Sunday, July 27, 2008

Putting the "Federal" Back in the Federal Reserve

PUTTING THE "FEDERAL"
BACK IN THE FEDERAL RESERVE

Ellen Brown

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In a July 19 Wall Street Journal article titled "Why No Outrage?", James Grant quoted Mary Lease, a 19th century Populist who urged farmers to "raise less corn and more hell." Grant notes that financial behavior that would have been met with outrage in the 19th century is now met with near-silence from a too-tolerant populace. For decades after the Civil War, monetary reform was a chief political issue, one around which whole political parties formed. Why is it hardly mentioned today? Grant suggests that the lack of outrage may be because the old 19th century Populists actually won:

"This is their financial system. They had demanded paper money, federally insured bank deposits and a heavy governmental hand in the distribution of credit, and now they have them. The Populist Party might have lost the elections in the hard times of the 1890s. But it won the future. . . . They got their government-controlled money (the Federal Reserve opened for business in 1914), and their government-directed credit [Fannie Mae and Freddie Mac]. In 1971, they got their pure paper dollar. So today, the Fed can print all the dollars it deems expedient and the unwell federal mortgage giants, Fannie Mae and Freddie Mac, combine [to] dominate the business of mortgage origination . . . ."

Mr. Grant may have answered his own question, in another way than he intended. Most people, evidently including Mr. Grant, actually think that the Federal Reserve is a federal agency; and that paper dollars are issued by the government; and that Fannie Mae and Freddie Mac are federal mortgage giants. The American people are silent because they have been duped into believing they have gotten what they wanted. In fact, what the people got was not at all what the Populists fought for, or what their leader William Jennings Bryan thought he was approving when he voted for the Federal Reserve Act in 1913. In the stirring speech that won him the Democratic nomination for President in 1896, Bryan expressed the Populist position like this:

"We say in our platform that we believe that the right to coin money and issue money is a function of government. . . . Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson . . . and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business. . . . [W]hen we have restored the money of the Constitution, all other necessary reforms will be possible, and . . . until that is done there is no reform that can be accomplished."

Bryan lost in 1896 and again in 1900, but he went on to lead the opposition in Congress. A major bank panic in 1907 led to a bill called the Aldrich Plan, which would have delivered control of the banking system to the Wall Street bankers. However, the alert opposition, led by Bryan, saw through it and soundly defeated it. Bryan said he would not support any bill that resulted in private money being issued by private banks. Federal Reserve Notes must be Treasury currency, issued and guaranteed by the government; and the governing body must be appointed by the President and approved by the Senate.

To get their bill past the opposition in Congress, the Wall Street faction changed its name to the Federal Reserve Act and brought it three days before Christmas, when Congress was preoccupied with departure for the holidays. The bill was so obscurely worded that no one really understood its provisions. Its backers knew it would not pass without Bryan's support, so in a spirit of apparent compromise, they made a show of acquiescing to his demands. Bryan said happily, "The right of the government to issue money is not surrendered to the banks; the control over the money so issued is not relinquished by the government . . . ."

That was what he thought; but while the national money supply would be printed by the U.S. Bureau of Engraving and Printing, it would be issued as an obligation or debt of the government to a private central bank. The Federal Reserve is wholly owned by a consortium of private banks; it is controlled by bankers; and it protects their interests. It issues Federal Reserve Notes (dollar bills) for the cost of printing them (or, more often, for the cost of entering numbers on a computer screen). This privately-issued money is then lent to the government, and it is owed back to the private Federal Reserve with interest. The interest is eventually refunded to the government, but only after the Fed deducts its operating expenses and a 6 percent guaranteed return for its bank shareholders.

Congress and the President have some input in appointing the Federal Reserve Board, but the Board works behind closed doors with the regional bankers, without Congressional oversight or control. Bank CEOs actually sit on the boards of the Fed's twelve branches. As just one recent example of the private control of public monies, in March of this year the New York Federal Reserve agreed in private weekend negotiations to advance $55 billion of the people's money so that JPMorgan Chase could buy Bear Stearns at the bargain basement price of $2 a share, down from a high of $156 a share. It was a hostile takeover, not approved by the Bear Stearns shareholders or the American voters. JPMorgan Chase is the bank founded by John Pierpont Morgan, who sponsored the Federal Reserve Act in 1913. Jamie Dimon, the current CEO of JPMorgan Chase, sits on the board of the Federal Reserve Bank of New York, which dominates the twelve Federal Reserve Banks; and he has huge stock holdings in JPMorgan Chase. His participation in the decision to give his bank $55 billion in Federal Reserve loans is the sort of conflict of interest that federal statute makes a criminal offense; but there is no one to prosecute the statute, because the banking lobby is too powerful to be denied. The banking lobby is powerful because private bankers, not the government, create our money and control who gets it. (See Ellen Brown, "The Secret Bailout of JPMorgan," May 13, 2008, www.webofdebt.com/articles; and "What's the Difference Between Lehman Brothers and Bear Stearns?", June 14, 2008, ibid.)

The Federal Reserve Act of 1913 was a major coup for the international bankers. They had battled for more than a century to establish a private central bank in the United States with the exclusive right to "monetize" the government's debt; that is, to print their own money and exchange it for government securities or I.O.U.s. The Federal Reserve Act authorized a private central bank to create money out of nothing, lend it to the government at interest, and control the national money supply, expanding or contracting it at will. Representative Charles Lindbergh Sr. called the Act "the worst legislative crime of the ages." He warned prophetically:

"[The Federal Reserve Board] can cause the pendulum of a rising and falling market to swing gently back and forth by slight changes in the discount rate, or cause violent fluctuations by greater rate variation, and in either case it will possess inside information as to financial conditions and advance knowledge of the coming change, either up or down.

"This is the strangest, most dangerous advantage ever placed in the hands of a special privilege class by any Government that ever existed. . . . The financial system has been turned over to . . . a purely profiteering group. The system is private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money.

In 1934, in the throes of the Great Depression, Representative Louis McFadden would go further, stating on the Congressional record:

"Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders. In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislatures; there are those who maintain International propaganda for the purpose of deceiving us into granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime.

"These twelve private credit monopolies were deceitfully and disloyally foisted upon this Country by the bankers who came here from Europe and repaid us our hospitality by undermining our American institutions."

As for Fannie Mae – the Federal National Mortgage Association – it actually began under Roosevelt's New Deal as a government agency. But like the Federal Reserve, Fannie Mae is now "federal" only in name. In 1968, it was re-chartered by Congress as a shareholder-owned company, funded solely with private capital. If it were a bank, today it would be the third largest bank in the world; and it makes enormous amounts of money in the real estate market for its private owners. In 1970, Freddie Mac (the Federal Home Mortgage Corporation) was created to provide competition and end Fannie Mae's monopoly in the secondary mortgage market. But Freddie Mac too is a wholly shareholder-owned, publicly-traded corporation.

Under a 1992 law, if either of these two mortgage giants is seen to be severely undercapitalized, it may be placed into government conservatorship. But the plan now being pursued is to bail out these private corporations by increasing their capital base with taxpayer money and their profit margins with greater access to Federal Reserve loans. The result will be to privatize profits to their management and shareholders while socializing risk to the taxpayers. We the people will foot the bill. If the people are going to bear the risk, we should reap the benefits. Either these two mega-corporations should take their licks in the market like any other private corporation, or they should be nationalized, delivering not just their debts but their assets to the taxpayers. Not just Fannie Mae and Freddie Mac but the Federal Reserve itself should be made truly federal entities, as the voters have been led to believe and their names imply. Remove the myth that these Wall Street-controlled entities act by and for the people rather than being run for private gain, and we will soon see the outrage Mr. Grant says is curiously missing.


Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves and how we the people can get it back. Her websites are webofdebt.com and ellenbrown.com.

U.S. Housing Overvalued By 20%

U.S. house prices overvalued by up to 20 percent: IMF paper

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The downward spiral of U.S. housing prices still has a way to go and homes were overvalued by between 8 percent to 20 percent in the first quarter of this year, according to research by an International Monetary Fund economist published on Friday.

In his report "What goes up must come down? House price dynamics in the United States," IMF economist Vladimir Klyuev used several economic techniques to determine by how much U.S. home prices are overvalued.

Klyuev drew from a government study of single-family home prices to conclude that values were "around 14 percent above equilibrium in the first quarter of 2008, with a plausible range of 8 to 20 percent."

His research showed that home prices became considerably overvalued from 2001 and while the housing market has started to correct itself, there is still a long way to go.

U.S. policy-makers are now trying to guide the housing market into a soft-landing after a five-year run-up in home values that ended in 2006.

The report also said that it is likely home prices will swing well below their equilibrium level before they start to recover.

Klyuev's research included data gathered by the U.S. Office of Federal Housing Enterprise Oversight which regulates mortgage-finance companies Fannie Mae and Freddie Mac and collects purchase price data.

Klyuev analyzed the dynamics of home prices and found the inventory-to-sales ratio the most important driver of changes in property values in the short run.

"Starts in foreclosures, which obviously add to inventory, seem to also exert additional downward pressure on prices," he added.

According to the research the bloated inventory-to-sales ratio, high foreclosure rates, and inertia in housing markets imply that recent price declines are likely to continue.

The research also considered whether the current fall in U.S. housing prices represented a nationwide bust.

"While the national price level is falling on every measure, there is an opinion that this decline might reflect oversized drops in a few isolated markets rather than a countrywide phenomenon," it said.

Feds Seize Two More Banks

Feds Seize Two More Banks

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Customers of two banks closed by federal regulators were assured that every penny of their money was protected, preventing lines of angry accountholders from forming Saturday.

The calm response was a stark contrast to the hundreds of angry customers who waited for hours earlier this month in Southern California to demand their money after IndyMac Bank's assets were seized.

The 28 branches of the 1st National Bank of Nevada and First Heritage Bank N.A. _ owned by Scottsdale, Ariz.-based First National Bank Holding Co. _ were closed Friday by the FDIC.

But Mutual of Omaha Bank bought all of the two banks' deposits, even those over the amount protected by FDIC insurance limits. IndyMac customers had to take a loss on whatever amount they had in the bank over the insurance limits.

One 1st National Bank of Nevada in downtown Phoenix didn't even have a note outside to tell customers about the trouble Saturday. But there were no customers outside to tell.

"I feel like the Maytag repairman _ there's just not much to do on the customer side of things," Federal Deposit Insurance Corp. spokesman David Barr said. "There's going to be no impact on the depositors whatsoever, except basically a name change," Barr said.

Insurance limits are typically $100,000, but some accounts, such as joint accounts, can have more money protected, Barr said.

On Monday, Mutual of Omaha will open the banks as its own branches, Barr said. During the weekend, accountholders can access their funds by writing checks or using ATM or debit cards.

Jeff Schmid, chairman and CEO of Mutual of Omaha Bank, said the acquisition of the new accounts aligns with the company's growth strategy to get aggressive with banking.

"We're very optimistic about these markets," said Schmid, who was in Scottsdale on Saturday to speak with his new employees. "This could be our finest hour."

Mutual of Omaha Bank has $800 million in assets and operates 14 retail branches in Nebraska and Colorado. It's a subsidiary of Mutual of Omaha, a 99-year-old insurance and financial services company with more than $19 billion in total assets.

The Office of the Comptroller of the Currency said in a news release that 1st National was undercapitalized and had experienced substantial dissipation of assets and earnings "due to unsafe and unsound practices."

Those practices "also weakened the bank's condition and seriously prejudiced the interests of the bank's depositors and the deposit insurance fund."

Another news release said First Heritage was critically undercapitalized and was likely to incur losses that would deplete all or nearly all of its capital.

As of June 30, the closed banks had total assets of $3.6 billion. That's down from $4.1 billion six months earlier. Most of the assets are in 1st National, while First Heritage N.A. accounts for $254 million.

The FDIC said the takeover of the failed banks was the least costly resolution.

Calls to 1st National executive vice president Joe Martony were not returned Saturday. No one could be reached at the First Heritage N.A.

1st National has 10 branches in Nevada and 15 branches in Arizona. First Heritage N.A. has three branches in Southern California.


FDIC takes over two more failed banks

28 branches scheduled to reopen Monday as Mutual of Omaha Bank

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U.S. regulators took over two banks on Friday and sold them to Mutual of Omaha Bank, the sixth and seventh bank failures this year as financial institutions struggle with a housing bust and credit crunch.

Two weeks after the Federal Deposit Insurance Corp seized IndyMac Bancorp Inc., the Office of the Comptroller of the Currency said it closed First National Bank of Nevada and First Heritage Bank NA of California.

First National, characterized as undercapitalized, had total assets of $3.4 billion and $3 billion in deposits. First Heritage, described as critically undercapitalized, had assets of $254 million and $233 million in deposits, regulators said.

Bill Uffelman of the Nevada Bankers Association said Friday the FDIC action “is a reflection of the times for the banks. It’s a poor economy.”

Uffelman cautioned against the sort of consumer concern that prompted many customers of IndyMac Bank branches to wait for hours in line to withdraw funds across Southern California last week after that bank was seized by federal regulators. All FDIC-insured bank deposits are guaranteed by the FDIC up to $100,000, he noted.

Nevada Gov. Jim Gibbons said the bank takeover will be closely monitored in Nevada “to ensure there’s minimal disruption to business and that employees’ jobs are protected as much as possible.”

The FDIC said the cost of the transactions to its insurance fund is estimated to be $862 million, adding that the two failed banks represent just 0.3 percent of $13.4 trillion in total industry assets at about 8,500 FDIC-insured institutions.

The FDIC said the 28 offices of the two banks will reopen on Monday as Mutual of Omaha Bank. Over the weekend, customers can access their money by writing checks, using automatic teller machines or debit cards.

Mutual of Omaha Bank currently has more than $750 million in assets and operates 14 retail branches in Nebraska and Colorado with commercial lending offices in Dallas and Des Moines, Iowa, the FDIC said.

It is a subsidiary of Mutual of Omaha, a 99-year-old insurance and financial services company with more than $19 billion in total assets.

Warnings of more failures
Top banking regulators have warned of additional insolvencies this year and next, but for now do not expect failures the size of IndyMac, which had $32 billion in assets and $19 billion in total deposits at the end of March.

IndyMac, the third largest U.S. bank failure, was regulated by the Office of Thrift Supervision and is expected to deplete the FDIC's insurance fund by between $4 billion and $8 billion.

IndyMac is being run by the FDIC while the agency looks to sell its assets.

The FDIC oversees an industry-funded reserve of about $53 billion used to insure up to $100,000 per deposit and $250,000 per individual retirement account at insured banks.

The agency also has a running tally of problem banks that its examiners closely monitor. At the end of the first quarter, 90 institutions were on the list that is expected to be updated next month.

First Heritage of Newport Beach, California, had three branches with customers comprised mostly of corporations, while First National of Reno, Nevada, had 25 branches. Both were owned by First National Bank Holding Co of Scottsdale, Arizona.

In addition to assuming all the deposits, Mutual of Omaha Bank will purchase about $200 million of assets and pay the FDIC a 4.41 premium to assume the deposits.

None of the entities are publicly traded.

U.S. Senate Nationalizes More Private Banking Losses

Senate OKs bill providing mortgage assistance

Bush pledges to sign legislation to help Fannie, Freddie

Congress completed work Saturday on the government's most sweeping response yet to the nation's housing crisis, sending to President Bush a bill designed to help homeowners avoid foreclosure, spur home buying and prop up struggling mortgage giants Fannie Mae and Freddie Mac.

The Senate, in a rare weekend session, overwhelmingly approved the measure, 72-13, a reflection of the election-year jitters on Capitol Hill over the troubled economy. Bush has said he will sign the bill, which the House approved 272-152.

"Today, Congress did more than send a bill to the president - we sent a message to American families that help is on the way," said Senate Banking Committee Chairman Chris Dodd, D-Conn., who helped write the legislation.

The measure's critics attacked it as a bailout of speculators and irresponsible borrowers at potentially huge cost to taxpayers.

"This bill is fraught with too much risk and too little protection to the taxpayer," said Sen. Christopher Bond, R-Mo., contending it would allow lenders to "dump their worst subprime mortgages" on the Federal Housing Administration.

GOP opposition

All the votes opposing the legislation were cast by Republicans.

Democrats, who control Congress, are looking at other proposals aimed at turning around the economy. These include debating in September a second election-year economic stimulus package that would provide $50 billion or more for bridge and road projects, home-heating assistance and other matters.

The bill passed Saturday, the American Housing Rescue and Foreclosure Prevention Act, contains a key provision that would allow the FHA to guarantee as much as $300 billion in lower-cost mortgages - provided that lenders accept significant losses.

The provision is expected to help at least 400,000 homeowners.

The bill would give the U.S. Treasury Department authority temporarily to increase its lending to Fannie Mae and Freddie Mac and buy their stock, a provision that Treasury Secretary Henry Paulson has called crucial to bolstering confidence in the companies and stabilizing housing finance markets.

The Congressional Budget Office recently estimated that there was a "probably better than 50 percent" chance that the federal bailout would not be needed. But if it is, it could cost taxpayers $25 billion, budget analysts said.

The measure includes about $15 billion in tax breaks, including a tax credit that is in effect an interest-free loan of as much as $7,500 for first-time home buyers.

It also funnels $4 billion to communities hard hit by foreclosures to buy and renovate abandoned properties, a provision that its supporters say would prevent blight and a decline in the value of neighborhood properties.

The measure gives states authority to issue an additional $11 billion in tax-exempt bonds to refinance troubled loans, provide loans to first-time home-buyers and finance low-income rental housing and millions for financial counseling.

It permanently would raise the cap on mortgages that Fannie Mae and Freddie Mac can buy and that the FHA can insure to $625,500 in high housing-cost markets. The bill also sets up a new regulator, the Federal Housing Finance Agency, to oversee the mortgage giants.

The two presumptive major-party presidential nominees, Republican Sen. John McCain and Democratic Sen. Barack Obama, each has expressed support for the measure but missed the vote. Obama was wrapping up his weeklong overseas trip; McCain was at his home in Arizona.

Foreclosures way up

The Senate action comes a day after a report that foreclosure filings nationally during the second quarter were up 121 percent from the same period a year ago.

The problem remains acute in California and Florida, which accounted for 16 of the top 20 metro foreclosure rates during the second quarter, with the Stockton and Riverside-San Bernardino areas Nos. 1 and 2, respectively, according to RealtyTrac.

Sen. Jim DeMint, R-S.C., forced the Saturday vote because Democrats refused to allow him a vote on a proposal to ban Fannie Mae and Freddie Mac from lobbying or making political donations to lawmakers.

"We can't have the people who are supposed to watch over these organizations getting money from these organizations," DeMint said. "At least if we're going to ask the American taxpayer to be on the hook for billions, possibly trillions of dollars, let's stop this."

Even if the program works, its goals are modest compared with the scope of the problem, said Mark Zandi, chief economist for Moody's Economy.com. He estimates that 5.5 million borrowers will default on loans by the end of 2009, with about half of those families losing their homes.

"If we're lucky enough to help 400,000 households," said Jared Bernstein, a senior economist at the Economic Policy Institute, "I'm afraid it's a drop in the bucket."

Senate Gives Final Approval to Sweeping Housing Bill

Senate Gives Final Approval to Sweeping Housing Bill

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Hoping to stretch a safety net under the nation’s tumbling housing market, the Senate on Saturday overwhelmingly approved a huge package of legislation that includes a program to save hundreds of thousands of families from losing their homes to foreclosure.

The legislation is the latest in a series of extraordinary interventions this year by the Bush administration, Congress and the Federal Reserve as they seek to limit shockwaves in the housing sector from rippling across the American economy and the world financial system. In the process, the central bank and taxpayers have taken on what critics warn are incalculable liabilities and risk.

The bill grants the Treasury Department broad authority to safeguard the nation’s two mortgage finance giants, Fannie Mae and Freddie Mac, potentially by spending tens of billions of dollars in federal money to prevent the collapse of the companies, which own or guarantee nearly half of the nation’s $12 trillion in mortgages.

To accommodate the rescue plan for the mortgage companies, the bill raises the national debt ceiling to $10.6 trillion, an increase of $800 billion and the first time that the limit on the government’s credit card has grown to 14 digits.

The Senate, convening for a rare Saturday session as it neared summer recess, approved the bill by a vote of 72 to 13, with 27 Republicans joining all the Democrats in attendance to support it. The measure now goes to President Bush, who has said he will sign it, perhaps early next week, to send a reassuring message to the credit markets.

The White House quickly issued a statement praising the vote, but also affirming opposition to nearly $4 billion in grants to local governments to buy and refurbish foreclosed properties, which Mr. Bush views as a giveaway to lenders. “It’s good that the Democratic Congress has finally acted,” Tony Fratto, the deputy White House press secretary said.

Lawmakers in both parties hailed the bill, saying it was crucially needed. “It will make a difference not only in the housing market but in the entire economy,” the majority leader, Senator Harry Reid of Nevada, said.

Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the banking committee, said prior to the vote, “We are in the midst of the most serious economic crisis to face our nation in many years. This bill is going to make a difference almost immediately.”

The federal intervention has certainly been bold. The nearly $29 billion loan by the Federal Reserve Bank of New York in March to orchestrate the sale of Bear Stearns to JPMorgan Chase & Company may seem small compared with the Federal Housing Administration’s authority, granted in the new legislation, to insure up to $300 billion in refinanced mortgages to help stem a tide of foreclosures.

Analysts, including the Congressional Budget Office, expect less than $100 billion of that authority to be used. The risk to taxpayers is minimal, analysts say, given higher insurance fees that will be charged to recipients of the refinanced loans.

And yet, even that $100 billion could seem small compared with the Treasury Department’s authority to spend unspecified amounts of tax dollars to rescue Fannie Mae and Freddie Mac if they are in peril of collapse.

The Treasury secretary, Henry M. Paulson Jr., an architect of the rescue plan, said he expected never to use the new authority. And the Congressional Budget Office predicted that any bailout between now and Dec. 31, 2009, when the authority sunsets, would most likely cost $25 billion or less, and that there was a better-than-even chance of no cost at all.

But the only real limit on the Treasury’s authority is the new $10.6 trillion debt ceiling. There is roughly a $1.1 trillion cushion between the new limit and existing federal debt of $9.5 trillion.

And naysayers in Congress who voted against the housing bill warned that the government was taking on too much risk, and that government aid would only reward irresponsibility by corporations and individuals.

“This bill has moral hazard written all over it,” Representative Jeff Flake, Republican of Arizona, said during the debate in the House on Wednesday. “We are pretending to chain a monster here and we are, instead, letting that monster loose.”

Senator Charles E. Grassley, Republican of Iowa, voted against the bill even though he had worked on many of its tax provisions. “This bill has fallen prey to the special interests on Wall Street and K Street at an unjustifiable expense to taxpayers and homeowners on Main Street,” he said in a statement.

Senator Jim DeMint, Republican of South Carolina, said the bill should have barred the mortgage companies from spending millions to lobby members of Congress.

Indeed, a provision in the bill underscores the continuing pessimism about the state of the economy. The provision gives the Federal Deposit Insurance Corporation the authority to create so-called bridge institutions for failing savings associations, mirroring a capability that has existed since 1991 for failed banks.

The new power will give the F.D.I.C. more latitude to continue the operations of savings associations like IndyMac in California, which failed earlier this month, and buy regulators time to work out a resolution at the lowest possible cost.

Politics aside, the measure approved by Congress was the most aggressive government intervention in the housing market since the 1989 response to the savings and loan crisis and perhaps the boldest attempt to aid troubled borrowers since the creation of the Home Owners’ Loan Corporation in 1933 as part of the New Deal.

In addition to the program to prevent foreclosures and the rescue plan for Fannie Mae and Freddie Mac, the 694-page bill contains a sweeping new regulatory structure for the mortgage giants, including the creation of an independent regulator, a stand-alone federal agency with a director appointed by the president and confirmed by the Senate.

The bill includes $15 billion in housing-related tax incentives, including a $7,500 tax credit for first-time homebuyers and business tax breaks for home builders and other large corporations.

There is also an array of items buried deep in the legislation, and the implications of some of them is not yet clear. There are provisions, for example, that grant or extend Section 8 federal housing subsidy eligibility to residents of specific properties in Malden, Mass., and San Francisco. And there is a provision tailored narrowly for Chrysler to ensure that it can benefit from a corporate tax incentive even though the company is now structured as a partnership not a corporation. The bill does not name Chrysler but rather describes an unnamed automobile manufacturer “that will produce in excess of 675,000 automobiles” between Jan. 1 and June 30, 2008.

Russia to Turn Cuba into a Base for Long-Range Nuclear Bombers?

'Nuclear bomber base' raises fears of a new Cuban crisis

The Russian military, furious at American plans to install a missile defence shield in Eastern Europe, is talking up the prospect of turning Cuba into a base for its long-range nuclear bombers.

Defence chiefs in Moscow are said to be pressing for the Kremlin to retaliate against the missile shield by placing strategic bombers off the American coast. The move threatens a rerun of the Cuban missile crisis of 1962, when the world teetered on the brink of nuclear war between the United States and the Soviet Union.

The Kremlin strongly opposes the deployment of ten interceptor missiles in Poland and a radar station in the Czech Republic, despite American assurances that the shield is aimed at rogue states such as Iran and poses no threat to Russia. President Medvedev threatened "retaliatory steps" at the G8 summit this month after Condoleezza Rice, the US Secretary of State, sealed an agreement with the Czech Republic. The Foreign Ministry said that Russia would react "with military-technical methods".

Yesterday Izvestia cited Defence Ministry sources as saying that crews from its TU160 Blackjack and TU95MS Bear long-range bombers had already visited Cuba to inspect a potential landing strip for use as a refuelling centre.

It claimed that facilities were also being considered in Venezuela, whose President, Hugo Chávez, agreed to step up military co-operation with Russia in talks with Mr Medvedev and Vladimir Putin, the Prime Minister, in Moscow on Tuesday.

The bases would host refuelling aircraft and maintenance for the nuclear bombers, which resumed round-the-clock patrols last August for the first time since the Cold War. General Pyotr Deinikin, former commander of the air force, said that they would allow Russia to maintain an almost permanent presence off the US coast.

The plan has not received official confirmation in Moscow and it was unclear whether Russia would base nuclear bombers permanently in Cuba or use the communist island and former Soviet ally solely as a refuelling centre. Last night Ilshat Baichurin, the Defence Ministry spokesman, dismissed the reports as "disinformation", according to the Interfax and RIA-Novosti news agencies.

The prospect has drawn a sharp response in the US. General Norton Schwartz, nominated as the new air force chief of staff, told a confirmation hearing in Washington DC on Tuesday that placing Russian bombers in Cuba "crosses a red line for the United States of America". He said: "I would certainly offer the best military advice that we engage the Russians not to pursue that approach."

Fidel Castro, the former leader of Cuba, entered the fray yesterday, praising his brother Raúl for refusing to comment on the possibility of hosting Russian bases. He said that Havana did not need to offer the US "any explanations or excuses", he wrote in a letter to the cubadebate.cu website.

Russia's nuclear bomber force has come into repeated contact with Nato jets since Mr Putin ordered the resumption of long-range patrols. Russia also organised its biggest naval exercises since the collapse of the Soviet Union in January. The RAF and other Nato jets shadowed the Russian task force as it test-launched nuclear missiles and practised strike tactics off the coast of France and Spain.

Mr Putin has threatened to place nuclear missiles in Kaliningrad, the Russian enclave surrounded by EU states, if objections to the missile shield and the expansion of Nato into Ukraine and Georgia are ignored.

Bush's Mass Pardons Predicted

Bush's Mass Pardons Predicted

By Brent Budowsky

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Editor's Note: As his presidency nears its end, George W. Bush will be faced with a tough choice: either run the risk, along with many of his top aides, of future prosecution for a variety of crimes from the "war on terror" -- or fashion a mass pardon for all those involved.

In this guest essay, former Democratic congressional aide Brent Budowsky predicts that Bush will take the latter course, even outdoing his father's lame-duck Iran-Contra pardons in 1992:

Bush will pardon himself, Vice President Cheney, and a long list of officials involved in torture, eavesdropping, destruction of evidence, the CIA leak case, and a range of other potential crimes.

As George Bush signs the pardons and boards the helicopter to depart Washington as his presidency finally ends, even then he and those pardoned will worry about the statute of limitations.

There is an important point to this, often not recognized in official Washington during the Bush years: When the unthinkable became a way of life, acts were committed that defied constitutional and legal principles in ways never done by an American president.

Torture alone violates international law, domestic law, criminal statutes, and American principles that date back to George Washington.

Eavesdropping without court order violates a statute, FISA, that includes severe criminal penalties. If the courts ultimately conclude that these laws were broken, as I predict they ultimately will, considering the number of individual violations, and the penalties for each violation, the potential sentencing liability for anyone convicted would be huge.

On the destruction of evidence, disappearing e-mails, claims of executive privilege that I predict will be clearly rejected by the Supreme Court after Bush has departed, arguably false testimony to Congress, attempts to cover up actions that violate the law, the list, again, goes on.

There will be a huge legal debate about the right of a President to issue pardons so sweeping in their language that they cover all these potential areas of legal liability, and very possibly, it cannot be done.

Congress should pursue every pending and possible legal challenge to claims of executive privilege so completely untenable under the law that even some conservative Supreme Court justices will refuse to uphold them, as conservative justices joined liberals ruling against Richard M. Nixon.

I predict a series of historic Supreme Court cases that will defeat most of the Bush executive privilege claims and permanently end attempts for royalist interpretations of the law that the Bush years embody.

The fact that Bush attempted to seize power in ways that negate the legislative and judicial branches of government, and the fact that Congress was not heroic in defending its rightful place in the separation of powers, do not change the fact that what is illegal is illegal.

But this is not merely a liberal issue.

There are many authentic conservatives, true Barry Goldwater Republicans, genuine libertarians, honorable strict constructionist conservative jurists and legal scholars who agree entirely that on occasions George Bush has attempted and at times executed seizures of executive power that violate the American Constitution and American statutes.

So, get ready for mass pardons.

Get ready for the long-held precedents of American law to be ultimately if belatedly upheld and spurious claims of executive privilege to be rejected.

Get ready for a long-overdue debate that has barely begun and will be triggered by the mass pardons that will be the last sorry act of the presidency of George W. Bush.

Brent Budowsky was an aide to Sen. Lloyd Bentsen and to Rep. Bill Alexander, then the chief deputy whip of the House. A contributing editor to Fighting Dems News Service, he can be read on The Hill newspaper where this essay first appeared. He can be reached at brentbbi@webtv.net.

4,000 U.S. Deaths, and a Handful of Images

4,000 U.S. Deaths, and a Handful of Images

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The case of a freelance photographer in Iraq who was barred from covering the Marines after he posted photos on the Internet of several of them dead has underscored what some journalists say is a growing effort by the American military to control graphic images from the war.

Zoriah Miller, the photographer who took images of marines killed in a June 26 suicide attack and posted them on his Web site, was subsequently forbidden to work in Marine Corps-controlled areas of the country. Maj. Gen. John Kelly, the Marine commander in Iraq, is now seeking to have Mr. Miller barred from all United States military facilities throughout the world. Mr. Miller has since left Iraq.

If the conflict in Vietnam was notable for open access given to journalists — too much, many critics said, as the war played out nightly in bloody newscasts — the Iraq war may mark an opposite extreme: after five years and more than 4,000 American combat deaths, searches and interviews turned up fewer than a half-dozen graphic photographs of dead American soldiers.

It is a complex issue, with competing claims often difficult to weigh in an age of instant communication around the globe via the Internet, in which such images can add to the immediate grief of families and the anger of comrades still in the field.

While the Bush administration faced criticism for overt political manipulation in not permitting photos of flag-draped coffins, the issue is more emotional on the battlefield: local military commanders worry about security in publishing images of the American dead as well as an affront to the dignity of fallen comrades. Most newspapers refuse to publish such pictures as a matter of policy.

But opponents of the war, civil liberties advocates and journalists argue that the public portrayal of the war is being sanitized and that Americans who choose to do so have the right to see — in whatever medium — the human cost of a war that polls consistently show is unpopular with Americans.

Journalists say it is now harder, or harder than in the earlier years, to accompany troops in Iraq on combat missions. Even memorial services for killed soldiers, once routinely open, are increasingly off limits. Detainees were widely photographed in the early years of the war, but the Department of Defense, citing prisoners’ rights, has recently stopped that practice as well.

And while publishing photos of American dead is not barred under the “embed” rules in which journalists travel with military units, the Miller case underscores what is apparently one reality of the Iraq war: that doing so, even under the rules, can result in expulsion from covering the war with the military.

“It is absolutely censorship,” Mr. Miller said. “I took pictures of something they didn’t like, and they removed me. Deciding what I can and cannot document, I don’t see a clearer definition of censorship.”

The Marine Corps denied it was trying to place limits on the news media and said Mr. Miller broke embed regulations. Security is the issue, officials said.

“Specifically, Mr. Miller provided our enemy with an after-action report on the effectiveness of their attack and on the response procedures of U.S. and Iraqi forces,” said Lt. Col. Chris Hughes, a Marine spokesman.

News organizations say that such restrictions are one factor in declining coverage of the war, along with the danger, the high cost to financially ailing media outlets and diminished interest among Americans in following the war. By a recent count, only half a dozen Western photographers were covering a war in which 150,000 American troops are engaged.

In Mr. Miller’s case, a senior military official in Baghdad said that while his photographs were still under review, a preliminary assessment showed he had not violated ground rules established by the multinational force command. The official, who spoke on condition of anonymity because the investigation was ongoing, emphasized that Mr. Miller was still credentialed to work in Iraq, though several military officials acknowledged that no military unit would accept him.

Robert H. Reid, the Baghdad bureau chief for The Associated Press, said one major problem was a disconnection between the officials in Washington who created the embed program before the war and the soldiers who must accommodate journalists — and be responsible for their reports afterward.

“I don’t think the uniformed military has really bought into the whole embed program,” Mr. Reid said.

“During the invasion it got a lot of ‘Whoopee, we’re kicking their butts’-type of TV coverage,” he said.

Now, he said the situation is nuanced and unpredictable. Generally, he said, the access reporters get “very much depends on the local commander.” More specifically, he said, “They’ve always been freaky about bodies.”

The facts of the Miller case are not in dispute, only their interpretation.

On the morning of June 26, Mr. Miller, 32, was embedded with Company E of the Second Battalion, Third Marine Regiment in Garma, in Anbar Province. The photographer declined a Marine request to attend a city council meeting, and instead accompanied a unit on foot patrol nearby.

When a suicide bomber detonated his vest inside the council meeting, killing 20 people, including 3 marines, Mr. Miller was one of the first to arrive. His photos show a scene of horror, with body parts littering the ground and heaps of eviscerated corpses. Mr. Miller was able to photograph for less than 10 minutes, he said, before being escorted from the scene.

Mr. Miller said he spent three days on a remote Marine base editing his photos, which he then showed to the Company E marines. When they said they could not identify the dead marines, he believed he was within embed rules, which forbid showing identifiable soldiers killed in action before their families have been notified. According to records Mr. Miller provided, he posted his photos on his Web site the night of June 30, three days after the families had been notified.

The next morning, high-ranking Marine public affairs officers demanded that Mr. Miller remove the photos. When he refused, his embed was terminated. Worry that marines might hurt him was high enough that guards were posted to protect him.

On July 3, Mr. Miller was given a letter signed by General Kelly barring him from Marine installations. The letter said that the journalist violated sections 14 (h) and (o) of the embed rules, which state that no information can be published without approval, including material about “any tactics, techniques and procedures witnessed during operations,” or that “provides information on the effectiveness of enemy techniques.”

“In disembedding Mr. Miller, the Marines are using a catch-all phrase which could be applied to just about anything a journalist does,” said Joel Campagna, Middle East program coordinator for the Committee to Protect Journalists.

New embed rules were adopted in the spring of 2007 that required written permission from wounded soldiers before their image could be used, a near impossibility in the case of badly wounded soldiers, journalists say. While embed restrictions do permit photographs of dead soldiers to be published once family members have been notified, in practice, photographers say, the military has exacted retribution on the rare occasions that such images have appeared. In four out of five cases that The New York Times was able to document, the photographer was immediately kicked out of his or her embed following publication of such photos.

In the first of such incidents, Stefan Zaklin, formerly of the European Pressphoto Agency, was barred from working with an Army unit after he published a photo of a dead Army captain lying in a pool of blood in Falluja in 2004.

Two New York Times journalists were disembedded in January 2007 after the paper published a photo of a mortally wounded soldier. Though the soldier was shot through the head and died hours after the photo was taken, Lt. Gen. Raymond T. Odierno argued that The Times had broken embed rules by not getting written permission from the soldier.

Chris Hondros, of Getty Images, was with an army unit in Tal Afar on Jan. 18, 2005, when soldiers killed the parents of an unarmed Iraqi family. After his photos of their screaming blood-spattered daughter were published around the world, Mr. Hondros was kicked out of his embed (though Mr. Hondros points out that he soon found an embed with a unit in another city).

Increasingly, photographers say the military allows them to embed but keeps them away from combat. Franco Pagetti of the VII Photo Agency said he had been repeatedly thwarted by the military when he tried to get to the front lines.

In April 2008, Mr. Pagetti tried to cover heavy fighting in Baghdad’s Sadr City. “The commander there refused to let me in,” Mr. Pagetti said. “He said it was unsafe. I know it’s unsafe, there’s a war going on. It was unsafe when I got to Iraq in 2003, but the military did not stop us from working. Now, they are stopping us from working.”

James Lee, a former marine who returned to Iraq as a photographer, was embedded with marines in the spring of 2008 as they headed into battle in the southern port city of Basra in support of Iraqi forces.

“We were within hours of Basra when they told me I had to go back. I was told that General Kelly did not want any Western eyes down there,” he said, referring to the same Marine general who barred Mr. Miller.

Military officials stressed that the embed regulations provided only a framework. “There is leeway for commanders to make judgment calls, which is part of what commanders do,” said Col. Steve Boylan, the public affairs officer for Gen. David H. Petraeus, the top commander in Iraq. For many in the military, a legal or philosophical debate over press freedom misses the point. Capt. Esteban T. Vickers of the First Regimental Combat Team, who knew two of the marines killed at Garma, said photos of his dead comrades, displayed on the Internet for all to see, desecrated their memory and their sacrifice.

“Mr. Miller’s complete lack of respect to these marines, their friends, and families is shameful,” Captain Vickers said. “How do we explain to their children or families these disturbing pictures just days after it happened?”

Mr. Miller, who returned to the United States on July 9, expressed surprise that his images had ignited such an uproar.

“The fact that the images I took of the suicide bombing — which are just photographs of something that happens every day all across the country — the fact that these photos have been so incredibly shocking to people, says that whatever they are doing to limit this type of photo getting out, it is working,” he said.

CAN HAZARDOUS WASTE BE SAFELY REMOVED FOR OUR BODIES?

CAN HAZARDOUS WASTE BE SAFELY REMOVED FOR OUR BODIES?

By: David Getoff

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Your body is loaded with poisons which have been increasing since conception. What does the research show? What illnesses and health conditions are greatly increased by having these poisons in your body? Are there any safe ways to reduce your “toxic load” also referred to as “body burden”? Can reducing these toxins also reduce symptoms, extend life, and prevent disease? These questions and more will be covered in the paragraphs below.

In simple language, a toxin is a substance which is toxic or poisonous in any way to the body. Some toxins can cause death rapidly, such as a bite from an extremely poisonous snake or other reptile, or breathing in the vapor of an extremely poisonous gas in a high concentration. Most toxic substances to which humans are generally exposed are far more insidious and take years or decades worth of continual damage before the actual symptoms appear.

Poisons are always dose related. The same chlorine, fluorine or hydrogen sulfide gas that can kill someone in a matter of minutes, will cause far less harm, and symptoms from which a person can recover, at much lower concentrations. Nitrous oxide (laughing gas) is very poisonous in high concentrations, but in low concentrations and when mixed with adequate air or oxygen, has been used for decades as an anesthetic in the dental industry. The rotten egg smell which is observed with even minute concentrations of hydrogen sulfide gas becomes extremely deadly when this gas is in higher concentrations.

The second issue is that of exposure time. It is well documented that inhaling smoke from the chemically treated tobacco in commercial cigarettes can increase the risk of lung cancer. Will this risk increase if only one or two cigarettes have been smoked in a lifetime? I would highly doubt it. It takes many years of regular smoking before obvious damage generally becomes noticeable. Even after a decade, it is only seen in a small percentage of individuals and most often not in those with truly adequate intakes of protective nutrients. This is why Japan with its consumption of high nutrient seaweeds, and a per capita cigarette consumption far higher than in the U.S., has a much lower rate of lung cancer.

In addition to cumulative exposure, an even more important issue is interactive exposure of multiple toxins. In many cases, one poison may be only mildly toxic but when it exists in the body in combination with a second or third (or dozens) of other mildly toxic poisons, the effects become multiplied hundreds or even thousands of times. The best example of this was an experiment done with rats. The LD-1 of lead (the dose which would kill one rat out of a hundred) was mixed with the LD-1 of mercury, and these two combined to give a tiny lead and mercury dose which instead of killing just two rats out of 100, it killed the entire 100! This is why the few safety studies which are carried out on cleaning products, pesticides, herbicides, fungicides and other chemicals are almost totally useless. They always test only single chemicals and never multiple exposures in the way we are exposed to them in real life. Let me just take a moment to say that one of the best independent web sites of a nonprofit “watchdog” agency, where you can read more about our body burden of toxins, is the Environmental Working Group at www.EWG.org. Please support them as they are monitoring the polluters and looking out for our health and the health of those we love.

A few of the well researched poisons and some of the places they may be found in our daily lives include:

Chlorine--in our drinking water, our laundry and, and many household cleansers-
Chloramines--in some drinking water in place of or in addition to chlorine-
Fluoride--in our drinking water, tooth pastes and still used by less knowledgeable dentists-
Toxic chemicals in our air fresheners, deodorizers and “plug ins”-
Pesticides, herbicides and fungicides--in and on our fruits and vegetables and in our air-
Heavy metals such as the mercury in every silver amalgam dental filling-
Hormones, steroids and antibiotic residues-in our meats, dairy and farm raised fish-
Numerous toxic chemicals--in cleaners, polishes and solvents we use in our homes-
Hundreds of poisons in small amounts in the air we breathe (worse indoors)-
Toxic chemicals- in the stain repellents on our new upholstered furniture-
The chemicals that give that “new car” smell-
Formaldehyde which out gasses from carpeting and press board in our homes-
Toxic vapors released from the toner in our copiers and laser printers-
Fire retardant chemicals in our furniture, mattresses, and children’s clothing-
Numerous different types of chemical “additives” in our foods and toiletries-

The list above is just the tip of the iceberg, but I wanted to be sure you understand how extensive and invasive these chemicals are in our homes and in our lives.

The conditions for which there is published research documenting the connections between some of these poisons and diseases include cancer, Parkinson’s, ALS, Alzheimer’s, multiple sclerosis and many neurological diseases of “unknown origin”. The MD, PhD experts at the scientific conferences I attend each year continue to mention a very important disease link. They keep saying that almost every degenerative disease, auto immune disease, mental or emotional condition and a plethora of others, are most likely caused or greatly aggravated by the numerous toxins in our bodies. These same toxic substances are the ones which our industrial society continues to generate more and more of every year. These same poisons are the ones which most of us unknowingly (or knowingly) use in our homes and businesses as well as on our bodies and in our mouths every day.

Luckily, it is possibly to reduce our risks by reducing our body burden of these chemicals through whole body detoxification. In most cases I, and numerous other professionals around the world, have seen numerous symptoms reduce or vanish completely as the individual’s toxic load is gradually reduced by proper detoxification.

Remember, in most people, these toxins have been accumulating for a very long time. Even though the symptoms may have begun only in the last couple of weeks (or years) this is simply due the body finally becoming so overloaded that it could no longer handle the poisoning that had been going on for a lifetime. It is because of this, that the detox MUST BE DONE SLOWLY! Imagine never cleaning your home for the last 20-50 (or more) years and then having someone with a commercial vacuum cleaner move through the house. You would stir up so much dust that you would have to stop immediately and would be coughing for hours. In the case of detoxification of the body, it might even send you to the hospital. Detoxification MUST be done correctly and slowly. The body must be “prepared” for the detox process. This is done by using special formulas to help support and detoxify both your liver and kidneys for a month or more BEFORE you begin to actually pull toxic chemicals from your tissues, into your blood, for elimination through these two organs. I always make it VERY CLEAR to my patients and students that the goal is to never rush but to always be moving forward. The direction (forward-less toxins) is what is important, not the speed. If you try to build a house in a month, you will have a mess and not a house.

There are so many benefits to reducing our toxic load that they are almost endless but a few may include (everyone is different); more energy, better elimination, less or no more headaches, better and more recuperative sleep, improved memory, pain reduction, reduced tingling in body parts, regulation of irregular heart beat, better hearing, improved smell or taste, and many others. The single most important benefit for many is the huge reduction in the risk of developing numerous degenerative and even fatal diseases.

If we continue to expose ourselves to all of the same toxins every day, then it will be a great deal more difficult (and slower) to rid the body of those which have already accumulated in our tissues. Learning where these poisons come from and what must be done to begin the detoxification process is not an extremely complicated educational endeavor. The education will take a bit of time and a commitment on your part just like any important thing you have ever decided to learn how to do. The application of this important knowledge can extend your life, reduce your risks of numerous extremely undesirable health conditions and make you a much happier healthier person. I have even seen the detoxification process save marriages and relationships as it can make huge differences in emotions as numerous emotion disrupting poisons are slowly eliminated from the body.

Since the process of detoxification MUST be carried out correctly, it is not possible to cover it in a short article. Since too many people will not read a long book, I have produced a very comprehensive 2 hour video (DVD) which teaches the process in a clear and easily understandable manner. Included with the DVD is a CD for your computer. I have found that it is simply too difficult for viewers to take adequate notes on a topic like this.

The CD I include contains all of the additional necessary information in printable PDF format. I have specified the products which I use in my office with my patients. I have included the doses and procedures I use and the order that must be followed. I have included companies from which you should be able to find the products that I discuss. In order to be certain that I DO NOT violate any FDA regulations I do not tell you which exact product to use. Since I often use a different kidney, liver, lymphatic or detox product with different patients, it would be impossible for me to specify your exact products on the CD and DVD and I might be violating the FDA’s treatment doctrine. I do however give you all the best products and methods of use. Whichever products you decide to use, if you should chose to begin a detoxification program for your health, you will benefit tremendously. I even give you information on learning the energetic testing method I use in my office to discover which exact product is best for each of my patients.

I put a great deal of effort and love into the production of my DVD’s. I sincerely hope that anyone who views them and makes use the knowledge I provide, will get all the benefits they are seeking.

I would wish you good luck, but it is my expert experience that luck has little to do with better health. Proper and valid knowledge combined with correct and orderly application of the knowledge are the keys to almost every goal in life. Improved health is no different and so I wish you the desire to improve your health and the necessary effort to carry out this important desire.

David is Board Certified Clinical Nutritionist, a Board Certified Traditional Naturopath and a Certified Nutritional Consultant. He is an elected member of both the American College of Nutrition and the International College of Integrative Medicine as well as a Fellow of the American Association of Integrative Medicine. David is a Registered Naturopath in the District of Columbia and a Licensed Naturopath in the state of North Carolina. He is a Licensed nutritionist in the State of New York and is an approved continuing education provided for the state of California Board of Registered Nursing. David has given paid presentations at the Boulderfest Nutritional Medicine conference, the Southwest College of Naturopathic Medicine, and a number of other national conferences. David has also appeared on a numerous both broadcast and web based radio shows and is the Vice President of the world renowned Price-Pottenger Nutrition Foundation.

During this life long learning process, David has investigated many dietary variables. He has investigated numerous types of vegetarian diets, macrobiotics, raw food choices, microwave cooking, numerous fruits and vegetables, animal foods and the best ways to cook them as well as how our foods are grown and raised.

David has 11 DVD topics including Eating for Optimal Health, Cancer, Diabetes, Heart Disease, Detoxification and more. David’s entire course is available both as a set of DVD’s and as a set of CD’s. Not being satisfied with just producing video DVD’s, David recently began adding a computer CD to most of the boxes so that he can include additional information for the purchaser, covering much more information with additional specific recommendations. His passion for healing and learning remain as strong as ever.

Website: www.Naturopath4you.com

E-mail: Naturopath4U@aol.com

Bill Moyers Takes Us to the Heart of the Mortgage Meltdown

Bill Moyers Takes Us to the Heart of the Mortgage Meltdown

By Bill Moyers and Rick Karr
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Correspondent Rick Karr takes viewers to Slavic Village, one of the hardest hit neighborhoods in the nation when it comes to the spate of foreclosures caused by the subprime mortgage crisis.


Americans Say No to War with Iran: Will Washington Listen?

Americans Say No to War with Iran: Will Washington Listen?

By Sarah van Gelder

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Two weeks ago, I was alarmed to learn that congressional Democrats were sponsoring Resolution 362, which encourages what amounts to an act of war against Iran.

Today, there are more than 230 co-sponsors of the House resolution, but there is also growing mobilization to stop passage of Res. 362. What is especially stirring opposition is the provision that calls for:

"Prohibiting the export to Iran of all refined petroleum products; imposing stringent inspection requirements on all persons, vehicles, ships, planes, trains, and cargo entering or departing Iran; and prohibiting the international movement of all Iranian officials not involved in negotiating the suspension of Iran's nuclear program."
Implementing this would require a blockade, according to a letter from three retired Pentagon officials, and, unless sanctioned by a Security Council resolution, would constitute an act of war.The good news is that a growing outcry from the American people is causing some co-sponsors to have second thoughts, and the momentum for passage of the resolution may be weakening. Among them is Rep. Robert Wexler (D-FL), who says in a July 9 blog:
"Given my growing concerns regarding this resolution, including its failure to advocate for direct American engagement with Tehran and open language that could lead to a U.S. blockade of Iran, I will lead an effort to make changes to this resolution before it comes to the Foreign Affairs committee for a vote."
Rep. Barney Frank of Massachusetts has gone one step further: "I'm all for stricter sanctions against Iran, but the blockade part goes too far," he told the Valley Advocate of Northampton, MA. "I'm going to call the sponsors and tell them I'm changing my vote." Rep. William Lacy Clay (D-MO) withdrew his co-sponsorship on July 9.The Seattle Post-Intelligencer, editorialized against the resolution on June 24:
" ... we are casually giving our government the right to control Iran's borders using naval blockades. Might that be construed as an act of aggression? Only if we pay any mind to the rules set forth by the United Nations ... stating that such a unilateral blockade constitutes an act of war. So, are supporters of Res. 362 asleep at the wheel, or are they just anxious to drag us into another illegal war?"
This is a familiar discussion to those who watched the build-up to war in Iraq. This time, however, former secretaries of state from both Democratic and Republican administrations are on the same side. According to The Los Angeles Times, five of them -- Colin Powell, Henry Kissinger, James Baker, Warren Christopher, and Madeleine Albright -- agreed at a recent round-table discussion that it is time to open a dialogue with Iran. The outcry against an attack on Iran is already having an effect, and there are plans for more. United for Peace and Justice, for example, is organizing "Days of Action" across the U.S. July 19-21.

What are the threats against Iran really about? Despite what you may have read, this issue is not about nuclear proliferation -- in fact an attack would increase the likelihood that Iran would acquire a nuclear weapon, according to the International Atomic Energy Agency Director General Mohamed ElBaradei. The Nobel Peace Prize winner told Al Arabiya television last month that if there was a military attack on Iran, he would resign:

"I don't believe that what I see in Iran today is a current, grave and urgent danger. If a military strike is carried out against Iran at this time ... it would make me unable to continue my work ... A military strike, in my opinion, would be worse than anything possible. It would turn the region into a fireball ... If you do a military strike, it will mean that Iran, if it is not already making nuclear weapons, will launch a crash course to build nuclear weapons with the blessing of all Iranians, even those in the West."
It's also not about how much extra we are all paying for gasoline and oil as a result of our threats against Iran, although the National Security Network estimates that U.S. saber-rattling is already driving up prices by $30-$40 per barrel of oil. If threats turns into active conflict, oil prices will really take off. The question now is whether we will pursue another illegal and disastrous war, which the American people -- including Jewish Americans -- don't want. Will we destroy more American lives and those of Iranians. (You can see a slide show of life in Iran as a reminder of the human beings who are in the crosshairs.) We have a crucial choice before us: Will we continue a unilateral strategy of global domination? Or will we switch to a post-superpower strategy that can actually deal with the threats of nuclear proliferation, extreme poverty, and climate disruption. This is the option we explore in the Summer 2008 issue of YES! Magazine. Will we continue spending billions on the military in order to control the world's declining fossil fuel resources and shipping channels (and to make sure our corporations have access to both)? Or will we invest those funds in the safe, clean, domestic sources of energy that can create jobs at home and power our future without compromising our moral standing, the stability of our climate, and human lives?

This is a critical choice point for all of us. And this time, we can't say we didn't see the consequences of our actions.

Free College for Poorest Students Puts Ivy League to Shame

Free College for Poorest Students Puts Ivy League to Shame

By Leonard Doyle
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Berea University in rural Kentucky is one of the wealthiest colleges in America but it only accepts the poorest applicants. The dropout rate is negligible and its students go out into the world debt-free, unlike the majority of those who emerge every year from America's universities, proudly clutching a degree but burdened by massive debts.

Berea is lucky. It has a $1bn endowment which, wisely invested, produces enough income, topped up by fundraising, to teach 1,500 students. Some of Berea's students even leave with money in their pockets.

Alex Gibson graduated in philosophy this year with $17,000 to his name. Now he is off on a year-long world study tour, funded by a generous travel grant.

Although it ranks among the wealthiest colleges in the nation because of its trust fund, Berea is not one of America's elite colleges. Those are the crown jewels of the US education system and they are far wealthier than Berea.

Harvard's endowment is worth $35bn for example; Yale's $23bn; Stanford's $17bn and Princeton's $16bn -- amounts that make them among the world's richest universities. But there is a drumbeat of criticism about whether they are doing enough for the public good to deserve their tax-free status or just hoarding money for the benefit of an intellectual elite.

Harvard (annual tuition $35,000) is now racing to offer reduced tuition fees to low-income students and protect its tax-free status. But middle-class parents are so furious at the 11 per cent average annual rise in the tuition costs at run-of-the-mill colleges that it has now become an election issue.

Barack and Michelle Obama only paid off their student loans recently and he has promised to bring radical changes. One proposal is to provide free college tuition in return for a year's community service work. Mr Obama also wants a GI Bill, of the sort that gave 7.8 million veterans of the Second World War a chance to attend college. John McCain, his opponent, opposes it, saying it would deplete the ranks of the military.

As parents across the country write out their first tuition checks, the focus has turned to the issue of affordable education. And Berea's no-fee model which has been around for 158 years, is suddenly attracting attention.

The college uses its nest egg to attract students who otherwise could not afford college and draws exclusively from the bottom of the economic pile. It is extremely selective, rejecting 75 per cent of applicants as it tries to find those with the most potential. Those who apply have often endured appallingly bad secondary education and come from dysfunctional homes.

Mr Gibson is one of those and he has thrived at Berea. He earned his savings working on-campus, a requirement of this unusually public-spirited university. Every student must put in at least 10 hours a week, whether helping on the college farm, working in the admissions department or making furniture in Berea's crafts workshop.

Mr Gibson did community outreach. "It was great," he said, "we organised anti-Iraq war demonstrations."

Though not, by his own admission, a top scholar or the hardest worker, he also pulled in lots of academic scholarships.

"Every department has lots of money to give away. It's a question of applying," he said. The coup de grace was an award of $25,000 to finance his round the world trip starting in a week.

Mr Gibson, who is black, will spend his time studying biracialism, beginning in Tokyo next week. "I come from one of the poorest and most disturbed backgrounds you could imagine," he said. "All my family were involved in violence and drugs and I was brought up by a single parent and then no parents when my mother died while I was 16."

"Living in rural Appalachia, I suffered some extreme racism and it is only thanks to this college that I am now in this lucky situation."

Friends of his at other universities are not so lucky. One is paying back $37,000 after a three-year degree. Next year, Mr Gibson will attend graduate school in Pennsylvania, where he hopes to qualify as a lawyer and possibly enter politics.

For many US parents, the thrill of a letter of acceptance is soon spoiled by the arrival of the first tuition bill. For millions of working families, the pathway to the American dream runs straight through a college campus. But fees are going through the roof.

Ivy League members

Brown University

Endowment: $2.8 bn

Tuition and fees per year: $36,300

Columbia University

Endowment: $7.15 bn

Tuition and fees: $37,200

Cornell University

Endowment: $5.5 bn

Tuition and fees: $34,800

Dartmouth College

Endowment: $3.76 bn

Tuition and fees: $35,300

Harvard University

Endowment: $35 bn

Tuition and fees: $35,000

University of Pennsylvania

Endowment: $6.78 bn

Tuition and fees: $35,900

Princeton University

Endowment: $15.8 bn

Tuition and fees: $34,300

Yale University

Endowment: $22.5 bn

Tuition and fees: $34,500