An Emergency Bailout Plan That Americans Will Love

By Jonathan Tasini

30/09/08 "Working Life" -- There is a great economic emergency looming in our country. But, it seems to me that we—or at least our elected leaders—have only looked at one side of the crisis, that of the housing bubble-inspired financial credit crunch. By doing so, we’ve missed the bigger picture and the solutions needed. So, here is one person’s take on the Emergency Economic Bailout package that will heal the economy.

As quick background, let’s consider this:

24.5 percent of all Americans earn poverty wages ($9.60 or less)

10 percent of all Americans—15 million Americans—earn $6.79 or less

33.3 percent of African American works and 39.3 of Hispanic workers earn poverty wages.

The share of our entire national income hoarded by the top one percent is, as of 2005, 21.8 percent. The last time it was that high was in 1928 (23.9)—just as the Great Depression was about to hit with its full fury.

We accept poverty as a fact of life in this country—partly because workers have not gotten the fair share of their hard work over the past three decades (in Republican and Democratic Administrations). If productivity and wages had kept their historic link (meaning, as workers were more productive, that translated into higher paychecks), the MINIMUM WAGE in the country would be $19.12. Yes, $19.12.

At the recent new minimum wage of $6.55 an hour, if you worked every single day, 40 hours a week, with no vacations, no holidays, no health care and no pension, you would earn the grand sum of $13.624. The POVERTY LEVEL for a family of three is $17,600.

47 million Americans have no health care and tens of millions more have inadequate or costly health care that can bankrupt them.

Since 1978, the number of defined-benefit plans—that means, pensions that give retirees a promised monthly amount—plummeted from 128,041 plans covering some 41 percent of private-sector workers to only 26,000 today. It’s a Dog Food Retirement future for millions of people.

All those numbers above do relate to the more narrow crisis in a very specific way: without being able to rely on their paychecks to survive, a lot of people got sucked into the housing bubble mania as an economic coping mechanism. Home equity credit lines substituted for decent pay, retirement and affordable, quality health care. And we know the rest.

So, here is what I think is a more comprehensive economic rescue plan, all of which should be attached to any new "bailout" proposal:

1. Immediately raise the minimum wage to $10 an hour, with additional increases over the fives years following raising the minimum wage to $20, which will begin to return some justice and return to workers’ sweat of the brow.

2. Pass HR676, Medicare for All legislation to (Rep. John Conyers is the main sponsor of the bill). Aside from the moral issue of covering every single American and making health care a right not a privilege, it would save the economy hundreds of billions of dollars and immediately make American-based companies competitive around the world with companies operating from countries with national health care.

3. Create a national guaranteed universal pension plan, backed by the government, so people can be sure that their retirement years will not be threatened by the wild swings of Wall Street.

4. Repeal the Bush tax cuts now and raise the top two income tax rates to 40% and 45%, add a new 50% income tax bracket for those with taxable income over $1 million, and tax investment income as ordinary income. Frankly, that is pretty modest and should only be the first step in rediscovering a progressive taxation system—but it will still raise several hundred billion dollars this year to finance a variety of public investments. The very people who have enriched themselves in the deregulation orgy of the past couple of decades should pay to repair the country.

5. A couple of years ago, when I was involved in a little political race of my own, I latched on to this idea: a tiny transactions tax on stock sales. It would be so miniscule that the small investors would never feel it, say, 0.25 percent of the sale. It would raise about $150 billion. Wall Street benefits from government protections, not the least of which is a regulatory system (oh, there I go using that "regulation" word, which now seems to be back in vogue) that prevents, in theory, fraud and crazy speculation (ok, so that doesn’t always work out well). Plus, such a tax might also exercise some restraint, perhaps modest, on the wild and crazy big trades made on rumors and the thirst for a quick buck. But, the main point is shared responsibility. You live in this society and, so, you make a contribution. And that contribution is relatively modest and relatively painless.

6. The Employee Free Choice Act. There is no better middle-class jobs program than unionization. Period.

The point of these suggestions is not just moral but common, economic sense. The way to avoid, to some extent, speculation and crazy amounts of debt is to take away the victims that are preyed on by banks, unscrupulous investors and free-market pirates. If a person has a decent income, real health care, a secure retirement and a government that can invest in the country, he or she is less likely to feel the need to latch on to risky investments and get-rich-quick schemes (also known as day-trading).

My guess is the American people would feel pretty good about a deal that included the above. To those, I’d add two specific pieces about the current mess:

First, any investment of money in banks is done on a debt-for-equity swap. No bailouts. As Nouriel Roubini and my friend Dean Baker have both pointed out, there is no justification or economic logic to bailout banks as a solution to the crisis we find ourselves in. Roubini writes, in arguing that the buying up bad assets is the exception, not the rule, and:

So this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the financial firms (not just banks but also other non bank financial institutions); with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession. Instead, the restoration of the financial health of distressed financial firms could have been achieved with a cheaper and better use of public money.

Second, as I’ve argued, we should own Freddie Mac and Fannie Mae. We need those two huge institutions to be boring and predictable, not participating in crazy leveraging and speculation. The only we guarantee that is by installing publicly accountable board members who will run the companies for the benefit of homeowners, not profiteers.

Let's Look at the Effects of Pirvatizing War

I've been an ongoing critic of the free wheeling cronyism going on all over this administration, but particularly with the outrageous privatization of things historically done by the troops themselves. Things like logistics, meals, laundry, latrines and on and on. These things are now awarded, cost plus, no bid to friends of the administration, Halliburton, for example. This video is a story I'd seen before, but perhaps you haven't. It's time to put an end to this BS.

US Army Occupies the USA

Here's a piece from the Army Times describing how the Third Infantry's 1st Brigade Combat team will become the first ever dedicated Army unit assigned full time duties such as "crowd control" in the US. I, for one, find it more that a bit unnerving.

Brigade homeland tours start Oct. 1

3rd Infantry’s 1st BCT trains for a new dwell-time mission. Helping ‘people at home’ may become a permanent part of the active Army

By Gina Cavallaro - Staff writer
Posted : Monday Sep 8, 2008 6:15:06 EDT

The 3rd Infantry Division’s 1st Brigade Combat Team has spent 35 of the last 60 months in Iraq patrolling in full battle rattle, helping restore essential services and escorting supply convoys.

Now they’re training for the same mission — with a twist — at home.

Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.

It is not the first time an active-duty unit has been tapped to help at home. In August 2005, for example, when Hurricane Katrina unleashed hell in Mississippi and Louisiana, several active-duty units were pulled from various posts and mobilized to those areas.

But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.

After 1st BCT finishes its dwell-time mission, expectations are that another, as yet unnamed, active-duty brigade will take over and that the mission will be a permanent one.

“Right now, the response force requirement will be an enduring mission. How the [Defense Department] chooses to source that and whether or not they continue to assign them to NorthCom, that could change in the future,” said Army Col. Louis Vogler, chief of NorthCom future operations. “Now, the plan is to assign a force every year.”

The command is at Peterson Air Force Base in Colorado Springs, Colo., but the soldiers with 1st BCT, who returned in April after 15 months in Iraq, will operate out of their home post at Fort Stewart, Ga., where they’ll be able to go to school, spend time with their families and train for their new homeland mission as well as the counterinsurgency mission in the war zones.

Stop-loss will not be in effect, so soldiers will be able to leave the Army or move to new assignments during the mission, and the operational tempo will be variable.

Don’t look for any extra time off, though. The at-home mission does not take the place of scheduled combat-zone deployments and will take place during the so-called dwell time a unit gets to reset and regenerate after a deployment.

The 1st of the 3rd is still scheduled to deploy to either Iraq or Afghanistan in early 2010, which means the soldiers will have been home a minimum of 20 months by the time they ship out.

In the meantime, they’ll learn new skills, use some of the ones they acquired in the war zone and more than likely will not be shot at while doing any of it.

They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack.

Training for homeland scenarios has already begun at Fort Stewart and includes specialty tasks such as knowing how to use the “jaws of life” to extract a person from a mangled vehicle; extra medical training for a CBRNE incident; and working with U.S. Forestry Service experts on how to go in with chainsaws and cut and clear trees to clear a road or area.

The 1st BCT’s soldiers also will learn how to use “the first ever nonlethal package that the Army has fielded,” 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them.

“It’s a new modular package of nonlethal capabilities that they’re fielding. They’ve been using pieces of it in Iraq, but this is the first time that these modules were consolidated and this package fielded, and because of this mission we’re undertaking we were the first to get it.”

The package includes equipment to stand up a hasty road block; spike strips for slowing, stopping or controlling traffic; shields and batons; and, beanbag bullets.

“I was the first guy in the brigade to get Tasered,” said Cloutier, describing the experience as “your worst muscle cramp ever — times 10 throughout your whole body.

“I’m not a small guy, I weigh 230 pounds ... it put me on my knees in seconds.”

The brigade will not change its name, but the force will be known for the next year as a CBRNE Consequence Management Response Force, or CCMRF (pronounced “sea-smurf”).

“I can’t think of a more noble mission than this,” said Cloutier, who took command in July. “We’ve been all over the world during this time of conflict, but now our mission is to take care of citizens at home ... and depending on where an event occurred, you’re going home to take care of your home town, your loved ones.”

While soldiers’ combat training is applicable, he said, some nuances don’t apply.

“If we go in, we’re going in to help American citizens on American soil, to save lives, provide critical life support, help clear debris, restore normalcy and support whatever local agencies need us to do, so it’s kind of a different role,” said Cloutier, who, as the division operations officer on the last rotation, learned of the homeland mission a few months ago while they were still in Iraq.

Some brigade elements will be on call around the clock, during which time they’ll do their regular marksmanship, gunnery and other deployment training. That’s because the unit will continue to train and reset for the next deployment, even as it serves in its CCMRF mission.

Should personnel be needed at an earthquake in California, for example, all or part of the brigade could be scrambled there, depending on the extent of the need and the specialties involved.

Other branches included

The active Army’s new dwell-time mission is part of a NorthCom and DOD response package.

Active-duty soldiers will be part of a force that includes elements from other military branches and dedicated National Guard Weapons of Mass Destruction-Civil Support Teams.

A final mission rehearsal exercise is scheduled for mid-September at Fort Stewart and will be run by Joint Task Force Civil Support, a unit based out of Fort Monroe, Va., that will coordinate and evaluate the interservice event.

In addition to 1st BCT, other Army units will take part in the two-week training exercise, including elements of the 1st Medical Brigade out of Fort Hood, Texas, and the 82nd Combat Aviation Brigade from Fort Bragg, N.C.

There also will be Air Force engineer and medical units, the Marine Corps Chemical, Biological Initial Reaction Force, a Navy weather team and members of the Defense Logistics Agency and the Defense Threat Reduction Agency.

One of the things Vogler said they’ll be looking at is communications capabilities between the services.

“It is a concern, and we’re trying to check that and one of the ways we do that is by having these sorts of exercises. Leading up to this, we are going to rehearse and set up some of the communications systems to make sure we have interoperability,” he said.

“I don’t know what America’s overall plan is — I just know that 24 hours a day, seven days a week, there are soldiers, sailors, airmen and Marines that are standing by to come and help if they’re called,” Cloutier said. “It makes me feel good as an American to know that my country has dedicated a force to come in and help the people at hom

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A Bit of Fun

Here are some neat photos to amuse.

Capturing the Nanosecond

What is America

Here's an interesting comment from an Australian historian about his research on and take of the nature of America. It helps us understand our situation better when we get the views of informed citizens and scholars who aren't American.


what is America

If you want to hear what the difference is between American media and the rest of the world, have a listen to this interview from Radio New Zealand of an Austrialian historian whose book on the United States sounds very interesting. Have a listen.




What is America?

The Bailout Scheme

I've a lot of questions, totally unanswered about this scheme. We're simply told that it's critical we hand over an additional $700 billion to the rich, simply because they've apparently swindled themselves into massive losses. Seems to me that these were (poisoned, perhaps criminal) investments with no promise of long run returns. Those who took the risks should bear the risks. Anyway, this more of less concurring opinion from Salon.com


Leave aside for the moment whether this gargantuan nationalization/bailout scheme is "necessary" in some utilitarian sense. One doesn't have to be an economics expert in order for several facts to be crystal clear:

First, the fact that Democrats are on board with this scheme means absolutely nothing. When it comes to things the Bush administration wants, Congressional Democrats don't say "no" to anything. They say "yes" to everything. That's what they're for.

They say "yes" regardless of whether they understand what they're endorsing. They say "yes" regardless of whether they've been told even the most basic facts about what they're being told to endorse. They say "yes" anytime doing so is politically less risky than saying "no," which is essentially always and is certainly the case here. They say "yes" whenever the political establishment -- meaning establishment media outlets and the corporate class that funds them -- wants them to say "yes," which is the case here. And they say "yes" with particular speed and eagerness when told to do so by the Serious Trans-Partisan Republican Experts like Hank Paulson and Ben Bernake (or Mike McConnell and Robert Gates and, before them, Donald Rumsfeld and Colin Powell).

So nothing could be less reassuring or more meaningless than the fact that the Democratic leadership has announced that what they heard scared them so much that they are certain all of this is necessary -- whatever "all this" might be (and does anyone think that they know what "this" even is?). It may be "necessary" or may not be, but the fact that Congressional Democrats are saying this is irrelevant, since they would not have done anything else -- they're incapable of doing anything else -- other than giving their stamp of approval when they're told to.

Second, whatever else is true, the events of the last week are the most momentous events of the Bush era in terms of defining what kind of country we are and how we function -- and before this week, the last eight years have been quite momentous, so that is saying a lot. Again, regardless of whether this nationalization/bailout scheme is "necessary" or makes utilitarian sense, it is a crime of the highest order -- not a "crime" in the legal sense but in a more meaningful sense.

What is more intrinsically corrupt than allowing people to engage in high-reward/no-risk capitalism -- where they reap tens of millions of dollars and more every year while their reckless gambles are paying off only to then have the Government shift their losses to the citizenry at large once their schemes collapse? We've retroactively created a win-only system where the wealthiest corporations and their shareholders are free to gamble for as long as they win and then force others who have no upside to pay for their losses. Watching Wall St. erupt with an orgy of celebration on Friday after it became clear the Government (i.e., you) would pay for their disaster was literally nauseating, as the very people who wreaked this havoc are now being rewarded.

More amazingly, they're free to walk away without having to disgorge their gains; at worst, they're just "forced" to walk away without any further stake in the gamble. How can these bailouts not at least be categorically conditioned on the disgorgement of ill-gotten gains from those who are responsible? The mere fact that shareholders might lose their stake going forward doesn't resolve that concern; why should those who so fantastically profited from these schemes they couldn't support walk away with their gains? This is "redistribution of wealth" and "government takeover of industry" on the grandest scale imaginable -- the buzzphrases that have been thrown around for decades to represent all that is evil and bad in the world. That's all this is; it's not an "investment" by the Government in any real sense but just a magical transfer of losses away from those who are responsible for these losses to those who aren't.

And all of this was both foreseeable as well as foreseen -- see the 2002 grave warnings from Warren Buffett on pages 14-15 of his shareholders letter (.pdf), among many other things -- and it's also happened before, when the Federal Government bailed out the S&L industry that (with John McCain's help) was able to gamble recklessly and then force the country to protect them from their losses. The people who did this have no fear of anything -- they completely lack the kind of healthy fear that impedes reckless behavior -- because they know how our Government works and that they control it and thus believe that their capacity to suffer is limited in the extreme. And they're right about that.

What's most vital to underscore is that the beneficiaries of this week's extraordinary Government schemes aren't just the coincidental recipients of largesse due to some random stroke of good luck. The people on whose behalf these schemes are being implemented -- the true beneficiaries -- are the very same people who have been running and owning our Government -- both parties -- for decades, which is why they have been able to do what they've been doing without interference. They were able to gamble without limit because they control the Government, and now they're having others bear the brunt of their collapse for the same reason -- because the Government is largely run for their benefit.

If there is any "pitchfork moment" -- an episode that understandably would send people into the streets in mass outrage -- it would be this. Nobody really even seems to know how much of these losses "the Government" -- meaning working people who had no part in the profits from these transactions -- is undertaking virtually overnight but it's at least a trillion dollars, an amount so vast it's hard to comprehend, let alone analyze in terms of consequences. The transactions are way too complex even for the most sophisticated financial analysts to understand, let alone value. Whatever else is true, generations of Americans are almost certainly going to be severely burdened in untold ways by the events of the last week -- ones that have been carried out largely without any debate and mostly in secret.

Third, what's probably most amazing of all is the contrast between how gargantuan all of this is and the complete absence of debate or disagreement over what's taking place. It's not just that, as usual, Democrats and Republicans are embracing the same core premises ("this is regrettable but necessary"). It's that there's almost no real discussion of what happened, who is responsible, and what the consequences are. It's basically as though the elite class is getting together and discussing this all in whispers, coordinating their views, and releasing just enough information to keep the stupid masses content and calm.

Can anyone point to any discussion of what the implications are for having the Federal Government seize control of the largest and most powerful insurance company in the country, as well as virtually the entire mortgage industry and other key swaths of financial services? Haven't we heard all these years that national health care was an extremely risky and dangerous undertaking because of what happens when the Federal Government gets too involved in an industry? What happened in the last month dwarfs all of that by many magnitudes.

The Treasury Secretary is dictating to these companies how they should be run and who should run them. The Federal Government now controls what were -- up until last month -- vast private assets. These are extreme -- truly radical -- changes to how our society functions. Does anyone have any disagreement with any of it or is anyone alarmed by what the consequences are -- not the economic consequences but the consequences of so radically changing how things function so fundamentally and so quickly?

Other countries are debating it. The headline in the largest Brazilian newspaper this week was: "Capitalist Socialism??" and articles all week have questioned -- with alarm -- whether what the U.S. Government did has just radically and permanently altered the world economic system and ushered in some perverse form of "socialism" where industries are nationalized and massive debt imposed on workers in order to protect the wealthiest. If Latin America is shocked at the degree of nationalization and government-mandated transfer of wealth, that is a pretty compelling reflection of how extreme -- unprecedented -- it all is.

But there's virtually no discussion of that in America's dominant media outlets. All one hears is that everything that is happening is necessary to save us all from economic doom. And what's most amazing about that is that the Natural, Unchallenged Consensus That Nobody Questions can shift drastically in a matter of days and still nobody questions anything. This is what Atrios observed as I was writing this post:

It's fascinating to watch how easily consensus is manufactured. A few days ago elite opinion seemed to be cheering Paulson's "no bailout" line, and now they're cheering a trillion bucks thrown down the crapper. All the Very Serious People will spend their days coming up with their pony plans, oblivious to the fact that the pony plan is not an option. The Bush administration's plan is the option.

The way it works is that Bush officials decree how things will be, and then everyone -- from Congressional Democrats to the Serious Pundits -- jump uncritically and obediently on board, even if they were on board with the complete opposite approach just days earlier, and then all real dissent vanishes. That's how the country in general works. As Atrios says: "We've seen this game played before."

I don't pretend to know anywhere near enough -- in terms of either raw information or expertise -- in order to opine on the necessity or lack thereof of The Latest Plan in terms of whether the alternatives are worse. But what I do know is that an injustice so grave and extreme that it defies words is taking place; that the greatest beneficiaries are those who are most culpable; and that the same hopelessly broken and deeply rotted institutions and elite class that gave rise to all of this (and so much more) are the very ones that are -- yet again -- being blindly entrusted to solve this.

UPDATE: Here is the current draft for the latest plan. It's elegantly simple. The three key provisions: (1) The Treasury Secretary is authorized to buy up to $700 billion of any mortgage-related assets (so he can just transfer that amount to any corporations in exchange for their worthless or severely crippled "assets") [Sec. 6]; (2) The ceiling on the national debt is raised to $11.3 trillion to accommodate this scheme [Sec. 10]; and (3) best of all: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency" [Sec. 8].

Put another way, this authorizes Hank Paulson to transfer $700 billion of taxpayer money to private industry in his sole discretion, and nobody has the right or ability to review or challenge any decision he makes.

-- Glenn Greenwald

The Wall Street Crisis Explained

*** A short explanation of how we got to where we are

Today's banking crisis is the THIRD trillion dollar plus
US-caused financial meltdown in the last twenty years.

Each one of these crises came into being through the same basic
mechanism...the fraudulent over-valuing of financial assets by
Wall Street - with a "wink and a nod" (and sometimes a lot more)
from the White House and Congress.

The fraudulently valued assets stimulate the economy, impart
the illusion of health and then, inevitably, the fraud goes
too far and the whole house of card comes painfully crashing
back to earth.

The three trillion dollar plus frauds were:

Fraud #1: The so-called "Savings and Loan Crisis" of the late 80s

Fraud #2: The so-called "Tech Bubble" of the late 90s

Fraud #3: The so-called "Credit Crisis" of today

*** How the scam works

The mechanism of these frauds is simplicity itself...

...Take a shaky financial asset and blow up its value
and then sell as much of it as you can.

In the "Savings and Loan Crisis," the instrument was junk bonds.

In the "Tech Bubble" it was Internet stocks.

In the "Credit Crisis" it was individual mortgages collected
into pools and then re-sold to investors.

In each case, normal, well established "bread and butter"
financial principles were consciously thrown away by Wall Street
with no hint of protest from federal regulators.

***The "Savings and Loan Crisis" dissected

Junk bonds caused the Saving and Loan crisis which
resulted in the US taking over the assets of hundreds of
banks and selling them back over time to the marketplace
at fire sale prices.

Junk bonds, which caused the "Savings and Loan Crisis" were
shaky bonds that were pumped up by deliberate misrepresentation
and what I call "staged dealing."

Bonds get their value from two things: the amount of interest
they pay and how safe they are.

"Junk" bonds have to pay higher interest because they are less
safe. Therefore, until the "Savings and Loan Crisis," savings
and loan banks banks were not allowed by law to buy them and call
them assets.

Reagan/Bush changed all this and then a group of Wall Street
fraudsters used the new loophole to kick off an orgy of junk
bond creation and junk bond selling to banks and insurance
companies.

The crooks would deal the junk bonds back and forth
amongst themselves thereby establishing their "value"
and then they'd sell them to outsiders. The bonds
then became "assets" which could be borrowed against
and leveraged to buy even more bonds.

When the bonds failed, the banks failed and in stepped the
US government to "fix" the problem that it created at the cost
of at least one trillion dollars to US tax payers.

Deja vu, eh?

***The "Tech Bubble" dissected

The instrument of fraud in the "Tech Bubble" was Internet
stocks, start ups in particular.

A stock gets its value from the underlying company's sales,
its growth and its overall prospects for the future.

Pre-tech bubble, companies used to have to prove themselves
by being in existence for several years before they could
be sold on major exchanges. That standard was thrown away
during the tech bubble.

To pump of their values, the companies engaged in
"staged dealing" just like the junk bond crooks.

Company #1 would "sell" 20 million dollars in banner
ads to Company #2 which would in turn "sell" 20 million
in banner ads to Company #1.

In fact, nobody sold anybody anything. Company #2 ran
ads for Company #1 and billed it for them. Company #1
ran ads for Company #2 and billed for an equal amount.

These should have been called media trades not sales, but
Wall Street was happy to claim them as legitimate cash sales
and then use the sales numbers to fraudulently value these
companies - many of them totally worthless - in the
hundreds of millions and sometimes even the billions.

***The "Credit Crisis" dissected

By now, you see how the scheme works.

It's not complicated at all.

You take near worthless pieces of paper (junk bonds, stock
of start up Internet companies, etc.) and declare them to
be good as gold.

Then you create as many junk bonds and Internet start up
stocks as you get and sell them as fast as you can.

In the case of our current crisis, the instrument of fraud
was so-called sub-prime mortgages.

Previously, sub-prime mortgages had very little trading value.
Only people in the sub-prime industry itself dealt in them and for
good reason. They're tricky to value and packed with financial
peril.

But Wall Street changed all that.

Wall Street said: "If we take LOTS of these mortgages and assemble
them into large pools and then slice and dice the pools in various
ways, we can sell the slices to banks and other investors as AAA
paper."

It sounds crazy, doesn't it?

If the underlying pieces of paper are garbage, how does assembling
a whole bunch of garbage into one place make it "better?"

It doesn't, of course, and this is a principle even a three year
old child can understand.

But greed and the need to pump up a shaky economy for propaganda
purposes are two very strong motivators.

Banks created these mortgage pools, sold them to each other,
and they by virtue of these "staged sales" declared them valuable.

Do you recognize the pattern now?

If you do, then you are now smarter than all the assembled j@ck@sses
who do financial reporting because they apparently can't - or
won't.

This is the THIRD trillion-dollar plus fraud driven financial
meltdown in twenty years and apparently no one in the financial
news media can see how it happened.

***But there's more...

Junk bonds were mass manufactured as fast as the crooks could
invent them. Ditto for Internet stocks.

But how did hundreds of billions of dollars worth of "toxic"
mortgages suddenly come into being?

Why did the mortgage industry change its lending standards so
radically and so suddenly to make their creation possible?

And why did real estate lending regulators in all 50 states -
because real estate lending is a STATE-level issue not a federal
- go along with it?

Here's where it gets very interesting...

The fact is state-level lending regulators were VERY concerned
about what was going on. They have been for years.

And they not only expressed their concern clearly, they also
took SERIOUS concerted legal action to stop lenders from making
bad real estate loans to their citizens.

(Most of the sub-prime loans in the news so much today were
designed to screw the people who borrowed the money and can
rightly be called "predatory" loans.)

Guess who stopped the states from enforcing their own time-proven
real estate lending laws and thus created the raw material that
made the current "Credit Crisis" possible?

*** The trillion dollar plus question

If you're a US taxpayer, you're going to pay for this fraud
so you might as well know who did it to you.

His initials are GB.

You know him well.

But perhaps more interesting is the name of the person who
single-handedly rallied first state attorneys general and then
fellow governors to fight the creation of these loans and who
in the process became Public Enemy #1 to the Bush Administration...

His initials are ES.

If you follow "silly" US political scandals, you'll recognize
his name instantly when you hear it.

And you will *finally* understand why he was quickly and
permanently assassinated politically earlier this year.

Had ES been allowed to "live," he would have been in position to
remind everyone every day of who made the current meltdown
possible.

Instead, he was silenced very effectively. Not with a bullet
in the back of the head, but the net effect was just the same.

So effective was his assassination that no one can even
mention his name in connection with today's crisis without
risking ridicule, or worse.

Last note:

The crisis this fraud has created is *exponentially* bigger
than the S & L and Tech Bubble combined.

It's not going to be resolved by a quick "patch up" and will
likely have the same impact on the current generation that the
depression of the 1930s had on its parents, grandparents and
great grandparents.

On that cheerful note, here's the big story everyone missed
this year and now you'll finally know what REALLY happened
and why:

http://www.brasschecktv.com/page/291.html

- Brasscheck

How the US Media Fails Us

Here's a video of a talk by Robert F Kennedy Jr. in which he outlines what he sees as wrong with the US media. It's very good. It provides a clear explanation of why the news we get fails to give us the information and viewpoints we need. Have a look:

A Look at Fox News

I remember waiting for an arriving flight at Portland airport, and having my attention caught by the Fox News that was blaring from he news stand's television. What drew me to focus on the screen was an exchange between the two "reporters". One said, "Kofi Annan (former Secretary General of the UN) announced today that the US war in Iraq is illegal." The other responded, "Well, does anyone care what Kofi Annan says". I thought, immediately, in what sense is this news. Actually, it isn't. It's an example of the slide we've experienced from news to propaganda--entertainment. This is a core problem with American democracy. If you can't know what's really happening, and how to interpret it intelligently, you can't make an informed, democratic decision. Here's a series of interview segments from the video, Outfoxed. It is, in it's full length form, an excellent but dauntingly long production. Here, in "viewers digest" condensed form are the interviews that make the documentary's essential points. Important stuff. Have a look.

What's Going on in Bolivia

As you might have guessed, I am a fan of the leftist, populist movement emerging in Latin America. It's about time indigenous people there got a greater share of the considerable wealth their homeland possess. Evo Morales is the first ruler of indigenous origin in the history of Bolivia. He has dedicated himself to improving the lives of the country's poor native peoples. These are people who have been overlooked and exploited since the arrival of the Spanish so very long ago. Now there is conflict. The rich, even the middle class, are objecting to sharing with the indigenous peoples. They have initiated a violent uprising against the government. This video makes clear what is going on. Have a look:

The Panama Deception Pt 2

Here's the second half. Have a look.

The Panama Deception

I always had the feeling I really didn't understand the invasion of Panama to "get " Manuel Noriega. I mean, we recruited him, he was our boy. Somehow he got to be inconvenient. Remember that? Ok. Well, here's a film about that subject in two parts. This is part one.

A Bit of Emloyment Fun

This is something I found simply poking around. It's an ad for political action, but it's really well done. We need to figure out how to protect the living standards of all Americans. Those working Americans (of all strips and collar color) are particularly vulnerable. I'm an economist. I suggest we need tariffs. We need more protectionism. We can't compete with 5 billion third world slave laborers. Anyway, have a look.

Loss of Liberty pt 3

Have a look at part 3, the final piece.

Losss of Liberty pt 2

Here's part two of three for Loss of Liberty. Enjoy

Loss of Liberty

You may already know this story. I did, but ran across this interresting film about it. During the 1967 middle east war, Israel attacked a plainly market, and unique looking US Navy Intelligence ship in international waters off Israel. The attack and the aftermath make an interesting story. Have a look.

Sara Palin's Faux Populism

From Alternet.org

By Jim Hightower, AlterNet. Posted September 11, 2008.

Living in a small town and being able to field dress a moose does not make Palin a populist, no matter how much pundits want to pretend it does.

Tools

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McCain's Phony Earmark Ploy
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Dean Baker

More Bushenomics: Why McCain's Plans Would Only Add to Americans' Economic Pain
Nomi Prins

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It was not my intention to be writing about Sarah Palin, since everyone with a laptop, a No. 2 pencil or a red crayon seems to be covering that beat. But then came the pundits:

"She's a populist," gushed Karl Rove on Fox TV. Weird, since this right-wing political slime and corporate whore loathes, demonizes, mocks, fears and tries to destroy real populists.

"Perfect populist pitch," beamed CBS analyst Jeff Greenfield right after Palin's big speech at the GOP fawnfest in St. Paul. In his less infatuated moments, Greenfield surely must realize how ludicrous his comment was, since once, long ago, he co-authored a book that had "populist" in the title, so he has at least had a brush with the authentic people's movement that the term encapsulates.

So they made me do it. Karl, Jeff and other pundits who are rushing to place the gleaming crown of populism atop the head of this shameless corporate servant -- they are the ones who have driven me to write about Palin. Someone has to nail the media establishment for its willing perversion of language, American history and the substance of today's genuine populism.

Palin might be popular, she might be able to field dress a moose, she might live in a small town, she might enjoy delivering "news flashes" to media elites, she might even become vice president -- but none of this makes her a populist. To the contrary, she is to populism what bear is to beer, only not as close.

You want a taste of the real thing? Try this from another woman who hailed from a town (smaller than Wasilla, Alaska) and was renowned for her political oratory:

Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street and for Wall Street. ... Our laws are the output of a system which clothes rascals in robes and honesty in rags. ...

There are thirty men in the United States whose aggregate wealth is over one and one-half billion dollars. There are half a million looking for work. ... We want money, land and transportation. We want the abolition of the National banks, and we want the power to make loans direct from the government. We want the accursed foreclosure system wiped out. ... We will stand by our homes and stay by our firesides by force if necessary, and will not pay our debts to the loan-shark companies until the Government pays its debts to us.

The people are at bay, let the bloodhounds of money who have dogged us thus far beware.

That, my media friends, is populism. It comes from Mary Ellen Lease, who was speaking to the national convention of the populist party in Topeka, Kan., in 1890. In a time before women could vote, Lease traveled the countryside to rally a grassroots revolt against the corporate predators of her day, urging farmers to "raise less corn and more hell." She didn't need to brag that she was a pit bull in lipstick, because her message, idealism and actions made her an actual force for change.

America has been blessed with populist women ever since, including such honest and insistent voices as Ida Tarbell, Mother Jones, Dorothy Day, Rosa Parks, Rachel Carson, Karen Silkwood, Barbara Jordan, Molly Ivins, Barbara Ehrenreich and Granny D. Measure Sarah Palin against these.

McCain Campaign Distortions

McCain's campaign is becoming increasingly sleazy. For some examples, admittedly partisan in origin, have a look at the linked video below.



McCain Distortions

The Secret Government part 2

Here's the rest of the story. Have a look.

The Secret Government part 1

Back in 1987, I think, Bill Moyers put together a documentary on what he called the Secret Government. Prior to the National Security Act of 1948, the United States had traditionally demobilized after a war and returned to concentrating on domestic issues. After WWII, however, the US began the cold war. He created the National Security Council and the Central Intelligence Agency (CIA) and things have never been as they were before 1947-48. A new "secret government" was established that increasingly regarded the war on Communism as imbued with a higher moral purpose such that a-constitutional and unconstitutional and patently illegal methods were OK if the target was International Communism. It's a fascinating Story. Have a look.

Civilians Killed in US Afghanistan Raids

Harrowing video film backs Afghan villagers' claims of carnage caused by US troops

By Tom Coghlan in Kabul

08/09/08 "The Times" -- - As the doctor walks between rows of bodies, people lift funeral shrouds to reveal the faces of children and babies, some with severe head injuries.

Women are heard wailing in the background. “Oh God, this is just a child,” shouts one villager. Another cries: “My mother, my mother.”

The grainy video eight-minute footage, seen exclusively by The Times, is the most compelling evidence to emerge of what may be the biggest loss of civilian life during the Afghanistan war.

These are the images that have forced the Pentagon into a rare U-turn. Until yesterday the US military had insisted that only seven civilians were killed in Nawabad on the night of August 21.

If video fails to load please try this link.

Last night the Pentagon announced that it was reopening the investigation in the light of “emerging evidence” and was sending an officer to Nawabad to review its previous inquiry. Villagers and the UN insist that 92 were killed, including as many as 60 children. Locals say that the US and Afghan troops who came into the village looking for a Taleban commander, with US air support, used excessive force.

In the video scores of bodies are seen laid out in a building that villagers say is used as a mosque; the people were killed apparently during a combined operation by US special forces and Afghan army commandos in western Afghanistan. The film was shot on a mobile phone by an Afghan doctor who arrived the next morning.

Local people say that US forces bombed preparations for a memorial ceremony for a tribal leader. Residential compounds were levelled by US attack helicopters, armed drones and a cannon-armed C130 Spectre gunship.

However, US commanders and Pentagon officials have said repeatedly that seven civilians died alongside 35 Taleban militants during a legitimate combat operation, the target of which was a meeting of Taleban leaders.

The villagers’ accounts have been supported by separate investigations conducted by the UN, by Afghanistan’s leading human rights organisation and by an Afghan government delegation. Two Afghan army officers involved in the operation have been dismissed.

The Pentagon’s original investigation concluded last week that US forces used close air support after coming under heavy fire during a mission to seize a Taleban commander named Mullah Sadiq. They allege that he died in the operation.

The US military said that its findings were corroborated by an independent journalist embedded with the US force. He was named as the Fox News correspondent Oliver North, who came to prominence in the 1980s Iran-Contra affair, when he was an army colonel.

Sources close to one of the investigations said that a video film was shot by Afghan officials the morning after the attack. It corroborates the doctor’s footage but has not been made public.

In a statement released on Saturday, the commander of Nato forces, General David McKiernan, appeared to back away from previous US accounts. He said: “Following the recent operation in Azizabad, Shindand district, we realise there is a large discrepancy between the number of civilian casualties reported by soldiers and local villagers. I remain responsible to continue to try and account for this disparity in numbers, but above all I want to express our heartfelt sorrow to all families that lost loved ones in this firefight.”

A Human Rights Watch report due to be published today is highly critical of US and Nato forces in Afghanistan for the number of civilians killed in airstrikes. It gives warning that repeated instances of Western forces killing Afghan civilians have led to a collapse in popular support for the international presence.

Taking what it says are the most conservative figures available, Human Rights Watch has calculated that civilian deaths as a result of Western airstrikes tripled between 2006 and 2007 to 321. In the first seven months of this year the figure was 119. In the same period, 367 civilian deaths were attributed to Taleban attacks. It accuses US officials of routinely denying reports of civilian deaths.

Maulavi Gul Ahmad, an Afghan MP who was part of a government delegation that investigated the Nawabad attack, told The Times: “We are not only blaming America – this is destroying the reputation of the international community and undermining their presence in Afghanistan.”

Other Afghan investigators alleged that US forces had been duped into attacking the village by tribal figures involved in a local feud.

Civilian casualties in Afghanistan

December 2001
US aircraft attack a convoy taking tribal leaders to the inauguration of new Afghan Government. About 60 killed; US claims al-Qaeda leaders among them

July 2002
46 die, many from same family, when a wedding party in Uruzgan province is bombed in error

October 26, 2006
Between 40 and 85 civilians are killed in airstrikes and mortar bombardments around the settlement of Zangawat in Kandahar province

March 2007
19 people are killed and 50 wounded when US Marine Special Forces fire on civilians after a suicide attack in Shinwar, eastern Afghanistan. The US military apologises and pays compensation to the families

July 6, 2008
47 civilians, including 39 women and children attending a wedding party, are killed by a US airstrike in Nangarhar province, an Afghan government investigating team claims

Federal government involved in raids on protesters

From Salon

More extraordinary than these extreme raids is the fact that they are generating so little attention and even less outcry.

Glenn Greenwald

Aug. 31, 2008 | (update below - Update II)

As the police attacks on protesters in Minnesota continue -- see this video of the police swarming a bus transporting members of Earth Justice an environmental activist group, seizing the bus and leaving the group members stranded on the side of the highway -- it appears increasingly clear that it is the Federal Government that is directing this intimidation campaign. Minnesota Public Radio reported yesterday that "the searches were led by the Ramsey County Sheriff's office. Deputies coordinated searches with the Minneapolis and St. Paul police departments and the Federal Bureau of Investigation."

Today's Star Tribune added that the raids were specifically "aided by informants planted in protest groups." Back in May, Marcy Wheeler presciently noted that the Minneapolis Joint Terrorist Task Force -- an inter-agency group of federal, state and local law enforcement led by the FBI -- was actively recruiting Minneapolis residents to serve as plants, to infiltrate "vegan groups" and other left-wing activist groups and report back to the Task Force about what they were doing. There seems to be little doubt that it was this domestic spying by the Federal Government that led to the excessive and truly despicable home assaults by the police yesterday.

So here we have a massive assault led by Federal Government law enforcement agencies on left-wing dissidents and protesters who have committed no acts of violence or illegality whatsoever, preceded by months-long espionage efforts to track what they do. And as extraordinary as that conduct is, more extraordinary is the fact that they have received virtually no attention from the national media and little outcry from anyone. And it's not difficult to see why. As the recent "overhaul" of the 30-year-old FISA law illustrated -- preceded by the endless expansion of surveillance state powers, justified first by the War on Drugs and then the War on Terror -- we've essentially decided that we want our Government to spy on us without limits. There is literally no police power that the state can exercise that will cause much protest from the political and media class and, therefore, from the citizenry.

Beyond that, there is a widespread sense that the targets of these raids deserve what they get, even if nothing they've done is remotely illegal. We love to proclaim how much we cherish our "freedoms" in the abstract, but we despise those who actually exercise them. The Constitution, right in the very First Amendment, protects free speech and free assembly precisely because those liberties are central to a healthy republic -- but we've decided that anyone who would actually express truly dissident views or do anything other than sit meekly and quietly in their homes are dirty trouble-makers up to no good, and it's therefore probably for the best if our Government keeps them in check, spies on them, even gets a little rough with them.

After all, if you don't want the FBI spying on you, or the Police surrounding and then invading your home with rifles and seizing your computers, there's a very simple solution: don't protest the Government. Just sit quietly in your house and mind your own business. That way, the Government will have no reason to monitor what you say and feel the need to intimidate you by invading your home. Anyone who decides to protest -- especially with something as unruly and disrespectful as an unauthorized street march -- gets what they deserve.

Isn't it that mentality which very clearly is the cause of virtually everyone turning away as these police raids escalate against citizens -- including lawyers, journalists and activists -- who have broken no laws and whose only crime is that they intend vocally to protest what the Government is doing? Add to that the fact that many good establishment liberals are embarrassed by leftist protesters of this sort and wish that they would remain invisible, and there arises a widespread consensus that these Government attacks are perfectly tolerable if not desirable.

During the Olympics just weeks ago, there was endless hand-wringing over the efforts by the Chinese Government to squelch dissent and incarcerate protesters. On August 21, The Washington Post fretted:

Six Americans detained by police this week could be held for 10 days, according to Chinese authorities, who appear to be intensifying their efforts to shut down any public demonstrations during the final days of the Olympic Games. . . .

Chinese Olympic officials announced last month that Beijing would set up zones where people could protest during the Games, as long as they had received permission. None of the 77 applications submitted was approved, however, and several other would-be protesters were stopped from even applying.

On August 2, The Post gravely warned:

Behind the gray walls and barbed wire of the prison here, eight Chinese farmers with a grievance against the government have been consigned to Olympic limbo.

Their indefinite detainment, relatives and neighbors said, is the price they are paying for stirring up trouble as China prepares to host the Beijing Games. Trouble, the Communist Party has made clear, will not be permitted.

Would The Washington Post ever use such dark and accusatory tones to describe what the U.S. Government does? Of course it wouldn't. Yet how is our own Government's behavior in Minnesota any different than what the Chinese did to its protesters during the Olympics (other than the fact that we actually have a Constitution that prohibits such behavior)? And where are all the self-righteous Freedom Crusaders in our nation's establishment organs who were so flamboyantly criticizing the actions of a Government on the other side of the globe as our own Government engages in the same tyrannical, protest-squelching conduct with exactly the same motives?

Just review what happened yesterday and today. Homes of college-aid protesters were raided by rifle-wielding police forces. Journalists were forcibly detained at gun point. Lawyers on the scene to represent the detainees were handcuffed. Computers, laptops, journals, diaries, and political pamphlets were seized from people's homes. And all of this occurred against U.S. citizens, without a single act of violence having taken place, and nothing more serious than traffic blockage even alleged by authorities to have been planned.

A man whose sister was one of those arrested at one of the raided houses in Minneapolis yesterday emailed me a photograph of her and her friend who was also arrested -- Monica Bicking (r.) and Eryn Trimme -- and he wrote this:

They are still in custody. I've been told that the police have 36 hours to charge her, and that 36 hours starts after the labor day holiday, so they only have to charge her sometime Wednesday. It seems unlikely that they'd do anything to expedite her or Eryn's release.

They were then planning to actually board up her house for unspecified "code violations", but apparently her neighbors were very vocal, and the police ended up agreeing not to do anything so long as the front door was fixed by 6pm (the front door they'd busted in).

Heres is the extraordinary blog item I linked to yesterday from Eileen Clancy, one of the founders of I-Witness Video -- a NYC-based video collective which is in St. Paul to document the policing of the protests around this week's Republican National Convention, just as they did at the 2004 GOP Convention in New York. Clancy wrote this as a plea for help, as the Police surrounded her house and (before they had a search warrant) told everyone inside that they'd be arrested if they exited the home:

This is Eileen Clancy . . . The house where I-Witness Video is staying in St. Paul has been surrounded by police. We have locked all the doors. We have been told that if we leave we will be detained. One of our people who was caught outside is being detained in handcuffs in front of the house. The police say that they are waiting to get a search warrant. More than a dozen police are wielding firearms, including one St. Paul officer with a long gun, which someone told me is an M-16.

We are suffering a preemptive video arrest. For those that don't know, I-Witness Video was remarkably successful in exposing police misconduct and outright perjury by police during the 2004 RNC. Out of 1800 arrests, at least 400 were overturned based solely on video evidence which contradicted sworn statements which were fabricated by police officers. It seems that the house arrest we are now under and the possible threat of the seizure of our computers and video cameras is a result of the 2004 success.

We are asking the public to contact the office of St. Paul Mayor Chris Coleman at 651-266-8510 to stop this house arrest, this gross intimidation by police officers, and the detention of media activists and reporters.

That sounds like what it was: a cry for help from a hostage. Hours later, the Police finally obtained a search warrant -- for the wrong house, one adjacent to the house where they were being detained -- and nonetheless broke in, pointing guns, forced them to lay on the floor and handcuffed everyone inside (and handcuffed a National Lawyers Guild attorney outside). They searched the house, arrested nobody, and then left.

Any rational person planning to protest the GOP Convention would, in light of this Government spying and these police raids, think twice -- at least -- about whether to do so. That is the point of the raids -- to announce to citizens that they best stay in their homes and be good, quiet, meek, compliant people unless they want their homes to be invaded, their property seized, and have rifles pointed at them, too. The fact that this behavior is producing so little outcry only ensures, for obvious reasons, that it will continue in the future. We love our Surveillance State for keeping us safe and maintaining nice, quiet order.

UPDATE: A Professor at the University of Minnesota who lives in the neighborhood where one of the homes was raided yesterday sent photographs he took which rather conclusively demonstrate federal involvement in these raids:



And Feministing has the video -- here -- of the scene yesterday where journalists were detained, along with an interview with the homeowner whose house was raided.

UPDATE II: Preliminary reports erroneously indicated that the bus that was stopped was carrying members of Earth Justice. That was inaccurate. The group was an environmental activist group but has no connection or affiliation with Earth Justice.

Update from Amman

One of the better ways to learn what's happening in Iraq is to talk to an Iraqi. In the attached audio link, Marianne Barisonek does just that. While on a recent trip to Jordan seeking ways to aid Iraqi refugees there, Marianne met Najlaa. This articulate, multi-lingual woman is herself an Iraqi refugee living in Amman. Najlaa is familliar with current events in Iraq and with the refugee situation in Jordan. In the attached interview done by phone, Najlaa Al-Nashi talks with Marianne and with Noah Merril Baker of Direct Aid Iraq The conversation discusses the state of affairs in both Iraq and for refugees in Jordan. Have a Listen.

Update from Amman

Obama and the Great Compromise

Barack Obama's has been an exciting campaign process for me. It's been very hopeful and promising to contemplate the first black candidate of a major party. It has been, as well, disappointing to have him back off of liberal positions with depressing frequency. This Bill Moyers piece sculpts these issues rather well. I hope you're a conservative I might convert, but those are just my fondest dreams.

Bill Hicks in London 1993 part 2

We've done the intro. Here's part two of the London performance. Have a look:

Bill Hicks

Bill Hicks died far too young. Born December 15th, 1961 he passed on February 26th 1994 a victim of pancreatic and liver cancer. I'm posting a bunch of his work. I will say he's a bit edgy and his humor might offend some. Still, he's brilliant and ranges from the biting to the hilarious. I wish he'd lived. He'd have had a wonderful time skewering 9/11, the "Dubbya" administration and the war in Iraq among many other things. His insights were advanced for his age and time. His death was a great loss. This is from his 1993 London performance. There are two parts. Have a look at part one.

Religion is Bullshit

We have George Carlin here. There won't be any new material. This piece on religion is priceless. Have a Look: