. Prominent on Kennedy’s dereg team was David Boies. Breyer now sits on the US Supreme Court, an unswerving shill for the corporate sector.
In the mid to late 1970s these Kennedy rent-a-thinkers began to tout deregulation as the answer to low productivity and bureaucratic and corporate inertia. Famous at that time was a screed by Breyer, then a Harvard Law School professor, quantifying such things as environmental pollution in terms of assessable and fungible “risks” which could be bought and sold in the market place. (The Natural Resources Defense Council, adorned by Ted’s nephew, Robert Kennedy Jr., has long espoused this disastrous approach.)
The two prongs of Kennedy’s deregulatory attack – later decorated with the political label “neo-liberalism” – were aimed=2 0at airlines and trucking, and Kennedy’s man, Alfred Kahn was duly installed by Jimmy Carter at the Civil Aeronautics Board to introduce the cleansing winds of competition into the industry. By and large, airline deregulation went down well with the press and, for a time, with the public, who rejoiced in the bargains offered by the small fry such as People’s Express, and by the big fry striking back. The few critics who said that=2 0within a few years the nation would be left with five or six airlines, oligopoly and higher fares, were mostly ignored.
No one ever really wrote about the terrible effects of trucking deregulation outside the left press. It was certainly the most ferocious anti-labor move of the 1970s, with Kennedy as the driving force. Some of Kennedy’s aides promptly reaped the fruits of their legislative labors, leaving the Hill to make money hand over fist trying to break unions on behalf of Frank Lorenzo, the Texan entrepreneur who ran the Texas Air Corporation and its properties, Continental Airlines and its subsidiary, Eastern.
Did Kennedy fight, might and main, against NAFTA? No. As Steve Early relates in his piece on this site today, he was for it and helped Clinton ratify the job-losing Agreement. Then he put his shoulder behind GATT, parent of the World Trade Agreement.
We also have Kennedy to thank for 'No Child Left Behind' – the nightmarish education act pushed through in concert with Bush Jr's White House, that condemns children to a treadmill of endless tests contrived as "national standards".
And it was Kennedy who was the prime force behind the Hate Crimes Bill, aka the Matthew Shepard Act, by dint of which America is well on its way to making it illegal to say anything nasty about gays, Jews, blacks and women. "Hate speech," far short of any direct incitement to violence, is on the edge of being criminalized, with the First Amendment going the way of the dodo.
The deadly attacks on the working class and on organized labor are Ted Kennedy’s true monument. But as much as his brothers Jack and Bobby he was adept at persuading the underdogs that he was on their side. If it hadn’t been for Kennedy, a lot more people would have health coverage . In 1971 Nixon, heading into his relection bid, put up the legislative ancestor of all recent Democratic proposals, but Kennedy shot it down, preferring to have this as his campaign plank sometime in the political future.
After reelection, Nixon did promote a health plan in his 1974 State of the Union speech, with a call for universal access to health insurance. He followed up with his Comprehensive Health Insurance Act on February 6, 1974. Nixon said his plan would build on existing employer-sponsored insurance plans and would provide government subsidies to the self-employed and small businesses to ensure universal access to hea lth insurance. Kennedy went through the motions of cooperation, but in the end the AFL-CIO, with a covert nudge from Kennedy, killed the bill because Nixon was vanishing under the Watergate scandal and the Democrats did not want to hand the President and the Republicans one of their signature issues. Now the Republicans scream “socialism” at exactly what Nixon proposed and Kennedy killed off 38 years ago, in 1971.
To this day there are deluded souls who argue that Jack was going to pull US troops out of Vietnam and that is why he was killed; that Bobby, who worked for Roy Cohn and supervised a "Murder Inc" in the Caribbean, was really and truly on the side of the angels; that Ted was the mighty champion of the working people, even though he helped deliver them into the inferno of neoliberalism.
By his crucial endorsement last year he helped give them Obama too, now holidaying six miles from Chappaquiddick, on Martha's Vineyard, another salesman for the inferno. But because his mishaps were so dramatic, few remember quite how toxic his political “triumphs” were for those who now foolishly mourn him as their lost leader.

http://www.counterpunch.org/cockburn08282009.html

Steve Early
Kennedy's Sins Against Labor
http://www.counterpunch.org/early08282009.html

Hummel: The US Will Default On Its Debt

Hummel: The US Will Default On Its Debt: The flood of debt that the US is taking on in its efforts rescue to economy will combine with huge social insurance obligations--Medicare, MedicaidSocial Security--to create an unsustainable level of public indebtedness, economist Jeffrey Rogers Hummel argues in at length here.

http://www.businessinsider.com/hummel-the-us-will-default-on-its-debt-2009-8

Here's the scary conclusion:

It is not literally impossible that the Federal Reserve could unleash the Zimbabwe option and repudiate the national debt indirectly through hyperinflation, rather than have the Treasury repudiate it directly. But my guess is that, faced with the alternatives of seeing both the dollar and the debt become worthless or defaulting on the debt while saving the dollar, the U.S. government will choose the latter. Treasury securities are second-order claims to central-bank-issued dollars. Although both may be ultimately backed by the power of taxation, that in no way prevents government from discriminating between the priority of the claims. After the American Revolution, the United States repudiated its paper money and yet successfully honored its debt (in gold). It is true that fiat money, as opposed to a gold standard, makes it harder to separate the fate of a government's money from that of its debt. But Russia in 1998 is just one recent example of a government choosing partial debt repudiation over a complete collapse of its fiat currency.

Memo to Bernanke: "No Wage Growth; No Recovery"

Memo to Bernanke:
"No Wage Growth; No Recovery"

By Mike Whitney

It should be fairly obvious by now that US consumers are undergoing a generational shift and will not be able to lead the way out of the recession as they have in the past. Nor will they miraculously "bounce back" and provide demand for products made abroad. Continue

http://www.informationclearinghouse.info/article23378.htm

Torturing Morality By William Pfaff

Torturing Morality

By William Pfaff

Let us honor Eric H. Holder, Jr. – the only responsible official in two administration to say that torture is evil, criminal, and in a nation governed by law must be prosecuted, if the national integrity is to be vindicated. Continue

http://www.informationclearinghouse.info/article23377.htm

Cindy Sheehan's Lonely Vigil in Obamaland By JOHN V. WALSH

Cindy Sheehan's Lonely Vigil in Obamaland

By JOHN V. WALSH

Obama is an enormous gift to the Empire. Just as he has silenced most of the single-payer movement, an effort characterized by its superb scholarship exceeded only by its timidity, Obama has shut down the antiwar movement, completely in thrall as it is to the Democrat Party and Identity Politics. Continue

http://www.informationclearinghouse.info/article23379.htm

Obama is an enormous gift to the Empire. Just as he has silenced most of the single-payer movement, an effort characterized by its superb scholarship exceeded only by its timidity, Obama has shut down the antiwar movement, completely in thrall as it is to the Democrat Party and Identity Politics. Why exactly the peace movement has caved to Obama is not entirely clear. Like the single-payer movement, it is wracked by spinelessness, brimming with reverence for authority and a near insatiable appetite to be “part of the crowd.” Those taken in by Obama’s arguments that the increasingly bloody and brutal AfPak war is actually a “war of necessity,” should read Steven Walt’s easy demolition of that “argument.” (2) Basically Obama’s logic is the same as Bush’s moronic rationale that “We are fighting them over there so we do not have to fight them over here.” There is a potential for “safe havens for terrorists,” as the Obamalogues and neocons like to call them, all over the world; and no one can possibly believe the US can invade them all. However, the ones which Israel detests or which allow control of oil pipelines or permit encirclement of China and Russia will see US troops sooner or later.

See: http://original.antiwar.com/justin/2009/08/23/war-coverage-and-the-obama-cult/

See:http://walt.foreignpolicy.com/posts/2009/08/18/the_safe_haven_myth

Thanks to the Deficit, the Buck Stops Here By Joseph E. Stiglitz

Thanks to the Deficit, the Buck Stops Here
By Joseph E. Stiglitz
Sunday, August 30, 2009

Beware of deficit fetishism.

Last week we learned that the national debt is likely to grow by more than $9 billion. That's not great news -- no one likes a big deficit -- but President Obama inherited an economic mess from the Bush administration, and the cleanup comes with an inevitably high price tag. We're paying it now.

There are no easy options. When financial crises strike, economic growth declines and living standards drop, resulting in lower tax revenues and greater need for government assistance -- all of which leads to higher fiscal imbalances.

What really matters is not the size of the deficit but how we're spending our money. If we expand our debt in order to make high-return, productive investments, the economy can become stronger than if we slash expenditures.

There are other consequences, however, that we're missing in the debate over all this red ink. Our budget deficit, as well as the Federal Reserve's ballooning lending programs and other financial obligations, will accelerate a process already well underway -- a changing role for the U.S. dollar in the global economy.

The domino effect is straightforward: Higher deficits spark market concerns over future inflation; concerns of inflation contribute to a weaker dollar; and both come together to undermine the greenback's role as a reliable store of value around the world. Right now, with so much unused capacity in the American economy and so much unemployment -- likely to persist for at least another year or two -- the more pressing worry is deflation (a general decrease in prices), not inflation. But as the economy eventually recovers, the possibility of inflation will loom, and with forward-looking markets, worries about the future often play out in the present. Anxieties about future inflation can lead to a weaker dollar today.

So, are these anxieties justifiable? And what do they portend for the global financial system?

The worries are justified, even though Fed Chairman Ben Bernanke, recently nominated for another four-year term, assures us that he will deftly manage monetary policy to keep the economy on an even kilter. This is a tough balancing act -- move too quickly or too vigorously, and you plunge the economy into another downturn; too slowly or too weakly, and inflation can be unleashed. Anyone looking at the Fed's record in recent years will be skeptical of its forecasting skills and its ability to get the balance right.

In addition, international markets understand that the United States may face strong incentives to reduce the real value of its debts through inflation, which makes each dollar owed worth less. If market players are worried about inflation (or even if they are worried that others might be worried) that is bad news for the dollar. Holding dollars today represents risk without reward: The returns to U.S. Treasury bills are near zero, and even those most confident in the Federal Reserve must acknowledge the chance that things will not go smoothly.

For decades, other nations have held dollars in their central bank reserves, seeking to give confidence to their country and currency. But in a globalized economy, why should the entire financial system depend on the vagaries of what happens in America?

The current system is not only bad for the world, it is bad for the United States, too. In effect, as other countries hold more dollar reserves, we are exporting T-bills rather than automobiles, and exporting T-bills doesn't create jobs. We used to offset this drag on the economy by running a fiscal deficit. But going forward, we won't find it as easy to do this. And the Fed may not be able to do the trick -- as we have learned, expansionary monetary policy poses its own risks.

Like it or not, out of the ashes of this debacle a new and more stable global reserve system is likely to emerge, and for the world as a whole, as well as for the United States, this would be a good thing. It would lead to a more stable worldwide financial system and stronger global economic growth. The current system entails developing countries putting aside hundreds of billions of dollars a year -- only weakening global demand and contributing to our economic difficulties. Also, there is something a little unseemly about poor countries lending the United States trillions of dollars, now at an interest rate of close to zero.

Discussions on the design of the new system are already underway. The United Nations' Commission of Experts on Reforms of the International Monetary and Financial System -- a body I chaired and which included economists, former and current government officials, financial sector participants, central bankers, and business leaders from Asia, Europe, the United States, Africa, and Latin America -- has argued that a new global reserve currency system may be the most important reform to ensure the long-term health of the world's economy; it also suggested how to design an orderly transition from the dollar-based system.

In its interim report in June, the commission described a number of alternatives. Some involve building on the International Monetary Fund's "special drawing rights," or SDRs -- a kind of "IMF money" -- but making the issuance of this global reserve money annual and more predictable. (Currently, issuances of SDRs are small and episodic.) Other proposed reforms are more complex and ambitious, such as issuing new global reserves in ways and amounts that could be used to stabilize the world's economy or to invest in "global public goods," such as helping developing nations reduce greenhouse gas emissions.

The United States has resisted these changes, but they will come regardless, and it's better for us to participate in the construction of a new system than have it happen without us. The United States has seen great advantages with the dollar as the world's reserve currency of choice, particularly the ability to borrow at low interest rates seemingly without limit. But we haven't seen the costs as clearly: the inevitable trade deficits, the instability, the weaker global economy. The benefits to us are likely to shrink, and rapidly so, as countries shift their holdings away from the dollar.

It is happening already, and the process is likely to accelerate. Chinese authorities, for example, have openly expressed concerns about the value of the country's vast dollar reserves. Not surprisingly, China and other nations holding lots of U.S. debt support efforts to build a new system.

America should show leadership in helping shape this new structure and managing the transition, rather than burying its head in the sand. We may have preferred to keep the old system, in which the dollar reigned supreme, but that's no longer an option.

Joseph E. Stiglitz, the 2001 Nobel Prize winner in economics, is a professor of economics at Columbia University and former chairman of the Council of Economic Advisers during the Clinton administration.

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/28/AR2009082802111_2.html

Friday, August 28, 2009

In Re: The Crusader" By Philip Gold

Winslow Wheeler's career as a military reformist author and commentator, along with his thoughts for the future of defense reform, were the subject of Philip Gold's column in Washington Law and Politics.

"In Re: The Crusader" was first published by Washington Law & Politics and is reproduced below.

"In Re: The Crusader"
By Philip Gold

Were Washington, D.C., a walled city (which in many ways it is), there would be a sign above the gate warning newcomers: “YOU WILL RUN OUT OF PEARLS LONG BEFORE WE RUN OUT OF SWINE.”

And perhaps nowhere are the swine more swinish than in the military-industrial-Congressional empire, or MICE. Still, this column is not about swinish mice or mousy swine, numerous though they be. It’s about a man who, since 1971, has been tossing pearls.

And who remains optimistic.

Winslow Wheeler arrived on Capitol Hill in 1971. He left in 2002 after splitting three decades between the Government Accountability Office (formerly General Accounting Office) and the Senate: defense analyst at the GAO; in the Senate, legislative assistant to four senators, Republican and Democrat, and a final stint as a Republican staffer on the Senate Budget Committee. In the 1980s, he became active in the bipartisan, bicameral Congressional Military Reform Caucus; arguably, he knows as much about the defense budget as anyone who has worked in the field and kept his or her sanity. He has also been, for many years, a public crusader against pork-and against those who pose as guardians of the trough but in reality abide by that old Congressional maxim “To get along, go along.”

In the late 1990s, Wheeler began writing under the not-very-secure pseudonym “Spartacus.” His work circulated privately and on the Internet. Spartacus gained influence and, inevitably, made enemies. In 2002, he wrote “Mr. Smith Is Dead: No One Stands in the Way as Congress Lards Post-September 11 Defense Bills with Pork.” The piece named names and got into specifics. Self-styled “pork buster” John McCain decided to get Wheeler fired. Wheeler resigned and went to work at the Center for Defense Information, a left-of-center D.C. think tank founded by a repentant admiral that ever since has played host to disgruntled retired senior officers and some of the better analysts around. In 2004, Wheeler reprised “Mr. Smith” with a devastating Washington Post commentary, “Don’t Mind If I Do,” that re-skewered McCain. The article was still kicking around during the 2008 campaign.

Wheeler subsequently wrote two books, The Wastrels of Defense: How Congress Sabotages U.S. Security and Military Reform: A Reference Handbook, and edited a 2008 anthology, America’s Defense Meltdown: Petagon Reform for President Obama and the New Congress. Of late, he and fellow defense reformer Pierre Sprey have been taking on the F-35 Lightning II fighter, just one of many horrifically over-budget, endlessly behind-schedule and militarily questionable items in the Pentagon’s current inventory of maybe-someday and never-enough.

I recently had occasion to review Wheeler’s work for my next book, Closing Ranks: The Citizen’s Guide to a New Defense (Praeger, December 2009) and decided to chat him up. I expected an embittered man, as many of the 1970s and ’80s old defense reformers now are, some ostentatiously so. I found instead a citizen not averse to speaking in clear English but also surprisingly upbeat.

On interview day (May 12), Wheeler offered an unexceptional analysis of President Obama’s defense stance: “He’s very concerned [that] he presents a posture as a moderate and [does] not get savaged by the Republicans as an anti-defense Democrat.” He can neither take on the MICE full-frontally nor fold two dismal wars.

Wheeler’s assessment of Defense Secretary Robert Gates is more complex: “He’s a mixed bag. He has done nothing to change the nature of the Pentagon beast but has brought some discipline to OSD [Office of the Secretary of Defense]. He’s clearly in charge.” As proof, he cites Gates’ embargo on the FY 2010 defense budget until it was officially released and his refusal to let the services send their “wish lists” (items not in the budget request) to Congress without prior approval. Gates’ enforcement technique: Cross me and get fired.

But it’s a long legislative season, and, as the poet once wrote, “There’s many a slip ’twixt the zipper and the zip.” Wheeler does not discount the possibility that Congress will once again lard up the Pentagon’s allowance, but suggests that, if it gets out of hand, Gates could recommend a presidential veto. “Gates and Obama,” he concludes, “could shape their own battlefield if they have the guts to do it.”
Yet, unlike many defense analysts (myself included), Wheeler does not see much need for fundamental legislative change. Should we revisit the National Security Act of 1947 and its multitudinous amendments? “No,” he answers. “The people who would do it are buffoons.” He prefers three major changes within the present system:

• Bring down total defense spending to reflect real-world considerations, not the standard troika of plentiful pork, preposterous perils and purposeful procrastination.
• Use the pressure of less money to force the system to start making lots of previously avoidable hard choices.
• Provide an honest analytic and financial-management system that generates valid information, not the self-serving fantasies now used in the Department of Defense and Congress.

All this, he concludes, depends on having enough people with sufficient intelligence and integrity. He says, “Today’s Pentagon people are hopeless. We have to focus on human behavior, not cosmetic changes. Nothing in current law, regulation or structure requires people to make crooked or stupid decisions.”

True. But where are all these good people to be found? And how do you get the American people to take enough of an interest to force their legislators to get serious? There is virtually no organized constituency for defense reform outside certain policy and media circles; citizen hissy-fitting doth not a movement make. Those opposed to change are well organized, well funded and very, very intense. And the next election-there’s always a next election-is coming up.

Wheeler disagrees, and remains hopeful. “This is a new historical moment,” he says. “The experience of the 1980s shows that there is a huge mass constituency for reform, and when the politicians and the Pentagon feel the pressure, they’ll press for better angels. We will know that time is upon us when we see people leveraging decisions with information, not political dogma.”

Perhaps. From the vantage point of 2009, however, it is difficult to see the 1980s as enjoying any mass movement, as opposed to lots of muckraking publicity (not all of it accurate) and elite interest, or what fundamental and enduring changes that decade produced. Still, as the lottery people love to remind us, you can’t win if you don’t play. Citizens who wish to understand defense issues-and there is no defense issue whose contours the American people cannot understand-would do well to pay heed to what Winslow Wheeler and those like him are trying to tell us.

Thursday, August 27, 2009

"Charity in Truth.": Pope Benedict XVI on Economics by Richard C. Cook

"Charity in Truth.": Pope Benedict XVI on Economics

by Richard C. Cook
Life is a gift bestowed by God upon man.

Therefore each of us must adopt an attitude of giving in relation to all other men. This attitude must include activities involving the economic life of individuals, nations, and the world. Economics is not just a search for efficiency or profits. Such are among the lessons to be derived from Pope Benedict XVI's recent encyclical, Caritas In Veritate, "Charity in Truth."




The Pope writes, "Charity in truth places man before the astonishing experience of gift. Gratuitousness is present in our lives in many different forms, which often go unrecognized because of a purely consumerist and utilitarian view of life. The human being is made for gift, which expresses and makes present his transcendent dimension."

This remarkable document, which should be studied by every caring person, was published in June 2009. It has not been reviewed nearly as widely as it should, no doubt because most commentators regard it as a Catholic document of interest only to those within the Catholic Church. This is a profound mistake. In recent decades, the Catholic Popes, especially Pope John (1958-1963) and Pope John Paul II (1978-2005), have boldly taken on the role of providing spiritual guidance to the entire world that includes matters pertaining to economics. True, the Catholic Church has often not taken a sufficient stand for economic and social justice to satisfy many critics, but the fact is that the Church's position has generally been one in favor of economic democracy, fairer distribution of the earth's bounty, and an ethical dimension to political and economic decisions. This is in stark contrast to the wantonness whereby the world's richest people, institutions, and nations have increasingly lorded it over everyone else as the reach of globalism has accelerated.

Pope Benedict's Caritas In Veritate is in the modern tradition of Catholic social commentary. It is long--about 30,000 words. It must be read slowly and carefully. It lack specifics about the reforms the Pope says are needed. But it contains truth. It points out that man does not live by bread alone--that economic imperatives must take second place to what the Pope calls "integral human development." Returning to the concept of life as a gift, the Pope writes that, "Truth, and the love which it reveals, cannot be produced: they can only be received as a gift." Thus to become fully human requires man to be cognizant of his relationship to the source of Truth. This is the Absolute--God. This realization must be reflected in the world through a deep and abiding sense of responsibility of human beings toward each other. It leads to what the Pope calls "solidarity" among people, including relations between developed and underdeveloped nations and among social groupings within particular nations. Pope Benedict also points out that where globalization has shattered the ability and will power of nations to regulate economic life for the common good, a resurgence of such efforts at the level of the nation-state can and must be made. He does not view globalization as replacing nations or eliminating democracy, a word he uses favorably numerous times.

Caritas In Veritate is a vitally important contribution to making the world in the technological age a fit vehicle for human development, with technology being more than just a toy which disguises its ability to be abused as a weapon for further economic exploitation. Here is another excerpt:

“Love in truth — caritas in veritate — is a great challenge for the Church in a world that is becoming progressively and pervasively globalized. The risk for our time is that the de facto interdependence of people and nations is not matched by ethical interaction of consciences and minds that would give rise to truly human development. Only in charity, illumined by the light of reason and faith, is it possible to pursue development goals that possess a more humane and humanizing value. The sharing of goods and resources, from which authentic development proceeds, is not guaranteed by merely technical progress and relationships of utility, but by the potential of love that overcomes evil with good (cf. Rom 12:21), opening up the path towards reciprocity of consciences and liberties.”

The Pope speaks of the Church, but what he is saying contains a message for all of mankind. If taken seriously, the encyclical is potentially revolutionary. Its message is diametrically opposite to that of the "New World Order" espoused by the international financial elite as their primary method of enslaving mankind to a secular ideology of materialism. The Pope implies, by stating that "the environment is God's gift to everyone," that the materialistic ideology is rooted in the evil of the privatization of resources that really should belong to the public commons. He also mentions the traditional Catholic position on debt by stating that, "The weakest members of society should be helped to defend themselves against usury," though he does not get specific enough to question the fact that the world monetary system is collapsing because it is based on the creation of money through bank lending.

Some conservative Catholic commentators in the U.S. are very upset about the publication of the encyclical due to its progressive tenor. For them, as well as many Protestant fundamentalists, religion seems almost an excuse for the ongoing Western military crusade for world conquest so evident in the Middle East. Some go so far as to ridicule the encyclical as really being a product of a liberal faction in Rome's Pontifical Council for Justice and Peace and therefore subject to dismissal in its entirety as a fantasy of dreamers.

After all, Pope Benedict, formerly head of the Congregation for the Doctrine of the Faith, the successor organization to the Inquisition, was himself supposed to be a theological conservative. On the other hand, perhaps theological conservatism and economic justice really are interrelated. Perhaps theological conservatism is not the same thing as Western militaristic ethno-centrism.

Perhaps Pope Benedict means what he says, and that he and the Church intend to be separating themselves as clearly as the encyclical seems to do from the prevailing trends of world events in the age of globalism. Could the encyclical even be a sign that "Old Europe" is decisively separating itself from the face the Anglo-American military-financial-intelligence colossus has presented to the world over the past decade with its wars, invasions, and threats against such nations as Iraq, Afghanistan, Pakistan, Iran and even Russia?

Only time will tell. As it reads, Caritas In Veritate sounds a lot like Jesus chasing the money changers from the temple.

To read Caritas In Veritate on the Vatican's website click here:
http://www.vatican.va/holy_father/benedict_xvi/encyclicals/documents/hf_ben-xvi_enc_20090629_caritas-in-veritate_en.html

Richard C. Cook is author of We Hold These Truths: The Hope of Monetary Reform. His website is at http://www.richardccook.com

http://globalresearch.ca/index.php?context=va&aid=14912