Monday, June 16, 2008

Stocks in U.S. Show Negative Return as Inflation Erases Profits

Stocks in U.S. Show Negative Return as Inflation Erases Profits

By Michael Tsang and Alexis Xydias

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Inflation is eliminating the rewards of owning U.S. stocks.

Surging commodity prices have eroded earnings and spurred the Federal Reserve to consider raising borrowing costs just as equities are trading at their most expensive in four years. Standard & Poor's 500 Index shares yield 0.22 percentage point more in profits than the interest on 10-year Treasury notes, the smallest advantage since 2004, data compiled by Bloomberg show. The last time corporate earnings returned less versus bonds, the index posted its first quarterly decline in more than a year.

The 40 percent advance in oil, 61 percent jump in corn and 38 percent climb in rice pushed the UBS Bloomberg Constant Maturity Commodity Index to a record this year. That's squeezing profits as raw-material costs outpace consumer prices by the largest margin since the 1970s. Companies in the S&P 500 will earn 7.7 percent less in the second quarter than a year ago, according to analysts' estimates compiled by Bloomberg.

‘‘We now have an inflation scare that comes on the back of an already negative backdrop in earnings growth,'' said Florence Barjou, 35, a Paris-based manager at Societe Generale SA's Lyxor Asset Management SA, which oversees $100 billion. Her $1.2 billion Lyxor Diversified Fund dropped all of its bets this year on rising stocks, contributing to the fund's 19 percent return in the past year in dollars.

S&P's Decline

The S&P 500 slumped 7.4 percent since December, the biggest year-to-date decline since 2002. Almost $400 billion in losses tied to subprime assets and the collapse of Bear Stearns Cos. sent the gauge to its worst tumble in seven years in the first quarter. After rebounding in April, the index fell 4.7 percent on concern record fuel and food costs will force the Fed to lift interest rates even as the economy sputters. Yields on 10-year Treasuries jumped on June 13 to the highest level this year.

Rising bond rates make the payout from fixed-income investments more competitive with stocks. S&P 500 companies yielded 4.28 percent in reported profit versus their share prices last month, compared with 4.06 percent from 10-year Treasuries, data compiled by Bloomberg show. The last time the gap between the so-called earnings yield and government bonds was narrower was in May 2004. A quarter later, the S&P 500 lost 2.3 percent.

Profits are declining as U.S. companies' input costs rise faster than they can pass them on to consumers. At the end of March, producer prices including food and energy rose by 6.9 percent, compared with a 4 percent increase in consumer prices, according to quarterly data compiled by Bloomberg.

Pricing Power

The last time U.S. companies had so little pricing power was in 1975, after the Middle East oil embargo ushered in a decade of stagnant growth and price increases known as ‘‘stagflation.''

While economists project that U.S. growth will grind to a halt in the second quarter, inflation accelerated to 4.2 percent last month from a year ago. That's more than double the rate in August, just before Fed Chairman Ben S. Bernanke initiated the most aggressive rate reduction since the 1980s, cutting the target rate for overnight bank loans by 3.25 points to 2 percent.

‘‘The Fed is in a tough space,'' Byron Wien, chief investment strategist at Pequot Capital Management Inc., a $7 billion hedge fund based in Westport, Connecticut, said on Bloomberg television. ‘‘They've got all the commodities working against them. Even though the economy is slowing, the price of oil and agricultural commodities is rising, so that's creating an inflationary pressure.'' The 75-year-old strategist predicted in January that U.S. stocks would drop this year as the economy falls into a recession and inflation rises.

Emerging Economies

Demand for raw materials in emerging economies and a weaker dollar underpinned the record-breaking 26 percent jump this year in the average price of 26 commodities tracked by UBS AG and Bloomberg. Inflation now exceeds targets in 80 percent of developed and emerging-market nations where central banks have them, Abhijit Chakrabortti, chief global equity strategist at Morgan Stanley in New York, wrote in a note last week.

In response, at least two dozen central banks from India and Brazil to Serbia and South Africa have raised rates in 2008.

‘‘Central banks are now worrying about inflation more than about growth,'' Richard Cookson, London-based head of global asset allocation research at HSBC Holdings Plc, Europe's biggest bank by value, wrote in a report last week advising clients to cut their equity holdings. ‘‘That doesn't mean we now like government bonds more. But it does mean we like equities less.''

Global Inflation

The fastest gains in consumer prices since at least 1992 have sent Vietnam's benchmark stock index to a 60 percent drop this year, the biggest among 88 global benchmarks tracked by Bloomberg. Chinese shares slumped 44 percent in 2008 as inflation climbed to the highest in 12 years in February.

In the U.S., valuations have climbed as earnings of S&P 500 companies fell faster than shares.

Ford Motor Co., the second-largest U.S. automaker, abandoned a target of returning to profit next year on May 22 because of rising costs for steel and gasoline. The Dearborn, Michigan-based company's shares dropped 24 percent in the past month.

Whole Foods Market Inc., the largest U.S. natural-foods grocer, slumped 19 percent since reporting on May 13 a bigger- than-expected drop in quarterly profit. The Austin, Texas-based retailer said sales growth slowed as shoppers reined in spending.

Jonathan Armitage, New York-based head of U.S. large-cap equities at Schroders Plc, which oversees about $259 billion, says the share declines created buying opportunities because inflation concerns are overstated. Slowing global growth will cool demand for energy and commodities, and a U.S. recovery will bolster earnings within 12 months, he said.

‘‘Concern about inflation will dissipate, and that allows the equity market to look through what is obviously a challenging economic environment,'' said Armitage, 38, who bought retailers and railroads this year.

Stanford Group Suisse AG's Leo Schrutt is less sanguine.

‘‘Stagflation is a very real and likely scenario in the U.S.,'' said Schrutt, 51, senior managing director at Stanford Group in Zurich, which has $60 billion under management for wealthy clients in Europe. ‘‘What does this mean for stocks? I personally am waiting for things to get a little worse.''

Crude Oil Rises to Record $139.89 as Dollar Drops

Crude Oil Rises to Record $139.89 as Dollar Drops Against Euro

By Mark Shenk

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Crude oil rose to a record $139.89 a barrel in New York as a weaker dollar bolstered the appeal of commodities as a hedge, and a fire cut North Sea output.

The U.S. currency fell as much as 0.8 percent against the euro, making commodity purchases cheaper to foreign investors. StatoilHydro ASA's 150,000 barrel-a-day Oseberg oil and gas field off the Norwegian coast was shut after a fire broke out in a high-voltage room on a platform yesterday.

‘‘When there is any sign of dollar weakness, the money runs to safe harbors such as oil,'' said Rick Mueller, director of oil practice at Energy Security Analysis Inc. in Wakefield, Massachusetts. ‘‘The fire at Oseberg, which is a very important field, is getting an outsized reaction because the market is so nervous.''

Crude oil for July delivery rose $4.10, or 3 percent, to $138.96 a barrel at 9:06 a.m. on the New York Mercantile Exchange. Futures reached the previous record of $139.12 a barrel on June 6.

Brent crude oil for August settlement climbed $3.40, or 2.5 percent, to $138.51 a barrel on London's ICE Futures Europe exchange. Prices climbed to a record $139.32 today.

Living conditions worsen for US children

Living conditions worsen for US children

By Naomi Spencer

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For decades, measures of child well-being in the United States—infant mortality rates, the percentage of children whose parents had steady employment, and general health indicators—saw gradual improvements or stable levels for the overall population. Since 2000, however, many aspects of this trend have stalled or reversed course as millions of working class families have fallen into poverty and low-wage jobs, and basic government-funded social programs have eroded.

Data compiled in the annual Kids Count report by the Annie E. Casey Foundation (AECF) emphasize this fact, noting that now “more children are living in relative poverty in the United States than in any other economically advanced nation.”

Most of the figures in the report are derived from the federal Census Bureau’s 2000-2006 American Community Surveys, Supplementary Surveys, and analysis by the Population Reference Bureau. The AECF also utilizes state-level data, which is more recent, but not consistent across the country. In the years since the bulk of the census data was compiled, the situation has undisputedly worsened for broad sections of the population. Nevertheless, the figures are revealing and worth looking into in some detail.

The AECF noted that between 2000 and 2006, the 10 indicators of child well-being—infant mortality and low-birth-weight rates, child and teen death rates, teen pregnancy and high school dropout rates, and proportions of children living in single-parent, low-income, and unemployed parent households—have overall remained flat; “improvements have stalled.”

“In fact,” the report states, “the child poverty rate has increased by 6 percent, meaning 1 million more children in poverty in 2006 than in 2000.” In 2006, 18 percent, or 13.3 million children, officially lived in poverty.

The 2006 poverty line was $20,444 for a family of two adults and two children. This is an unrealistically low government determination that has the effect of restricting aid eligibility and understating the official poverty estimates. Most advocacy organizations suggest that a more realistic poverty threshold would fall closer to twice the federal poverty line. The definition of “low-income,” which is less than twice the poverty rate, is therefore a frequent measure used for economic surveys, and one that more accurately captures the living conditions for the broad majority of working families.

In 2005, more than 14.8 million children lived in low-income working families, with the highest geographic concentrations in urban areas and in the South, and demographically among black and Hispanic populations.

Indicators varied enormously among the states. According to the AECF, “The rates of the worst states are approximately two to four times those of the best states on every indicator.” New Hampshire, Minnesota and Massachusetts ranked highest overall; Mississippi, Louisiana and New Mexico had the lowest composite index.

In 2006, 24.3 million US children—one in three—were living in families where no parent had full-time, year-round employment. In North Dakota, which fared best in the AECF ranking on this measure, 24 percent of children lived in this situation. In Louisiana, 43 percent of kids lived in households where adults did not have steady work; in Mississippi, the rate was 42 percent. Throughout the South and Southwest, virtually all state-level indicators of child well-being were at their worst.

Urban areas throughout the country registered far higher concentrations of poverty than the national average. In Detroit, Michigan, 59 percent of children had no parent at home who had a full-time, year-round job, and 16 percent of children lived in low-income households where no parents worked at all in 2006.

Although Detroit is well known as a city with deep and growing impoverishment, the AECF tabulations indicated that working class families in many other cities throughout the country were confronting economic crisis in similar numbers. In both Atlanta, Georgia, and Memphis, Tennessee, 53 percent of children lived in families in which no parent had full-time, year-round employment; 57 percent of children in New Orleans, Louisiana, and in Cleveland, Ohio, faced the same circumstances.

According to Census Bureau data, upon which the AECF tabulations are based, 64 percent of children in Hartford, Connecticut, lived with parents who did not have full-time employment through the year, but the city was not included in the rankings. Even in the better-ranked cities, Mesa, Arizona, and Virginia Beach, Virginia, one in four children lived in such circumstances.

In virtually every city for which data was provided, the majority of children lived in low-income households falling under the federal Department of Housing and Urban Development definition of “housing burdened,” wherein housing costs consumed more than 30 percent of monthly incomes. Above this level, according to HUD, families are less likely to have enough financial resources left for food, utilities, or other basic needs.

Exorbitant housing costs are a pervasive problem in the US. The District of Columbia registered the lowest proportion of low-income families in this predicament—57 percent. In Miami, Florida, 85 percent of children lived in this situation. The state-by-state data was comparable, with New Jersey ranking highest at 80 percent, and sparsely populated South Dakota ranking lowest at 38 percent. Nationwide, two in three low-income children were in housing-burdened families.

Such figures carry significant social implications. An increasing proportion of the younger generations in the US are growing up in economic straits, in families burdened by low wages, rising living expenses, and debt. For younger workers who have children at home, particularly in former industrial strongholds and manufacturing centers, steady employment is more difficult to secure. The “American dream”—finishing school, landing a good-paying job, buying a home and raising a family—is far from the reality for many working class households.

As the financial situation worsens, health, education and other indices of overall well-being also decline.

Nationwide, the number of low-birth-weight births has increased dramatically. In 2005, more than 338,500 babies were born weighing less than 5.5 pounds—putting them at higher risk for death before the age of 1 and having developmental problems. Some 8.2 percent of all births in 2005 were low birth weight, up 8 percent since 2000. The rate is the highest in 40 years.

Similarly, the infant mortality rate—the measure of infant deaths per 1,000 live births over the year—has not improved since 2000. In 2001-2002, the infant mortality rate increased for the first time in five decades. According to the AECF, in 2005, 28,440 infants died in the US, averaging to 6.9 deaths per 1,000 live births. Mississippi’s infant death rate stood at 11.3 per 1,000 births. The District of Columbia, which was not included in the AECF rankings, had an infant mortality rate of 14.1, and the overall infant mortality rate for African-American babies was 13.7 in 2005. These rates are higher than those of Serbia, Sri Lanka, Uruguay, and Bosnia, and nearly 100 other countries.

The rates of low-birth-weight births and infant mortality must be seen in the context of decades’ worth of improvements to prenatal care and medical technology. Behind the worsening health outcomes for children and their mothers is the dismantling of social programs, which began under the Clinton administration and has accelerated under Bush, along with the initiatives of reactionary state governments to gut funding and privatize healthcare for the poor.

At the same time that government assistance has been scaled back and restricted, employers have cut pensions and insurance benefits for hundreds of thousands of workers, and the costs of private insurance and medical care itself have soared to prohibitive levels. In many cases, families that can barely afford housing and food simply go without medical care.

Child and teen death rates have declined for the past several years, which the AECF attributes in part to better medical technology. The report notes that during 2005, nearly 11,400 kids between the ages of 1 and 14 died in the US, averaging 31 per day. In addition, “13,703 adolescents ages 15 to 19 died, and this is the equivalent of the number of passengers on 39 jumbo jets. Virtually all of these deaths were preventable.”

Teen pregnancy rates have also declined over the past several years, to just under 414,600 babies born to teenage girls in 2005. This is still about 1,136 births every day, making the US rate one of the highest among economically developed nations in this category. The AECF notes that “preliminary data for 2006 show the possibility of an increase in the teen birth rate for the first time in a decade.”

The high school dropout rate has also declined, to 7 percent nationally. However, in 2006, the report notes that there were 1.1 million teens between the ages of 16 and 19 who were not in school and had not graduated, and there were 1.4 million in this age group who were neither in school nor working. Reflecting economic stagnation, for the 15 states comprising virtually the entire South and Southwest of the country, 1 in 10 teens were “idle.”

Corresponding to a deterioration in the quality of education, economic opportunities and, in general, social and cultural outlets for youth, the “juvenile corrections systems” have grown larger and more draconian throughout the country. Beginning in the 1990s, many schools began adopting various so-called “zero-tolerance” policies and invasive security practices. Rather than simply working to correct behavior within the school systems, students who violated school policies were instead sent into the court systems. There, because of cuts to mental health and child welfare programs, large numbers of teens with behavioral problems or mental disabilities were shunted into juvenile detention centers.

“Each year now, as many as 200,000 youth under age 18 are tried in adult criminal courts nationwide,” according to an essay accompanying the Kids Count data book. And on any given day in the US, nearly 100,000 young people are confined by court order in prisons, “treatment” centers, or group homes. The AECF notes, “Just 24 percent of youth confined in 2003 were adjudicated for violent felonies, whereas more than 45 percent were guilty only of status offenses; probation violations; misdemeanors; or low-level felonies unrelated to violence, weapons, or drug trafficking.” In 29 states, kids are automatically transferred out of juvenile courts into the adult criminal courts for certain crimes on the reactionary notion of “adult time for adult crime.”

Teens within the adult corrections systems are subjected to horrific abuse. They are far more likely to be sexually assaulted, be beaten, and commit suicide. Their mental health and development are profoundly interrupted by incarceration. According to research from the John D. and Catherine T. MacArthur Foundation cited by the AECF, “Only 12 percent of formerly incarcerated youth had a high school diploma or GED by young adulthood.” And “Only about 30 percent were in either school or a job one year after their release...and they are more likely to be divorced and to bear children outside of marriage.”

Juveniles are also being subjected to long sentences, even for life terms. The AECF comments: “While the Supreme Court outlawed the death penalty for juveniles, it did not ban life sentences without the possibility of parole, a disturbingly popular alternative. Worldwide, 2,388 prisoners are currently serving life sentences for crimes they committed before age 18; all but 7 are imprisoned in the United States.”

Prices and home foreclosures surge in May

Prices and home foreclosures surge in May

By Andre Damon

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A record number of US homeowners faced foreclosure on their properties in May, according to statistics published Friday. That same day, the Bureau of Labor Statistics released data showing a sharp increase in consumer prices for the month of May.

The latest foreclosure data released by the real estate research firm RealtyTrac showed a 4 percent increase in foreclosure filings in May over the previous month, representing a 65 percent increase over April 2007. One in every 519 properties in the US received a foreclosure filing in May.

Nevada, California, Florida, Ohio and Arizona posted the highest foreclosure rates and totals. Nevada had the highest overall rate, with one in 146 households receiving a foreclosure filing in the month of May. Foreclosure notices had almost doubled in the state since 2007. California reported the highest total number of foreclosures, followed by Florida.

While foreclosure activity has increased throughout the country, some areas are especially hard-hit. The city with the highest foreclosure rate—Merced, California—had one in 66 properties receive a foreclosure notice in May. The foreclosures are draining city budgets, and municipalities are being forced to cut back on essential services. The report noted that the city of Vallejo, California, which has the nation’s sixth-highest foreclosure rate, would be filing for bankruptcy as a result.

RealtyTrac CEO James J. Saccacio noted, “Although only about 2 percent of households nationwide are in foreclosure, these properties contribute to already bloated inventories of homes for sale, and put downward pressure on home values.”

The S&P/Case-Shiller index, which measures home prices in 10 major metropolitan areas, has fallen 14 percent year to year, and an overall 16 percent from its peak in 2006. Analysts remain divided as to the extent that housing prices will continue to fall, but some are predicting that less than half of the price adjustment has already taken place.

As homeowners’ wealth plummets together with their home values, the cost of living has continued to increase. Consumer prices increased 0.6 percent in May, or at an annualized rate of 7.2 percent, significantly higher than the 4.2 percent rise seen during the past 12 months. The price increases were sparked by a sharp rise in energy and transportation costs. Energy costs—driven by spiraling oil prices—surged by 4.4 percent in May alone. Transportation costs spiked by 2 percent in May, as airlines and trucking firms passed high oil prices on to their customers.

Despite high “headline” consumer prices, the most recent figures were portrayed as reassuring by economists, who noted that “core” inflation remained under control. Core consumer prices—which are calculated by stripping out food and energy costs—rose only 0.2 percent in May, and in general have stayed at a relatively low 2.3 percent year-to-year rise.

It is important to understand the relationship between the population’s real income and the various measures of prices. Inflation—or more specifically the differential between its core and headline measures—is one of the major indices of the class struggle. From an individual standpoint, “core” (as opposed to headline) inflation is essentially meaningless because, after all, everyone eats and most people drive. But, on a social level, core inflation is more sensitive to wage demands. When rising prices lead workers to successfully struggle for higher wages, producers tend to pass on the extra costs in the price of finished products, thus pushing up core inflation.

But this has not happened because employers have thus far successfully kept their foot on wage demands. According to the Bureau of Labor Statistics, compensation for civilian workers rose by only 0.7 percent throughout the first quarter of the year, only slightly higher than the change in consumer prices in the month of May alone.

Compensation in private industry increased by only 3.2 percent in the year ending in the first quarter. Considering the fact that prices rose by 4.2 percent over the same period, we can conclude that the average worker is one percent poorer today than he was a year ago. This reduction in living standards has occurred while the US has not yet technically entered a recession. Median real wages have been falling for the past eight years, and have only accelerated their descent as a result of recent commodity price increases.

The foreclosure and inflation statistics come on top of an unexpectedly large increase in unemployment, which jumped from 5 percent to 5.5 percent in May, according to the Bureau of Labor Statistics. Payrolls have fallen every month since the beginning of the year. The concurrent falling consumer incomes, rising unemployment, and sharply rising prices work together to exacerbate the foreclosure crisis. People are simply unable to pay their mortgagees, and are being caught up in foreclosures on their homes in record numbers.

There are currently two main sources of worldwide inflation. The most obvious and pervasive of these is the spike in commodity prices, fueled by the unplanned and erratic expansion of the world economy and exacerbated by speculation. Fuel and oil price increases have wreaked havoc on the lives of working people, whose wages worldwide have generally failed to keep up with the price increases.

But perhaps equally important is the general upward trend in Asian prices. The Financial Times carried an article Thursday noting the trend and bemoaning the inability of Chinese industry to drive down prices further. In the previous period, China served as a major damp on worldwide inflation, producing masses of ever-cheaper goods with its seemingly inexhaustible supply of impoverished labor.

The Chinese ruling elite, however, has run into a contradiction inherent in its goals: while it wishes to remain a world leader of cheap manufacturing, at the same time it seeks to develop a stable internal market, which requires increases in standards of living. Moreover, it finds itself objectively unable to further reduce wages past a certain minimal level required to sustain its workers.

For these reasons, Chinese inflation has reached an annual rate of over 8 percent, and the fear among economists is that inflationary pressures from China will be transmitted into the US and world economies, leading to increased wage demands.

As Bank of England Governor Mervyn King noted in a recent speech, the world economy is entering a period of sustained inflation and unemployment. It is the international working class that will bear the burden of the crisis of capitalism. Central banks worldwide—from the US Federal Reserve to the European and Chinese central banks—have indicated that they intend to raise interest rates in pursuit of anti-inflationary policies. They will attempt to suppress wage demands by lowering output and increasing unemployment—the 1 percent decline in median US real income over the past year is only the beginning.

Tim Russert and the decay of the American media

Tim Russert and the decay of the American media

By David North and David Walsh

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Tim Russert, longtime moderator of NBC’s “Meet the Press” and the television network’s Washington Bureau Chief, died June 13 of a heart attack in Washington at the age of 58. Russert also hosted a CNBC/MSNBC weekend interview program and was a frequent correspondent and guest on NBC’s “The Today Show” and “Hardball.”

Russert was comparatively young, and he leaves behind a wife and grown son. It is appropriate to extend sympathy to his friends and family. However, inasmuch as the death of Russert is being treated by the political establishment and the media as a major national political event, one must treat it on those terms.

Indeed, tributes to the NBC newsman have filled the airwaves since his death on Friday. President Bush as well as Democratic presidential candidate Barack Obama and his Republican counterpart John McCain have all gone before the TV cameras to mourn his passing. The coverage of his death and the tributes themselves have been vastly out of proportion to the real significance and accomplishments, such as they were, of the deceased.

The treatment of Russert’s demise, in its own peculiar fashion, speaks more eloquently about the state of American journalism and the milieu of which he was a part than it does about Russert. No doubt there is shock over the abruptness and unexpectedness of his death, for it is a troubling reminder to the social elite that success, celebrity and immense amounts of money do not bestow immortality, or even, necessarily, a long life.

In the end, after all, Russert was a celebrity, little more than that. Was he an important or insightful journalist? Or a serious political thinker? There is no evidence to support such claims. In spite of his lengthy tenure as anchor of a major news program (he was the longest-serving moderator of “Meet the Press”), it is not possible to link Russert’s name to a significant journalistic work or even an instance of acute political analysis. On the contrary. He was a typical representative of what passes for journalism in the United States’ corporate-controlled media: conformist and philistine in his views, a purveyor of received wisdom who had no doubts whatever about the values and legitimacy of the political establishment.

One has only to consider certain of the events that occurred “on his watch”: the Clinton impeachment, the stolen 2000 election, September 11, the Iraq war and its aftermath. None of these events evoked from Russert a critical examination of the claims of the state and its representatives.

In each case, Russert’s essential role was to bolster the establishment and lull the population to sleep. His role in the Clinton-Monica Lewinsky scandal, an episode that did a great deal for his career, was particularly filthy. In the first days of the crisis, Russert breathlessly asserted that if the allegations about Clinton’s sexual impropriety were true, the president would have to resign. “Whether it will come to that,” Russert continued, “I don’t know, and I don’t think it’s right or fair to be in the speculation game. But I do not underestimate anything happening at this point. The next 48 to 72 hours are critical.” The population largely rejected the media campaign.

As the WSWS wrote in 2000, in a survey of television personnel: “Russert was one of those who claimed to be taking the moral high ground, castigating Clinton’s behavior, while spreading the salacious gossip put out by the right wing. (Typical Russert sound-bite: ‘There are lots of suggestions coming out of people close to Ken Starr that perhaps the Secret Service ‘facilitated’ [i.e., pimped] for President Clinton. Remember that code word—it was used by state troopers in Little Rock.... Was the Secret Service—was a Secret Service agent—an accomplice in trying to cover up a relationship with Monica Lewinsky?’ The fact that this story, and dozens like it, attributed to ‘unnamed sources,’ proved to be false, never stopped Russert and his media cohorts.)”

It is pathetic to hear eulogists praise, as a moment of unsurpassed inspiration and an indication of his uncanny ability to summarize complicated events in a popular manner, Russert’s holding up of a white board with the word “Florida” written three times on election night 2000. This on the very night when FOX News was rigging the election outcome.

The notion that Russert asked the “tough questions” of those he interviewed, advanced by a host of former colleagues on a tribute broadcast this Sunday in place of “Meet the Press,” is absurd.

During the run-up to the war, Russert, along with the rest of the media, provided a platform for Vice President Dick Cheney and others to present their lying claims about Iraq’s weapons of mass destruction without seriously calling any of them into question.

On March 16, 2003, only days before the US-led invasion of Iraq, Russert virtually handed his program over to Cheney, providing the latter with a propaganda opportunity in front of a large national audience, much of it skeptical about the administration’s claims. Russert’s particular role here was to politely raise certain doubts and allow Cheney to allay them.

For example, Russert asked Cheney: “What do you think is the most important rationale for going to war with Iraq?” The vice president replied, “Well, I think I’ve just given it, Tim, in terms of the combination of his development and use of chemical weapons, his development of biological weapons, his pursuit of nuclear weapons.” Russert responded: “And even though the International Atomic Energy Agency said he does not have a nuclear program, we disagree?”

Cheney: “I disagree, yes. And you’ll find the CIA, for example, and other key parts of our intelligence community disagree. ... And I think if you look at the track record of the International Atomic Energy Agency and this kind of issue, especially where Iraq’s concerned, they have consistently underestimated or missed what it was Saddam Hussein was doing. I don’t have any reason to believe they’re any more valid this time than they’ve been in the past.” That matter being settled, Russert was on to the next question.

In Bill Moyers’ documentary, Buying the War, Russert claims that he didn’t raise sufficient doubts about what Cheney and others were telling him because critics and skeptics weren’t contacting him. He tells Moyers: “To this day, I wish my phone had rung, or I had access to them.”

Millions were protesting in the streets, United Nations inspectors, the International Atomic Energy Agency, various foreign governments, not to mention the World Socialist Web Site and other left-wing publications, were refuting the Bush government’s claims, but none of this was accessible to Russert. In this, he’s probably being honest. Attuned to what the powerful thought and considering left-wing opinion to be illegitimate, Russert only had ears for Cheney and his fellow conspirators.

In any event, Russert learned nothing from the Iraq war. His program continued to provide a platform for the powerful and the cruel. In July 2006, in the immediate aftermath of the Israeli massacre in the southern village of Qana, in which dozens of women and children perished, he played host on “Meet the Press” to Israel’s ambassador to the United Nations, Dan Gillerman, who proceeded in a predictably cold-blooded fashion to blame the atrocity on Hezbollah.

It is revealing, in its own way, that Russert’s celebrity credentials were burnished with a bestseller about his father, “Big Russ.” It is worth recalling that William Shirer—the old CBS hand who worked with Edward R. Murrow in the 1930s and 1940s—established his reputation with Berlin Diary, his account of Germany in the first years of the Nazi regime. He later went on to write (after he had been witch-hunted out of the broadcast media) The Rise and Fall of the Third Reich. Other reporters from that era, such as Eric Sevareid, left behind memoirs that contained interesting social commentary.

Russert’s Big Russ, on the other hand, was nothing but a saccharine account of an America were “traditional” values were honored, where “men were men,” etc. In other words, a fictionalized America, conceived in the mind of a conformist. The book is part of a marketable genre, which includes Tom Brokaw’s The Greatest Generation, a self-deluding slap-on-the-back account of life in post-war America. It was fitting, in its own way, that Brokaw broke the news of Russert’s death.

Russert was born in Buffalo, New York in 1950, at the height of the Cold War and the anti-communist hysteria in the US, and grew up in an Irish Catholic, working-class family. In his various comments and writings there was not a hint of protest or rebellion against the upbringing. Russert had nothing but praise for the Jesuits and “the nuns.” He intended to become a lawyer or teacher in Buffalo, and had not political and media history intervened, Russert would most likely have become one more figure in and around the corrupt Democratic Party machinery in Erie County.

According to Maria Shriver, former colleague of Russert at NBC and presently wife of the governor of California, Russert had “faith in God, faith in country, faith in family.” There is no particular reason to doubt it.

If one wants to get some picture of life in the Buffalo area in the early 1950s, it is worth turning to Joyce Carol Oates’ You Must Remember This. In one of the key early scenes, the father of the lead character, the owner of a furniture store, is hauled in by police on charges of “suspected subversion” and “promulgating of Communist propaganda,” and interrogated for hours, for pointing out in an argument with a customer that the USSR and China “constituted a significantly larger land mass, in toto, than did the United States.”

There were however, others from similar backgrounds, particularly from Russert’s generation, who developed quite differently. Their formative experiences were the Vietnam War, the urban rebellions of the 1960s and the Watergate crisis, and they came to reject the hypocrisy, social conservatism and anti-communism of the church and state. There was never any indication in Russert’s public persona that he drew any critical conclusions from these experiences.

In 1976, after graduating from university and law school, Russert worked on the senatorial campaign of Democrat Daniel Patrick Moynihan, who made his name by attacking the poor and blaming them for their own poverty, and served as Moynihan’s chief of staff for five years. Russert then worked for Democratic Gov. Mario Cuomo, before leaving politics and going to work for NBC in 1984. One of his initial accomplishments was arranging for Pope Paul II’s first interview on American television.

Russert became a household name during the period of the severe decline of the American media, when ignorance, superficiality and cynicism became the hallmarks of all that passed for news and analysis. It is worth noting that in its original format “Meet the Press” had a single guest and a panel of questioners. It went through various permutations, until “Under Russert,” as one commentator notes, “the show was expanded to one hour, and became less of a televised press conference and more focused on Russert, with longer interviews and Russert hosting panels of experts.”

He became immensely wealthy in the process, like many of his media colleagues. Russert’s 6,220-square-foot vacation home on Nantucket Island, for instance, was valued at $7.2 million in 2008. When reminded of his humble beginnings and eventual success, Russert would apparently exclaim, “What a great country!” No—what bad times!

The media, especially NBC, MSNBC and CNBC, has devoted hours to coverage of Russert’s death. Why? What is being mourned? Human beings, even famous ones, die every day. There are individuals who have made significant contributions in the arts, sciences and even journalism whose deaths go largely unnoticed.

In the case of Russert, it would not be possible for his eulogists to produce a single one of his broadcasts that would evoke a significant emotional, let alone intellectual response—where one would watch and appreciate his insight. There is no “moment” remotely comparable to Murrow’s denunciation of Sen. Joseph McCarthy or Walter Cronkite’s criticism of the Vietnam War on CBS. There is not even a narration of an honest television documentary into some troubling aspect of the American social reality. There is next to nothing.

European powers to continue with Lisbon Treaty despite Ireland “No” vote

European powers to continue with Lisbon Treaty despite Ireland “No” vote

By Steve James

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The major European powers, led by Germany and France, have made clear they will seek to defy Ireland’s rejection of the Lisbon Treaty in the referendum held June 12. In a 53 percent turnout, 53 percent voted “No” while 46 percent voted in favour.

The vote should have torpedoed the adoption of the Lisbon Treaty, which requires unanimous backing by the European Union’s 27 member states. But José Manuel Barroso, the president of the European Commission, said, “Eighteen member states have already approved the treaty, and the commission believes the remaining ratifications should continue to take their course. I believe the treaty is alive.”

German Chancellor Angela Merkel insisted, “We must carry on,” while Foreign Minister Frank-Walter Steinmeier said, “We’re sticking firmly to our goal of putting this treaty into effect. So the process of ratification must continue.” A senior German government spokesman told the Irish Times, “Ratification will continue and either Ireland votes again or we try to come up with a new text.”

France takes over the rotating EU presidency next month and French President Nicolas Sarkozy has urged EU countries to continue ratification of the treaty. France’s Europe minister, Jean-Pierre Jouyet, said that “specific means of cooperation” could be invoked to deal with Ireland. “The most important thing is that the ratification process must continue in the other countries, and then we shall see with the Irish what type of legal arrangement could be found.”

The Labour government in Britain is also continuing with its ratification process. On Wednesday, the Lisbon Treaty is due to receive its third and final reading in the House of Lords. Europe Minister Jim Murphy said that it was now up to the Dublin government to come up with proposals to salvage the treaty. “The Irish government need to come to the European Council meeting this week to tell us, the UK and other governments in the European Union how they think we should be taking this forward based on the sovereign decision of the Irish people,” he said.

The European Council meets in Brussels later this week and Germany and France are leading an effort to isolate Ireland and push through ratification. They continue to threaten the creation of a “two-track” EU when faced with objections. This places maximum pressure on Britain to stand firm, which has always feared such an outcome. They will also seek to ensure that those parts of Lisbon that can be implemented without treaty amendment are swiftly adopted.

A propaganda campaign has been mounted to claim that a vote by less than 1 percent of the EU’s 490 million population should not scupper a treaty already ratified by 18 member states. Axel Schäfer, the German Social Democrats’ leader in the Bundestag committee on EU affairs, insisted, “We cannot allow the huge majority of Europe to be duped by a minority of a minority of a minority.... We think it is a real cheek that the country that has benefited most from the EU should do this. There is no other Europe than this treaty.”

Italian President Giorgio Napolitano said, “Now is the time for a courageous choice by those who want coherent progress in building Europe, leaving out those who despite solemn, signed pledges threaten to block it.”

These responses epitomise the undemocratic character of the entire EU project. The reality is that ratification was designed to prevent popular scrutiny, let alone a vote on the issue. Only the Irish government was constitutionally obliged to hold a vote because Lisbon required changes to Ireland’s constitution as participation in EU defence and security projects ended its formal position of neutrality. That the vote went against acceptance in a country that has supposedly been a major beneficiary of European largesse shows how widespread hostility is to the EU throughout the continent.

This places seemingly insurmountable difficulties before those urging a second Irish referendum, as happened previously in 2001-2002.

The Lisbon Treaty, signed December 2007, essentially continued—with some cosmetic changes—the European constitution rejected by voters in the Netherlands and France in 2005. Both treaty and constitution represented an effort by the European powers to forge a political, diplomatic and military apparatus for the EU trade and currency bloc to rival its major competitors in the United States, Russia and China.

Since the collapse of the Soviet Union, the European powers have repeatedly been frustrated in their efforts to project EU influence by the absence of foreign policy coherence and a military capability concomitant with the trade bloc’s vast economic weight. To overcome this, the treaty agreed to a “High Representative for the Union in Foreign Affairs and Security Policy,” leading a “European External Action Service,” a president of the European Council, consolidated policy making on security, justice, energy policy, research, and territorial cohesion.

The treaty also included measures to ensure that the EU’s “big four”—France, Britain, Germany and Italy—dominated decision-making in a bloc. National vetoes would be removed. In the run-up to the 2003 invasion of Iraq war, European foreign policy was hamstrung by US efforts to organise a “new Europe” of former Eastern bloc countries and Britain, against the “old Europe” of the continental powers.

The treaty also built on existing measures to tear up national service industry regulations in the interests of the largest and rapidly expanding EU utility corporations.

The “No” vote came as a shock to much of the Irish political establishment, who as late as the close of polls on June 12 were still predicting a close result in their favour. It is a major setback for newly installed Taoiseach (prime minister) Brian Cowen, who replaced Bertie Ahern six weeks ago after he resigned over allegations of financial corruption.

A coalition of the ruling Fianna Fail, Fine Gael, and the Labour Party all campaigned for a “Yes” vote, pointing to the substantial handouts directed towards Irish economic development over the years by the EU, describing it as a “patriotic duty” and even proof that the Irish people were “good Europeans.” Pope Benedict XVI even took the opportunity during a mass at St. Peter’s Square to describe Ireland’s Saint Columbanus as “one of the Fathers of Europe,” who could even be called a “European saint.”

The “No” vote expresses a deepening alienation of working people from both the Irish political elite, opposition to the undemocratic measures contained in the treaty and to the EU as a whole. Initial analysis of voting patterns suggested that in a broad sweep of urban and rural working class areas, the “No” vote was higher than in more prosperous areas, although turnout was lower. An Irish Times/ MRBI poll prior to the vote on the Lisbon Treaty showed that the “Yes” vote registered a majority only among the better-off ABC1 voters, while in the working class C2DE category there was a big majority for a “No” vote.

EU leaders might point to the subsidies directed towards once impoverished Ireland as an expression of the benefits derived by Ireland from the EU. But these subsidies were primarily spent on infrastructure and corporate grants to facilitate Ireland’s development as an export platform for US corporations seeking access to Europe and European companies looking for a low-tax regime close to the continent.

Many of these operations are in now the process of relocating to even cheaper areas in Eastern Europe. Simultaneously, a building boom and property speculation bubble are rapidly coming to an end. Two days before the referendum, figures showed that unemployment had passed the 200,000 mark for the first time since 1999. In the year to May 2008, unemployment rose 31 percent, with nearly 1,000 workers a week joining the dole queues. Unemployment increased 22 percent in one month in Dublin, while in County Wexford in the southwest of the island, another building hotspot, the increase was 40 percent.

Price inflation is also increasing, with an annual overall rise of 4.7 percent recorded in April. Food prices went up 8 percent, fuel costs 23 percent, and home heating oil increased a massive 47 percent. Overall, retail sales are down 3.2 percent since the start of the year. Mortgage costs, already crippling large sections of workers, increased 2 percent in one month alone. Residential mortgage debt now stands at 75 percent of Irish GDP, up from 24 percent in 1997. The Breugel think tank warned that the economic situation in Ireland had “darkened dramatically recently, amid severe downturns in the housing market.”

Another component of the “No” vote was the desire to uphold Ireland’s constitutional neutrality, which expressed, in a partial and distorted way, antiwar sentiment and opposition to the Irish government’s participation in the US and British war effort in Iraq by allowing military refuelling at Shannon airport.

But while the “No” campaign benefited from such sentiment, it was made up of groups that in no way articulated the social concerns and political interests of the Irish working class. The “No” campaign included many Catholic groups anxious to keep abortion illegal in Ireland and found its most prominent spokesman in pro-US businessman Declan Ganvey and his Libertas organisation. Both Ganvey and Sinn Fein, the only party in parliament calling for a “No” vote, opposed the treaty from the standpoint of upholding Ireland’s right to set corporate taxes independently of the EU, which presently stand at 12.5 percent, in order to retain a competitive advantage in attracting global investment. Many of the groups involved, including the Unite trade union, supported the EU and Ireland’s continued membership, differing only on the treaty itself.

A “No” vote, while expressing legitimate disaffection and opposition, is clearly inadequate—as the plans to continue with ratification demonstrate. The working class is in a political struggle against the major institution of big business in Europe and it needs its own political programme and leadership in order to take this forward. A significant role in preventing such a development is played by Ireland’s left groups, the Socialist Party and the Socialist Workers Party, both of which were active in the “No” campaign. It is they who ensured that workers were given no opportunity to delineate their stance from Libertas and its ilk, and who never elaborated anything amounting to an independent perspective on the central issue of Europe’s integration.

The Socialist Party centred its campaign on a series of statements from Joe Higgins, a member of the Dáil Éireann, the Irish parliament until he lost his seat last year. Higgins had promised in January 2008 that the Socialist Party would outline its perspective “counterposing a democratic, socialist Europe of workers to the capitalist club that the EU is.” But this was never elaborated in its published campaign material.

Higgins’s column on the eve of the vote, “Why you should vote No to Lisbon,” listed opposition to wage lowering, the European Court of Justice, to the attacks on public services and to militarism, but did not oppose the EU itself. Instead he intimated that the EU could be reformed, stating that he saw the Lisbon Treaty as a lost opportunity: “Lisbon should have been an opportunity to exclude public services once and for all from the rules of the market and international trade.”

The Socialist Workers Party made similarly vague criticisms of the EU, with its “Vote No” web site noting that the Lisbon Treaty makes “little provision for a social Europe,” “does nothing to address the lack of democracy” and “forces countries to increase military spending.”

Its reply to frequently asked questions on the Lisbon Treaty also explicitly advocates reform of the EU, stating, “The European Trade Union Confederation calling for an amendment to the Treaty. But any amendment to the treaty can only come about by an Irish No Vote forcing renegotiation.”

The party’s leading Irish trade union bureaucrat, Jimmy Kelly of Unite, was more explicit, writing in an April 2008 article that the Irish Congress of Trade Unions should demand the Irish government “postpone the Lisbon Treaty to allow time to address the issue of trade union rights” (emphasis added). He complained, “The Irish Government has failed to provide a basis for workers to view this Referendum as genuinely delivering on rights in the workplace or delivering on the Social Europe as set out in the original Lisbon Treaty (emphasis added).

The EU cannot be reformed. And there is no such thing as a “Social Europe.” The EU is a massive apparatus dedicated to the forgoing of a continent-wide trade and military bloc able to better compete against Europe’s rivals through the systematic destruction of wage and social conditions.

Unification of Europe is both a progressive and necessary goal, but it must be carried out by the working class in opposition to the all the rival cliques of capitalists and their political advocates, whether they favour greater EU integration or they oppose it.

Only the perspective of the United Socialist States of Europe, as part of a world socialist federation, opens the prospect of a peaceful, culturally and technically advanced Europe using its immense productive capacities to meet human need throughout the continent and worldwide. To take this perspective forward in Ireland demands the urgent construction of a section of the International Committee of the Fourth International.

What Happened to Housing?

What Happened to Housing?

Bill Aimed at Mortgage Crisis Stalling in Senate, Faces Potential Veto if Passed

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Earlier this week, Sen. Christopher Dodd (D-Conn.) took to the chamber floor and made a bold announcement about congressional efforts to tackle the nation's accelerating foreclosure crisis. "There is no question in my mind that the almost daily information we are receiving on the performance of our economy should continue to spur action on the part of this Congress," the Senate Banking Committee chairman said. "We hope to put on the president's desk by July 4 this comprehensive Financial Services/Banking Committee proposal."

But housing experts of all ideologies wonder if the prediction isn't more optimistic than realistic. Dodd and other Senate negotiators face the difficult task of reconciling their strategy with legislation crafted in the House. More important, the Bush administration contends that both chambers' bills go too far to bail out the lenders and speculators who contributed to the mess. The White House has threatened to veto the legislation.

(Matt Mahurin) The saga is playing out in a very different timeline than the negotiations held earlier in the year over another must-pass legislative package designed to prevent economic collapse. Under that deal, it took just days for Congress and the White House to agree on a tax rebate strategy, which went into effect in May. In contrast, the housing crisis is far more complex -- and far more contentious -- relegating progress to a crawl.

The delicate negotiations could mean that federal help for struggling homeowners won't arrive until late in the year -- too late for tens of thousands of families facing foreclosure. The possible delay concerns both liberal homeowner advocates and conservative economists, who agree that the free-falling market requires a stabilizing hand from Washington.

"It's certainly an urgent problem, and it's only going to get worse as time goes on," said Alice Chasan, editor of Shelterforce magazine, published by the National Housing Institute, an advocacy group. "Unfortunately, it's tied up with the presidential politics of the moment. It's very unclear that anything's going to happen in the next couple of months."

The sense of urgency appears to be justified. In May, nationwide foreclosure filings -- including default notices, auction sale notices and bank repossessions -- jumped to more than 261,000, according to figures released Friday by RealtyTrac, an online foreclosure database. The figure is 48 percent above that reported a year earlier, and 7 percent above April.

Most of the hike was attributable to repossessions, which "continued to surge in May -- posting a double-digit percentage increase from the previous month and more than twice the number reported in May 2007," said James J. Saccacio, chief executive officer of RealtyTrac. The trend pushed the number of bank-owned properties in the company's database to more than 700,000.

The additional supply only exacerbates the foreclosure problem. With the influx of houses arriving on the market in recent months, prices have dropped precipitously. And there's no evidence the trend is set to change. Rick Sharga, vice president of marketing at RealtyTrac, told The Associated Press that the worst won't arrive until the fall. "I don't think we've seen the high point," he told The AP.

Washington, most observers agree, must intervene to slow the free-fall. "Inaction isn't an option," said Desmond Lachman, an economist with the conservative American Enterprise Institute. "Just letting this thing play out would be very dangerous."

But there remains disagreement over how to tackle the problem.

For example, both the Senate and House proposals would establish a rescue fund through which the Federal Housing Administration could insure troubled loans. But the Senate bill would fill that fund using contributions from Freddie Mac and Fannie Mae, the nation's federally sponsored mortgage purchasers. House Financial Services Committee Chairman Barney Frank (D-Mass.) opposes that strategy, preferring to use the Freddie/Fannie pool to finance low-income housing. Frank's bill would expand the FHA using taxpayer dollars.

But according to the White House: "This attempt to shift costs to taxpayers constitutes a bailout."

Meanwhile, affordable housing advocates have criticized both chambers for failing to include language empowering bankruptcy judges to force lenders to renegotiate troubled mortgages at lower rates. Instead, both the Senate and the House bills would allow lenders to make that choice themselves. The carrot for lenders is that they can get the bad loans taken off their books. But there are no sticks forcing participation -- a concession to conservatives that riles the left.

"As long as we're relying on voluntary participation, it's difficult to assess the effectiveness," said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America.

Josh Nassar, vice president of federal affairs at the Center for Responsible Lending, agreed. "The legislation in Congress takes a positive step forward," he said, "but it continues to put the decisions in the hands of the same lenders who are responsible for the crisis."

Additionally, observers are questioning the effectiveness of the proposals being considered. The Congressional Budget Office estimates the bills would help only about 500,000 homeowners over the next four years. "It's a small percentage of those affected at a pretty steep price," said David John, an economist with the conservative Heritage Foundation.

But in an election year, lawmakers are under the gun to act, even if only to avoid campaign-trail criticism. "Many feel that they can't leave town without doing something," Fishbein said. "The question is whether it will address the problem or not. My guess is that they'll fall short."

That means Washington will likely be forced to address the foreclosure crisis again. "There's no question," Lachman said, "that a new administration will have to revisit it."

Bush's Deadly "Diplomacy"

Bush's Deadly "Diplomacy"

Norman Solomon

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With 219 days left in his presidency, George W. Bush laid more flagstones along a path to war on Iran. There was the usual declaration that "all options are on the table" - and, just as ominously, much talk of diplomacy.

Three times on Wednesday, The Associated Press reports, Bush "called a diplomatic solution 'my first choice,' implying there are others. He said 'we'll give diplomacy a chance to work,' meaning it might not."

That's how Bush talks when he's grooving along in his Orwellian comfort zone, eager to order a military attack.

"We seek peace," Bush said in the State of the Union address on January 28, 2003. "We strive for peace."

In that speech, less than two months before the invasion of Iraq began, Bush foreshadowed the climax of his administration's diplomatic pantomime. "The United States will ask the UN Security Council to convene on February the 5th to consider the facts of Iraq's ongoing defiance of the world," the president said. "Secretary of State Powell will present information and intelligence about Iraq's legal - Iraq's illegal weapons programs, its attempt to hide those weapons from inspectors, and its links to terrorist groups."

A week after that drum roll, Colin Powell made his now-infamous presentation to the UN Security Council. At the time, it served as ideal "diplomacy" for war - filled with authoritative charges and riddled with deceptions.

We should never forget the raptures of media praise for Powell's crucial mendacity. A key bellwether was The New York Times.

The front page of The Times had been plying administration lies about Iraqi weapons of mass destruction for a long time. Now the newspaper's editorial stance, ostensibly antiwar, swooned into line - rejoicing that "Mr. Powell's presentation was all the more convincing because he dispensed with apocalyptic invocations of a struggle of good and evil and focused on shaping a sober, factual case against Mr. Hussein's regime."

The Times editorialized that Powell "presented the United Nations and a global television audience yesterday with the most powerful case to date that Saddam Hussein stands in defiance of Security Council resolutions and has no intention of revealing or surrendering whatever unconventional weapons he may have." By sending Powell to address the Security Council, The Times claimed, President Bush "showed a wise concern for international opinion."

Bush had implemented the kind of "diplomacy" advocated by a wide range of war enthusiasts. For instance, Fareed Zakaria, a former managing editor of the elite-flavored journal Foreign Affairs, had recommended PR prudence in the quest for a confrontation that could facilitate an invasion of Iraq. "Even if the inspections do not produce the perfect crisis," Zakaria wrote the previous summer, "Washington will still be better off for having tried because it would be seen to have made every effort to avoid war."

A few months later, on November 13, 2002, Times columnist Thomas Friedman wrote that "in the world of a single, dominant superpower, the UN Security Council becomes even more important, not less." And he was pleased with the progress of groundwork for war, writing enthusiastically: "The Bush team discovered that the best way to legitimize its overwhelming might - in a war of choice - was not by simply imposing it, but by channeling it through the UN."

Its highly influential reporting, combined with an editorial position that wavered under pressure, made The New York Times extremely useful to the Bush administration's propaganda strategy for launching war on Iraq. The paper played along with the diplomatic ruse in much the same way that it promoted lies about weapons of mass destruction.

But to read the present-day revisionist history from The New York Times, the problem with the run-up to the Iraq invasion was simply misconduct by the Bush administration (ignobly assisted by pliable cable news networks).

Recently, when The Times came out with an editorial headlined "The Truth About the War" on June 6, the newspaper assessed the implications of a new report by the Senate Intelligence Committee. "The report shows clearly that President Bush should have known that important claims he made about Iraq did not conform with intelligence reports," The Times editorialized. "In other cases, he could have learned the truth if he had asked better questions or encouraged more honest answers."

Unfortunately, changing just a few words - substituting "The New York Times" for "President Bush" - renders an equally accurate assessment of what a factual report would clearly show: "The New York Times should have known that important claims it made about Iraq did not conform with intelligence reports. In other cases, The Times could have learned the truth if it had asked better questions or encouraged more honest answers."

Now, as agenda-setting for an air attack on Iran moves into higher gear, the mainline US news media - with The New York Times playing its influential part - are engaged in coverage that does little more than provide stenographic services for the Bush administration.

McCain And Graham Plan To Introduce Legislation Undermining Supreme Court Decision On Guantanamo

McCain And Graham Plan To Introduce Legislation Undermining Supreme Court Decision On Guantanamo

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Last week, the Supreme Court ruled that Guantanamo Bay detainees have the right to challenge their detention in civilian courts. Sens. John McCain (R-AZ) and Lindsey Graham (R-SC) wasted no time in publicly blasting the decision, saying they were “disappointed” in “one of the worst decisions in the history of this country.”

This ruling will inevitably lead to a “flood of new litigation” challenging the Bush administration’s right to hold these detainees, only one of whom has received a verdict. Detainees will then finally get a decision as to their status.

Today on Fox News Sunday, Weekly Standard editor Bill Kristol revealed that “very soon” — likely as early as next week — McCain and Graham will be introducing legislation to undermine the Supreme Court decision by setting up a “national security court”:

And I think you will see Senator Graham, accompanied by Senator McCain, come to the floor of the Senate very soon, like next week, and say, We cannot let chaos obtain here. We can’t let 200 different federal district judges on their own whim call this CIA agent here, say, ‘I don’t believe this soldier here who said this guy was doing this,’ you have to release someone,’ or, ‘Let’s build up — let’s compromise sources and methods with a bunch of trials. I mean, it’s ridiculous.

Watch it:

A national security court would envision a scenario “in which sitting federal judges would preside over proceedings in which prosecutors would make the case that a person should be detained.” But as Michael Hoffman and Ken Gude note in a paper for the Center for American Progress, this scenario is problematic and underestimates the U.S. criminal justice system:

Adopting a national security court system would send the United States down another unproven path prone to repeat the same mistakes. It would not further justice or American legitimacy. Rather, it would risk creating American courts that more resemble the tribunals of dictators than those of democracies. And that would be a strategic victory for Al Qaeda, not for Americans. […]

The criminal justice system, coupled with standard military trials when necessary, has and can further law enforcement, intelligence, and prevention efforts without undermining our fundamental liberties or our long-term efforts to combat terrorism. It is time to let it fully do that crucial work.

As ThinkProgress reported on Friday, at one time, McCain and Graham advocated a solution similar to the Supreme Court ruling. In 2003, they called on then-Defense Secretary Rumsfeld to “formally treat and process the detainees as war criminals or to return them to their countries for appropriate judicial action.” Clearly, things change when you’re running for a third Bush term.

Transcript:

KRISTOL: Then what does the federal judge do? Does he have an evidentiary hearing? Does he judge whether the CIA’s intelligence was correct, that their informant in Karachi was telling the truth, that the…

WALLACE: Yes. I mean, I think it’s clear that he does have a hearing.

KRISTOL: Does he call the CIA agent in, the CIA agent comes into court and says, I’ve got a…

WALLACE: Not the trial as to whether or not the person’s guilty, but whether or not they have right to detain him. […]

KRISTOL: This is totally uncharted waters. It’s utterly unmanageable. And I think what it means is Congress has to step in now and specify,

OK, if the court’s going to make us do this, we need to set up a system of a national security court that can handle these trials.

And this has been proposed by Andrew McCarthy, the former federal prosecutor who tried the blind sheik in New York and has a very good book out on the problems of trying to do this through the federal legal system.

Anyway, but you could do it. You could have a national security court. Senator Lindsey Graham is working on this.

And I think you will see Senator Graham, accompanied by Senator McCain, come to the floor of the Senate very soon, like next week, and say, We cannot let chaos obtain here. We can’t let 200 different federal district judges on their own whim call this CIA agent here, say, ‘I don’t believe this soldier here who said this guy was doing this,’ you have to release someone,’ or, ‘Let’s build up — let’s compromise sources and methods with a bunch of trials. I mean, it’s ridiculous.

So Congress has to act. Senator Graham and Senator McCain are going to insist on action. It will be interesting to see what Senator Obama’s response is if the serious legislative proposal is introduced to set up a way of doing this consistent with the Supreme Court decision.

WILLIAMS: Well, I’m glad to hear you say that, because I think what you’re saying is you’re agreeing basically with the 5-4 decision, because you’re saying there needs to be a structure, that you can’t simply hold people for an undetermined length.

And remember, this Guantanamo has been open six years — six years without resolving this. And they have only had plans to try — I think it’s 80 of the 270, and only 19 currently face any kind of court, have the opportunity to speak out and say, You know what? It wasn’t me that did it, or, I was caught in the wrong way.

And the military courts have said that occasionally they have swept up the wrong people. In fact, the named litigant in this case was someone who was taken from Bosnia, not from Iraq, not from Afghanistan. Bosnia. So he’s trying to make the case that he was in the wrong place at the wrong time.

So when you say, OK, let’s have a national intelligence court, that’s fine with me. But it seems to me that you are confirming — you’re not agreeing with Brit Hume. You’re saying, in fact, we need a structure that gives people the opportunity to come before the courts and say that I have been detained illegally and wrongfully.

And that’s a good thing. That’s protecting America’s rights and liberties.