Friday, October 3, 2008

The Senate bailout bill: How the Democrats do the bidding of Wall Street

The Senate bailout bill: How the Democrats do the bidding of Wall Street

By Barry Grey
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The revised Wall Street bailout bill passed by the US Senate on Wednesday goes substantially beyond the version voted down Monday by the House of Representatives in committing taxpayer money to prop up the banks. It also adds $150.5 billion in tax breaks, mainly for corporate interests.

All of the changes from the defeated House bill incorporate pro-business proposals pushed by right-wing Republican House members who opposed the original measure, as well as provisions for which banking and corporate interest have been lobbying.

For example, the Senate bill raises the limit on bank accounts insured by the Federal Deposit Insurance Corporation (FDIC) from $100,000 to $250,000, a measure that largely benefits the wealthy and provides a bigger backstop to the speculative activities of the banks.

The banks will not be forced to pay premiums to finance the increased government insurance for their deposits. Instead, the FDIC will be given an unlimited line of credit by the US Treasury—meaning taxpayer money will be used to cover the billions of dollars in deposits squandered by failing banks. This provision could add many billions to the price tab to be picked up by the American people.

The Senate bill urges a change in accounting rules, to allow the banks to value their assets at the price at which they purchased them, rather than the price they can now fetch on the market. The banks have been lobbying furiously for this provision, because it will allow them to conceal their losses on their balance sheets, overvalue their asset-backed securities and other speculative holdings, and offload a portion of them to the Treasury at inflated prices.

The tax breaks are apportioned to a variety of business interests, including, according to the Wall Street Journal, “research-and-development tax credits coveted by high-tech companies and drug makers.” Other tax windfalls reported in the press include incentives to Hollywood to make films in the US.

There are no doubt many more handouts to corporate interests buried in the 451-page bill. It should be recalled that when Treasury Secretary Henry Paulson first presented his three-page bailout proposal to congressional leaders two weeks ago, and some Democrats called for the addition of measures to help distressed homeowners, he and President Bush put their foot down, demanding a “clean” bill with no “irrelevant” or “controversial” add-ons. The Democratic leaders of the House and Senate banking committees quickly responded with promises not to “Christmas tree” the bill.

Now, at the bidding of big business, the Democrats have loaded the bill with ornaments, all of them directed to powerful financial interests.

By contrast, not a single concession has been made in the revised bill to accommodate the massive popular opposition to the bailout. Proposals advanced by Democratic opponents of the House bill to impose some penalties on Wall Street speculators and provide a measure of relief for distressed homeowners have simply been ignored.

As in the House, the drive to push through the Senate bill was spearheaded by the Democratic leadership, working in close collaboration with the Bush administration and Paulson, the former Goldman Sachs CEO who authored the scheme to use at least $700 billion in taxpayer money to buy worthless securities from the banks.

The Democratic Party leadership has thus responded to the defeat of the original House bill—in large part at the hands of congressmen who feared being tossed out of office in November by constituents furious over a bailout of the richest people in the country—by refashioning the measure in advance of Friday’s revote in the House to provide an even bigger windfall for the American financial elite.

How is this to be explained?

It cannot be accounted for on the basis of the numerical division of the House between the two parties. The Democrats have a clear majority, 235 to 200. The bailout bill was defeated Monday by a vote of 228 to 205. The party leadership could seek to obtain the additional 13 votes it needs by winning over some of the 95 Democrats who opposed the bill, many on the grounds that it was too blatant a handout to Wall Street and lacked any provisions to address the crisis facing ordinary working people.

But the Democratic leadership never considered such a move. Rather, its response to the defeat of the initial bill was consistent with the position it has adopted unwaveringly since Paulson first broached his scheme to bail out Wall Street. That is, unqualified support for the basic framework of the Paulson plan, with a few cosmetic gestures toward “transparency” and “oversight,” supposed restrictions on executive pay that can easily by circumvented, and token provisions for homeowner relief, which were subsequently dropped at the insistence of Paulson and Bush.

Why the utter indifference to the plight of the American people—6 million of whom are expected to default on their mortgage payments this year and next—and complete subservience to a few thousand multi-millionaires and billionaires on Wall Street?

There is really no mystery here. The Democratic leadership—from its presidential and vice presidential candidates Barack Obama and Joseph Biden, to House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid, House Financial Services Chairman Barney Frank, Senate Banking Committee Chairman Christopher Dodd, Hillary and Bill Clinton and on down—has deliberately worked to pass legislation whose sole purpose is to protect the interests of the most powerful sections of the American financial elite.

They have even agreed to an unconstitutional provision that will make it virtually impossible to challenge the bailout program, its overseers and the participating banks in court—a measure that amounts to a blank check for self-dealing and corruption.

They are well aware that the bailout will do nothing to resolve the economic crisis that is deepening by the day and threatening the working class, both in the United States and around the world, with a social catastrophe. But that is not the real purpose of the plan.

Besides covering a portion of Wall Street’s bad debts, the bailout serves a broader strategy of utilizing the financial crisis as a means of increasing the economic and political power of the most dominant banks and financial institutions. A process is well underway by which economic power in the US will be concentrated in the hands of a few banking behemoths, enabling them to set interest rates and fees and exercise dictatorial control over the economy.

All of these measures are things the leadership of the Democratic Party wants to see enacted. They have formed a united front with Wall Street’s representative Paulson and Bush because they and the party they lead are, as the World Socialist Web Site pointed out on October 1, “deeply embedded in the milieu of Wall Street and consider their most critical constituency to be the financial aristocracy and the richest layers of the upper middle class.”

To cite some illustrative facts: Rahm Emanuel, the chairman of the House Democratic Caucus and one of the leaders of the drive to pass the bailout plan, leads all congressmen in the amount of cash received from banking and securities firms. According to the web site, over the past five years he has taken in $1,636,000 from these sources. Barney Frank, who has led the bailout effort for the Democrats, ranks fourth, with a take of $1,033,000.

The Democratic Party is a party of the American financial oligarchy. For four decades it has moved ever further to the right, aligning itself more closely with Wall Street while repudiating any program of social reform. Its trajectory has reflected the evolution of sections of the middle class that long constituted a core constituency. These layers enriched themselves, benefiting from booming stock prices based on financial speculation and parasitism.

The Democrats have sought to obscure their class position and right-wing orientation by adopting liberal positions on so-called “social issues”—abortion, gay rights, affirmative action—all of which are defined within the framework of identity politics. Barack Obama, whose posture of “change” and “new politics” is based entirely on his identity, and whose policies of militarism and defense of corporate interests are virtually indistinguishable from those of his Republican opponent, embodies the duplicitous and reactionary nature of the Democratic Party.

Amy Goodman on the Threat to Public Dissent

Invasion of the Sea-Smurfs

The New American Century: Cut Short By 92 Years

The New American Century: Cut Short By 92 Years

By Mike Whitney

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America's time as a superpower is coming to an end. The financial crisis was just the last straw. Whatever good faith was left after the invasion of Iraq, the shrugging off of international treaties and the shameless disregard for human rights, is now gone. The United States has polluted the global economic system with worthless mortgage-backed securities and, by doing so, has pushed 6 billion people closer to a long and painful recession. That's not something that can be easily forgiven.

The anger at the US seems to be surfacing everywhere at once. It was particularly noticable at the recent opening of the UN General Assembly. Typically, this is a tedious event full of empty political blabbering and pretentious ceremonies. But not this time. With the world sliding towards a US-created recession; patience have worn thin, and foreign leaders have started to lashing out at the United States more vehemently. The speeches have been blunt and acrimonious; no one is "pulling their punches" any more. Venezuela's Hugo Chavez summed up the mood of the meetings like this:

"I think that, sooner rather than later, this empire will fall - to the benefit of the whole world, enabling a balance in the world to be created: polycentric and multi-polar. That will guarantee peace in the world. To the creation of this multi-polar world we are making our small contribution."

Chavez likes the American people but opposes the American Empire; it's that simple. He was the first foreign leader to offer food and medical assistance to the victims of Hurricane Katrina. (Bush refused his offer) Also, he regularly supplies tons of heating oil to low-income families in the Northeast USA.

What Chavez objects to is Bush's "unipolar" model of global governance whereby all the world's crucial decisions--on everything from global warming to nuclear proliferation--are made by Washington. No one likes being told what to do, just as no one likes the US constantly meddling in their affairs. That's why none of the UN attendees seem particularly bothered by the fact that the US financial markets are in freefall. It's called schadenfreude, taking pleasure in someone elses misfortune, and there was ample supply of it at the United Nations last week.

Many of the dignitaries seem to believe that America's sudden downturn presents opportunities for a change in the way the world is run. That's what everyone wants; change. Real change. No one wants another 8 years like the last. That's why the central theme in Chavez's speech was repeated over and over again by the other world leaders. They reject the present system and want a bigger role in shaping the world's future.

That doesn't mean that the world hates America. It just means that everyone wants a breather from the torture, the abductions, the bombing of civilians, and now, the financial contagion that the US has spread throughout the global system. The US's lack of regulation and low interest monetary policies have driven up inflation, triggered food riots, and sent oil prices skyrocketing. Enough is enough. The United States is like the dinner guest who doesn't know when it's time to go home. Perhaps, a touch of recession will help to rebalance Washington's approach and make its leaders more responsive to the needs of the rest of the world. In any event, other nations are already preparing for a world where America's role is greatly reduced.

Journalist John Gray summed it up like this in his article in The Observer, "A Shattering Moment in America's fall from Power":

"The control of events is no longer in American hands.....Having created the conditions that produced history's biggest bubble, America's political leaders appear unable to grasp the magnitude of the dangers the country now faces. Mired in their rancorous culture wars and squabbling among themselves, they seem oblivious to the fact that American global leadership is fast ebbing away. A new world is coming into being almost unnoticed, where America is only one of several great powers, facing an uncertain future it can no longer shape."

The US is about to join the family of nations and learn how to get along with its neighbors whether it wants to or not. There's simply no other choice; the dollar is falling, the deficits are soaring, and the financial markets are in a shambles. America will either learn to cooperate or become isolated in a world that is rapidly integrating. It's "get along or get out"; a message that Washington needs to learn quickly so it can adapt to a new power-paradigm.

Yes; plenty of money will still go into covert operations and CIA-sponsored dirty tricks just to keep alive the hope the Superpowerdom will be restored. That is to be expected. The well-heeled rogues in the British royal family still dream of rebuilding the Empire, too. But realists know that it's just a harmless fantasy. Nothing will come of it. Empire's have a short shelf-life and they're impossible to stitch-back together. They usually end on a corpse strewn battlefield or in a towering financial bonfire which leaves nothing behind but a pile of ashes and shards of broken glass. We can only hope that the yawning economic chasm ahead of us all, will involve less hardship than we anticipate. But when a nation sows dragon's teeth, it shouldn't expect a harvest of sweet plums.

Journalist Steve Watson reports on Infowars:

"A Council on Foreign Relations member and former policy planner under prominent Bilderberger Henry Kissinger has penned a piece in the Financial Times of London calling for a “new global monetary authority” that would have the power to monitor all national financial authorities and all large global financial companies.

“Even if the US’s massive financial rescue operation succeeds, it should be followed by something even more far-reaching – the establishment of a Global Monetary Authority to oversee markets that have become borderless." writes Jeffrey Garten also a former managing director of Lehman Brothers

The biggest global financial companies would have to register with the Global Monetary Authority (GMA) and be subject to its monitoring, or be blacklisted. That includes commercial companies and banks, but also sovereign wealth funds, gigantic hedge funds and private equity firms. The GMA’s board would have to include central bankers not just from the US, UK, the eurozone and Japan, but also China, Saudi Arabia and Brazil. It would be financed by mandatory contributions from every capable country and from insurance-type premiums from global financial companies – publicly listed, government owned, and privately held alike." (

The dream of "one world" government does not die easily, but it is dead all the same. The center of the present global financial system is the Federal Reserve. Its offspring includes the Council on Foreign Relations, the IMF, The World Bank, the G-7 banking cartel and thousands of predatory NGOs which have expanded the grip of the Washington banking cabal and the dollarized system across the planet. Neoliberalism is collapsing. What we are seeing now is the erratic spasms of a terminal heart patient entering the final stages of cardiac arrest. There is no drug or medical procedure that will restore the victim to good health.

No one is looking to the US or its "economic hit-men" to chart a course for their country's economic future. Those day's are over. The US will have to pull itself from the rubble and start over without the massive infusions of low interest capital from China, Japan and the Gulf States. The money spigots have been turned off. It's thin gruel and hard times ahead. That's the price one pays for swindling the world with worthless mortgage-backed snake oil and other "illiquid" garbage.

Russian President Vladimir Putin summed up recent events in the financial markets like this:

“Everything that is happening in the economic and financial sphere has started in the United States. This is a real crisis that all of us are facing, and what is really sad is that we see an inability to take appropriate decisions. This is no longer irresponsibility on the part of some individuals, but irresponsibility of the whole system, which as you know had pretensions to (global) leadership.”

Back at the United Nations, Germany's Finance Minister Peer Steinbuck echoed similar sentiments when he said:

“The United States is solely to be blamed for the financial crisis. They are the cause for the crisis and it is not Europe and it is not the Federal Republic of Germany. The Anglo-Saxon drive for double-digit profits and massive bonuses for bankers and company executives that were responsible for the financial crisis.”

He added,"The long term consequences of the crisis are not clear. but one thing seems likely to me; the USA will lose its superpower status in the global financial system. The world financial system is becoming multipolar."

Steinbuck was merely reiterating the feelings of Chancellor Angela Merkel who used more diplomatic language in her critique:

“The current crisis shows us you can do some things on the national level, but the overwhelming majority must be agreed to on the international level. We must push for clearer regulations so that a crisis like the current one cannot be repeated.”

Merkel knows that Europe was blind-sighted by America's deregulated system which allows crooks and chiselers to rule the roost. Even now--in the middle of the biggest financial scandal in history--not one CEO or CFO from a major investment bank has been indicted or dragged off to prison. US markets are a lawless "free for all" where no one is held accountable no matter how large the crime or how many people are hurt. But, there's a price to be paid for running a crooked system and fleecing investors, and the US will pay that price. Already, the purchase of US Treasurys has slowed to a crawl. In the coming months, America's life-support system will be disconnected altogether and the oxygen tent removed. Kissinger's protege is not worried about that; but working class American's should be. There's a train wreck just ahead and many people will suffer needlessly.

This is how Spiegel Online puts it:

"The banking crisis is upending American dominance of the financial markets and world politics. The industrialized countries are sliding into recession, the era of turbo-capitalism is coming to an end and US military might is ebbing....This is no longer the muscular and arrogant United States the world knows, the superpower that sets the rules for everyone else and that considers its way of thinking and doing business to be the only road to success.

A new America is on display, a country that no longer trusts its old values and its elites even less: the politicians, who failed to see the problems on the horizon, and the economic leaders, who tried to sell a fictitious world of prosperity to Americans....Also on display is the end of arrogance. The Americans are now paying the price for their pride." (Spiegel Online, "America loses its Dominant Economic Role")

President Dmitry Medvedev was not present at the opening ceremonies at the United Nations, but his views on the nascent "multipolar" world are worth considering. In a recent interview he said:

"We cannot have a single polar world. The world has to have various poles. A policentric world is the only way of ensuring security for the years ahead. So I think it is a very promising direction for our country to pursue...The world is more stable when there are a range of major, important political players. In a multipolar world, everyone influences everyone else. We will work to extend ourselves.

I do not think that the bipolar world that existed between NATO and the Warsaw Pact (The Cold War)has any future prospects. But it is clear today that the single-polar world is completely unable to manage crisis situations."

Both presidential candidates have vowed to continue the unilateralist Bush Doctrine. Obama is just as eager as McCain to violate sovereign borders, invade countries that pose no imminent national security threat to the US, and carry out the many flagrant violations of human rights and international law as long as it advances the geopolitical objectives of western mandarins. There's no doubt that the impending financial meltdown will bring our leaders back to their senses and help to restore the republic. The US needs a foreign policy that doesn't require slaughtering people in their homes or ripping off their retirement savings to maintain our standard of living.

The war that Bush has launched against the world--the war on terror--will persist for years after the US financial system collapses in a heap. The will to power is fueled by arrogance, class consciousness, and a "sense of entitlement" that is stronger than even the will to survive. This is the force that animates the destructive, suicidal impulses of the current conflict. And that is why the war will continue. The social fabric within the US will be torn to shreds long before the fighting stops. A strong sense of entitlement creates the belief that "The world is mine to do with whatever I choose; the claims of others are of no consequence". These feelings cannot be changed through logic or rational discussion; they must be eradicated with a scalpel the same way one would remove a cancerous tumor.

There's trouble ahead. The multi-polar world is about to collide head-on with the "faith-based" unipolar world and millions are bound to suffer. But there is no doubt about the final outcome. The geopolitical plates are shifting inexorably away from Washington. America's ability to wage war will steadily erode as capital and resources dry up. Its only a matter of time before the war machine sputters to a halt and the troops return home. When the killing stops, a truly new world order will begin.

Bailout Focus On House as Crisis Spreads

Bailout Focus On House as Crisis Spreads

By Eddie Evans and Ralph Boulton

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hockwaves from the global credit crisis spread on Thursday, threatening industry and jobs worldwide and putting pressure on Congress to finish up a $700 billion bailout of the U.S. financial sector.

The fate of the rescue plan, passed by the Senate 74-25 on Wednesday night, now lies with the House of Representatives, which is expected to vote on the bill on Friday.

The House rocked global markets on Monday by rejecting an earlier version of the bailout, which President George W. Bush has called the "essential to the financial security of every American."

European Central Bank President Jean-Claude Trichet said economic activity was weakening in Europe and opened the door to interest rate cuts, while in the United States data suggested a recession may be approaching.

U.S. factory orders fell 4 percent in August, on top of data on Wednesday that showed manufacturing activity in September at its weakest since the 2001 recession.

U.S. jobless claims rose last week to their highest level in seven years, ahead of September payrolls data due out on Friday.

Oil prices fell almost $3 a barrel on an expected slowdown in economic activity around the world. The dollar rose to a year high against the euro after Trichet's comments and major U.S. stock indexes fell more than 2 percent.

At the Paris Auto Show, top automakers including General Motors Corp and Ford Motor Co warned of tough times, as evaporating credit for consumers cuts demand and could force production cuts and job losses.

"The problems of subprime and credit crunch are now all over the world," Ford Chief Executive Alan Mulally said. "The downturn is longer and deeper than we foresaw a year ago," he said.

In a week marred by bank rescues across Europe, French President Nicolas Sarkozy's office said he would host the leaders of Britain, Italy, Germany and the ECB on Saturday to discuss a response to the credit crisis. Sarkozy denied reports a 300 billion euro ($415 billion) plan akin to the U.S. bailout was under consideration.

Market participants remained cautious about the U.S. bailout bill's prospects in the House.

"I'm not betting anything here because I don't know what the House is going to do," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. "If this bill doesn't pass in the House, it's game over."

Even if the bill is passed, worries remain over the global economic outlook, said Masamichi Adachi, senior economist at JPMorgan in Tokyo. "It's a completely different world now. All the things U.S. authorities are doing now are simply aimed at preventing a global meltdown."


The bailout plan, equivalent to some $2,300 per American, is intended to reinvigorate credit markets and interbank lending that has frozen up while overleveraged financial institutions staggered under the weight of failed mortgages.

It has stirred fierce criticism from those who see it as help for a Wall Street guilty of taking reckless risks in pursuit of short-term profit.

Under the deal, the Treasury would take on illiquid assets held by banks, in the hope of restoring confidence and unfreezing credit markets vital to the wider economy.

Interbank lending rates remained high, a sign that banks were not lending to each other, despite the Senate vote and large injections of cash by central banks.

The Fed said the U.S. commercial paper market contracted for the third straight week, as business lending and borrowing effectively shut down.

President Bush, his authority eroded by the approaching end of his term in office, welcomed Senate passage of the package on Wednesday and urged the House to do the same, quickly.

"With the improvements the Senate has made, I believe members of both parties in the House can support this legislation," Bush said in a written statement.

Senate leaders hope that sweetening the plan with a tax cut and extended federal protection for bank deposits can turn "no" voters in the House into supporters. On Monday, the House rejected the previous version of the plan by a 228-205 vote.

"It's still uncertain. I think it is likelier to pass than before," House Financial Services Committee Chairman Barney Frank said in an interview on CNN.

"The main change is reality. I think that it's not possible now to scoff at the predictions of doom if we don't do anything," the Massachusetts Democrat added.

Many Americans resent the idea that Wall Street is being "bailed out" at taxpayer expense, and have made their views clear in e-mails and calls to Washington, putting pressure in particular on vulnerable members of the House.

The crisis has become the biggest issue in forthcoming U.S. elections. Both presidential candidates, Republican Sen. John McCain and Democratic Sen. Barack Obama, voted for the package. Obama, echoing Republican Bush's warnings, said the bailout was vital to "prevent a crisis turning into a catastrophe."

All 435 House seats will be contested in the election on November 4. Thirty-five seats are up for grabs in the Senate.

But Britain's Nationwide building society said house prices in August tumbled 12.4 percent from a year earlier, their biggest annual drop since records began in 1991, as higher interbank lending rates fed into a sharp increase in mortgage rates.

Treasury Secretary Henry Paulson, whose original three-page proposal grew to hundreds of pages when Congress got involved, urged the House to act swiftly to ratify it.

Should the House approve the bill, it would go to Bush to be signed into law.

"This sends a positive signal that we stand ready to protect the U.S. economy by making sure that Americans have access to the credit that is needed to create jobs and keep businesses going," Paulson said.

A report in the Wall Street Journal said U.S. Federal Reserve officials are weighing cutting interest rates, even if Congress approves the bailout.

The tally for all the various rescue measures launched by U.S. authorities this year runs to about $1.8 trillion -- more than the total economic output of both Canada and Spain last year.

France calls financial crisis summit

France calls financial crisis summit

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France will host a European summit on Saturday to discuss the international financial crisis.

UK prime minister Gordon Brown and the leaders of Germany and Italy are among those attending, President Nicolas Sarkozy’s office said.

Others are a top European financial official; European Central Bank chief Jean-Claude Trichet; and the president of the European Commission, Jose Manuel Barroso.

The aim is to prepare the EU members of the Group of Eight for broader talks on the financial crisis with the club of leading industrialised nations, the statement said.

No meeting of the full G-8 has been announced.

Mr Sarkozy has pushed for a global summit on the crisis, saying capitalism must be restructured to better adapt to a new era.

The official announcement of the summit came as France poured cold water on reports it backed the creation of a special £210bn (€267bn) fund to rescue any crisis-hit European banks.

The idea was floated by French Finance Minister Christine Lagarde. She suggested the creation of an emergency EU fund that would be available if a bank were on the brink of going under. It was swiftly rejected by Germany.

Today top French presidential adviser Henri Guaino took a further step backward, denying that France has studied the creation of any special fund.

“There is no rescue plan under study by France that foresees creation of a European fund of €300bn,” he said. “Such a fund would be extremely difficult to quickly put together, very difficult to govern on the European level.”

However, it remained unclear whether he disputed the price or the very idea for a fund.

Will the Pentagon Be the Next U.S. Institution to Crash?

Will the Pentagon Be the Next U.S. Institution to Crash?

House passes $700B Wall Street bailout

House passes $700B Wall Street bailout


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After a week of tumult, an unprecedented $700 billion government bailout of the financial industry passed the U.S. House of Representatives on Friday.

With the election-year economy showing fresh signs of weakness on several fronts, the measure advanced past a key hurdle on a 263-171 vote.

An Associated Press tally showed 29 lawmakers who sent an earlier bailout bill to unexpected defeat on Monday had changed their minds and would vote in favor of the revised legislation, far more than the dozen needed. Officials said changes made to the measure had sparked a far smaller number of defections among previous supporters.

"I'm optimistic about today. We're not going to take anything for granted but it's time to act," said House Republican Leader John Boehner of Ohio.

"I think it will pass," agreed Rep. Jim Clyburn, the chief Democratic vote-counter, as debate unfolded in the House chamber.

On Wall Street, stocks surged ahead of the vote as the Dow Jones industrial average rose nearly 150 points.

The Senate passed the measure earlier in the week on a bipartisan vote of 74-25, and Bush has repeatedly urged Congress to send the bailout to him swiftly to prevent even further economic deterioration.

"No matter what we do or what we pass, there are still tough times out there. People are mad -- I'm mad," said Republican Rep. J. Gresham Barrett of South Carolina, who opposed the measure the first time it came to a vote. Now, he said, "We have to act. We have to act now."

Rep. John Lewis, D-Ga., another convert, said, "I have decided that the cost of doing nothing is greater than the cost of doing something."

Critics were unrelenting.

"How can we have capitalism on the way up and socialism on the way down," said Rep. Jeb Hensarling of Texas, a leader among conservative Republicans who oppose the central thrust of the legislation -- an unprecedented federal intervention into the private capital markets.

It was little more than two weeks ago that Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke concluded that the economy was in such danger that a massive government intervention in the private markets was essential.

The core of the plan remains little changed from its inception -- the Treasury Department would have $700 billion at its disposal to purchase bad mortgage-related securities that are weighing down the balance sheets of institutions that hold them. The flow of credit has slowed, in some cases drying up, threatening the ability of businesses to conduct routine operations or expand.

At the same time, lawmakers have dramatically changed the measure, insisting on greater congressional supervision over the $700 billion, taking measures to protect taxpayers, and insisting on steps to crack down on so-called "golden parachutes" that go to corporate executives whose companies fail.

Earlier in the week, the legislation was altered to expand the federal insurance program for individual bank deposits, and the Securities and Exchange Commission took steps to ease the impact of the questionable mortgage-backed securities on financial institutions.

In the moments before the vote, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, pledged "serious surgery" next year to address the underlying causes of the crisis.

If anything, the economic news added to the sense of urgency.

The Labor Department said initial claims for jobless benefits had increased last week to the highest level since the gloomy days after the 2001 terror attacks. Employers slashed 159,000 jobs from their payrolls, the most in five years. That came on top of Thursday's Commerce Department report that factory orders in August plunged by 4 percent.

Typifying arguments the problem no longer is just a Wall Street issue but also one for Main Street, lawmakers from California and Florida said their state governments were beginning to experience trouble borrowing funds for their own operations.

One month before election day, the drama unfolded in an intensely political atmosphere.

Democratic presidential candidate Barack Obama, a supporter of the bill, made calls to members of the Congressional Black Caucus, who publicly credited him with changing their minds.

Rep. Elijah Cummings and Donna Edwards, both Maryland Democrats, were among them. They said Obama had pledged if he wins the White House that he would help homeowners facing foreclosure on their mortgages. He also pledged to support changes in the bankruptcy law to make it less burdensome on consumers.

"It's not too often you get the future president telling you that his priority matches your priority," said Cummings.

Obama's rival, Sen. John McCain, who announced a brief suspension in his campaign more than a week ago to try and help solve the financial crisis, made calls to Republicans. His impact was not immediately clear.

Republican Rep. Sue Myrick of North Carolina, who said she was switching her vote to favor the measure, said of McCain: "They told me he was going to call me. He didn't."

Looking ahead to election day, she added, "I may lose this race over this vote, but that's OK with me. This is the right vote for the country."

The White House issued the latest in a series of grim warnings of the risks of defeat. "If the financial markets fail to function, American families will face great difficulty in getting loans to purchase a home, buy a family car or finance a child's education," it said in a written statement.

The vote on Monday staggered the congressional leadership and contributed to the largest one-day stock market drop in history, 778 points as measured by the Dow Jones Industrial Average.

Across the Capitol, Senate leaders reacted quickly, deciding to sweeten the bill with a series of popular tax breaks as well as spending on rural schools and disaster aid. They also grafted on a bill to expand mental health coverage under private insurance plans.

At the same time, the change in federal deposit insurance and the action by the SEC on an obscure accounting rule helped produce a steady trickle of converts.

Republicans Challenge 6,000 Voter Registrations in Montana

Republicans Challenge 6,000 Voter Registrations in Montana

By Steven Rosenfeld

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The Montana Republican Party has challenged the voter registrations of 6,000 people in the state’s Democratic strongholds, such as the university towns like Missoula and rural counties with Native American reservations, according to voting rights advocates.

More than half of the challenged registrations were in Missoula, where the University of Montana is located, and where the 3,400 targeted voters is equal to 5 percent of the county’s voters, said Matt Singer, CEO of Forward Montana, a progressive voter advocacy organization. The other registrations were challenged in Butte-Silver Bow, Lewis and Clark, Deerlodge, Glacier or Hill Counties.

"My name is probably on that list," Singer said. "I moved two months ago, but I just updated my (address on my) voter registration last week."

The Republican challenges were based on the Post Office’s national change of address directory, Singer and other voting rights activists said. The Republicans used the directory to identify people who may have registered to vote while living at a previous address, such as students who moved from year to year. Registration information must contain current residences or people can be barred from voting.

"They looked through the list of new registrations and compared it to the change of address files," said Sujatha Jahagirdar, program director for the New Voters Project of the Student Public Interest Research Group. "Anybody who is listed as registered at old address was challenged."

The Montana Republican Party did not return a phone call to comment.

Missoula County attorneys have responded to the GOP voter challenges by saying that roughly 2,200 of the challenges affected people who were believed to be living in the county, Singer said. Under state law, those individuals can update their registration information when they vote.

The Republicans may go to court to challenge the 2,186 voters who live in the county, Singer said, although the party has not yet filed suit.

"The local officials say those are still registered," he said.

Montana has Election Day voter registration, but only at county offices. Thus, the individuals who live in more remote locations whose registrations were challenged would have to travel to county seats to correct their voter file -- a hurdle on Election Day.

Singer said the voter challenges also were intended to undermine the efficiency of local elections, because the county officials who have to respond to the voter challenges are now processing record numbers of new voter registrations. As a result, he said it was an open question whether absentee ballots and cards confirming voter registrations would be out mailed out late.

"All voters are being targeted," he said.

The Bailout in Plain English

The Bailout in Plain English


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Any number of cultural historians have noted the American belief that success is a sign of God’s favor. And over the past couple of decades he has had a downright love fest with the already-rich. So much so that the richest 400 Americans now have more money stashed away that the combined bottom 150 million Americans. Some $1.6 trillion bucks.

This was accomplished by selling off or shipping out ever available asset, from jobs to seaports, smashing usury and anti-monopoly laws, raiding the public coffers and manipulating the medium of exchange and blackmailing the peasantry regarding common needs such as heath care and energy to keep their asses warm … to name a few. The ultimate coup was to convince the entire nation that the well being of the rich, meaning the well being of Wall Street, was indeed the common man’s well being.

All went well for a while. People went into credit card hock up to their noses in order to provide 26% credit card interest to Wall Street, etc. And when that became untenable, flimsy mortgages were cranked out by the millions ensuring that every American who could hold a cray on could sign to purchase a home. To facilitate this all sorts of shaky ‘mortgage instruments’ were created – balloon, (sign here Jeeter, you’re gonna flip it in a year and make a hundred K on this house trailer) interest only, and finally negative balance mortgages where you only paid part of the interest and the rest was rolled back into the principal balance. And joy of joys you could refinance a couple of times while the inflated value of these houses was on the way up. Life was good for everybody. The bill was never gonna come due because, god in his wisdom, had deemed that capitalism would defy the second law of thermodynamics and expand forever. So every time a bank made a mortgage loan of say, $400,000, even though the debtor had never even made a payment yet, the loan was declared a bank asset and another $400,000 was loaned against it. Meanwhile, the Federal Reserve Bank yelled whoopee and printed another $800,000 in currency. Of course at some point the country had to run out of customers, so the loans got easier and easier. No matter that debt is not wealth. Wink and call it that and most folks won’t even look up from their new big screen high resolution digital TVs.

Problem was that all the jobs to pay for this stuff were stampeding off toward places in China with names containing a lot Xs, Zs and praying for a vowel. It was becoming clear that the entire economy was running on fumes. In fact less than fumes. It was running on the odor of paper. Mountains of the stuff. Bundles of mortgages and very strange securities and derivatives of unknown origin and value. Paper that stated its own worth and signed by some mystic hand no one could quite identify though the blurry signatures looked to read Greenspan, Paulson and Bernake.

But there was a rub. Things reached the point where there simply was not anything left to defraud the public out of, nothing left to steal from the nation’s productive capability, no matter how much paper Jeeter and Maggie signed for that trailer house, no matter how secure Brian and Jennifer out there in Arlington Virginia and Davis California thought they were. So the only thing left to do was steal from future generations of Americans and accept an I.O.U. which the government would happily sign on behalf of the people and enforce. By the wildest coincidence, under the Bush administration this I.O.U. happened to tally up to about $700 billion.

Seeing the oncoming train of financial disaster, the financiers just about wet their pants, and screamed “We want it all now! And if we don’t get it the “economy” will lock its brakes and crash. Remember, we control the medium of exchange. Nobody gets a paycheck if we don’t. Remember that it’s lines of credit from us that backs every working man’s and woman’s paycheck in the country. So pay the hell up”

Folks, they’ve got us all by the nuts and nipples. McCain knows that. Obama knows that. In the end, regardless of the so-called dissenters in the House and the Senate, we will pay up. It s election season and the dissent is for show. So it looks like we will get some “concession.” For example, we will get shares in these “toxic assets” that are stinking up the joint. The rich need to dump them and dump them fast. In another magnanimous concession, the Federal Deposit Insurance Corporation will ra ise the insurance on “our savings” to $250,000 (how many readers have 250 K in the bank?). But it will be redeemable in even more inflated currency amid an inflationary environment. And, in case you didn’t know, the FDIC has up to ten years to pay up on that insurance. So don’t get any ideas about running off to Mexico, to which by the way, we are a net debtor nation.

We will pay. We will pay because the European banks holding all that bad paper we wrote demand that we make good on it so even more of their banks will not fail. We will pay because the Chinese, the Japs and everyone else will cut off the loan tap with which we pay the interest (not the principal) on our exploding super nova of national debt. We will pay because God loves the rich. We will pay because we will not be offered any other choice. We will pay because George Bush worked hard for all those Ds in school and became20the first MBA president. We will pay because our media has internalized the capitalist system so thoroughly they can only talk in Wall Speak. We will pay because the only language we have to describe our world is that of our oppressors because we have been taught to think in Wall Speak. We will pay because we hitched our wagon to last stage capitalism and even though the wagon has now two wheels over the cliff and roars forward, we don’t know where the brake handle is located. And because we don’t know any better or understand any possible resistance to the system because we have been kept like worms in a jar and fed horse shit.

And as we all know, worms do not rise up in revolt.

That takes a backbone.

Photographers Document Dissent & Repression In Denver & St. Paul

Convention Protests in Denver & St. Paul

Indymedia photographers document dissent & repression

Political Dissent in the Streets of St. Paul

photos of the Republican Convention protest from indymedia (links below photos)


Information on the legal cases pending, fundraisers for defendants, etc. are available through the RNC Welcoming Committee site - and Cold Snap Legal Collective.


--from the San Francisco Bay Area Independent Media Center
& Twin Cities Indymedia

Political Dissent in the Streets of Denver
photos of the Democratic Convention protest from indymedia (links below photos)

For Those on the Soup Line, No Rescue Plans

For Those on the Soup Line, No Rescue Plans

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By the time the doors open to the soup kitchen at St. Benedict the Moor Neighborhood Center, the line is already snaking down St. Ann’s Avenue.

Old people sit on crates, children shuffle impatiently and adults avert their gaze. This happens every day of the year in Mott Haven, no matter the weather. That is because for too many years to count, hunger and want have been a constant in their lives.

The people who run this Bronx soup kitchen and an adjoining food pantry do not need economic analyses to tell them things are rough. The growing line and increased demand for food packages and hot meals — sometimes from people who thought they were middle class — is a sure-fire indicator.

And while politicians debate a $700 billion bailout for Wall Street, they have long lived with the fact that there is no emergency rescue plan for East 139th Street.

Anthony Jordan, the center’s executive director, said that while Congress tried – and failed - to push the bailout bill in a matter of days, it took about a year to get a farm bill passed that helps food pantries like his meet increased demand. On Wednesday, he is reopening his food pantry, which no longer gives people a sack like a handout, but allows them to browse and pick from shelves stocked with pasta, cereal and baby food. It’s a matter of dignity, he said.

“We want to be open every day, but my fear is with the economy the way it is, we’ll run out of food in a few days and just be open once a week,” Mr. Jordan said. “There is no bailout for us. There hasn’t been one for years. The closest thing to a bailout for us is to do more with less.”

This bleak little strip lies eight and a half miles from Wall Street. Emotionally, it is a parallel universe invisible to those titans of finance for whom fat bonuses used to mean bigger vacation homes, fancier toys and ever more exotic vacations. On St. Ann’s Avenue, a small bowl of meat balls, greens and mashed potatoes and some free condoms are about the only things to salve the sting of bad times.

While people wait for the soup kitchen to open, several community-based health groups offer advice and help under small tents lined up on the street nearby. Tables are set up stacked with free condoms and brochures, as people are encouraged to take a free H.I.V.-AIDS test on the spot. Andres Gonzalez, a volunteer with the Hispanic AIDS Forum, says he has seen little change, for the better, anyway.

“It’s all just going down, he said. “Now they’re cutting money for H.I.V. prevention, even when there is one new infection every 10 minutes. When will that stop?” Even in his own life, he feels the pressure of health care costs, too.

“Look at prescription drugs,” he said. “They always want a co-pay at the drug store. Sometimes I don’t have the money for the co-pay and the drug store won’t give me my medicines.”

Next to his table, St. Ann’s Corner of Harm Reduction, a nonprofit community health group, distributes free hypodermic needles to heroin addicts and diabetics. People line up, many of them in their 50s (or, at least, looking like it), to get a small bag with needles, alcohol swabs and condoms.

Often, people stop by and ask for referrals to detox programs, soup kitchens and food pantries. Volunteers there said referrals for food had tripled since last year alone, to 150 a day. Many of them come from local shelters, of which there is an abundance in this South Bronx neighborhood.

Carlos Flores has been coming to this street ever since he and his family had to move in to a shelter a few blocks away. He lost his apartment when he lost his truck driving job — an insurance problem left him with no driver’s license for a while, which was enough to put him on the street.

Although he has been accepted into a program that covers some of his rent as he starts to work again, he cannot find a landlord who will rent him a place. “I’m still at the shelter,” he said as he waited in line with his 18-month-old son, Sean Carter. “We’re trying. We’re looking, but it’s hard, no lie. Now they took away our food stamps when I missed a meeting with a caseworker.”

Given how threadbare their existences had long been, the idea that Congress had to ease the plight of bankers as soon as possible struck many of these people as preposterous, if not insulting.

“Why should we save a bank?” said Frances Hernandez, who was hauling an empty shopping cart. “Some people don’t have cards to go to banks.”

Edwin Avent and Eddie Fernandez stood near the head of the soup kitchen line. Mr. Avent had just finished a job training program for office help. He had yet to find a job.

“What about the poor?” Mr. Avent said.

“He got to stop spending money on that war,” Mr. Fernandez said. “If they messed up that country, it’s on them, not us.”

“It’s just heartbreaking what’s going on,” Mr. Avent said. “Don’t get me wrong — this is a great country, but we should take care of ourselves first. God bless the child who takes care of his own. Would you tend to your neighbor’s child before your own? We’re spending millions on another country and we got people here who are hungry.”

Yet, even in this place of need, there are scenes of unexpected generosity. It comes not from the government, but from others who walk the same streets with tired feet and haggard faces.

Anthony Echevarria and his wife, Tracy Rosado, stopped at one of the tables asking when the food pantry would open. Mr. Echevarria is a barrel-chested man. He used to be a construction worker until he hurt his spine. His wife just gave birth to a son, Nicholas Anthony. The five-day-old infant lay asleep in a harness on his father’s chest.

“There are people dying in this neighborhood,” Mr. Echevarria said. “They could be giving $700 billion to drug programs, food pantries or housing.”

He asked if the food pantry would open. It would not, he was told, until Wednesday. His little family of three walked away, calmly. He toted a small bag of clothes his newborn child did not need. He gave it to a woman leaving a church down the street.

On this gloriously sunny day, where the noonday light revealed every wrinkled face, grimy shirt and busted shoe, a man who received nothing managed to give a little to someone who had even less. He did not call it a bailout. He called it his duty.

“God is a good God,” he said, stroking his son’s back. “A giving God.”

Red Flag On Purging Voter Rolls

Red Flag On Purging Voter Rolls

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With Election Day rapidly approaching, a new report, obtained exclusively by CBS News chief investigative correspondent Armen Keteyian, raises serious questions and exposes flaws in the way states maintain their voter registration rolls.

States and counties regularly update their voter registration rolls for accuracy, removing people who have moved, died, or committed a felony. It is known as "voter purging."

But, the new report by the non-partisan public policy and law institute, the Brennan Center for Justice at New York University School of Law provides troubling new insight into the process. There are no national standards and as a result, the cleaning up of voter rolls is not as precise as it should be and eligible voters are often wrongly removed.

The Brennan report calls the nationwide process "chaotic," "shrouded in secrecy", "riddled with inaccuracies", "prone to error" and "vulnerable to manipulation."

"What's wrong with the process is it's happening in secret. It's happening with no accountability," Michael Waldman, the center’s executive director, told CBS News.

Read the Brennan Center report on voter purges
"Officials are making tons of errors, and voters aren't given a chance to correct the errors," he said.

Waldman also says some voters will show up on Nov. 4 who are supposed to be registered to vote and will be told they are not listed that way. If that happens, he says, “don't take 'no' for an answer. Cast a provisional ballot and call a voter hotline.”

The numbers of purges that occurred are hard to uncover and often are not known until after an election. But, the report cites several controversial purges this year so far.

For example, in Muscogee County in Georgia, the report says, a county official purged 700 people from voter lists for criminal convictions. Many of the people who received letters informing them of the purge, however, had never even received a parking ticket. In Mississippi, a local election official recently discovered that another official had wrongly purged 10,000 voters “from her home computer.”

The reasons for wrongly purging eligible voters ranges from clerical errors to mistakes in matching names, addresses and criminal histories. Waldman says there’s a “huge potential for partisan mischief" and manipulation.

Another study, by the group U.S. PIRG, released last week, also looked at the issue of voter purging and discovered that 19 states are ignoring a federal law banning systematic purges within 90 days of a federal election. The 19 states include battleground states of Colorado, Ohio and Nevada.

As a solution, the Brennan Center recommends that in the future the government implement a nationwide universal voter-registration system.

Waldman said: "when you register once, you stay registered. The government keeps the list. You can prevent fraud. You can prevent people who aren't eligible from voting. But everybody who's eligible gets to vote.”

Doing something like this could add up to 50 million more people to the voter rolls every year.

He said: "Every eligible citizen should know that on Election Day they can show up to vote, without worrying whether their name's on the list."

600,000 jobs lost - and counting Freeze in credit would only worsen unemployment as economic slowdown intensifies.

600,000 jobs lost - and counting

Freeze in credit would only worsen unemployment as economic slowdown intensifies.

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Job losses have been mounting, and the slowing economy and credit crunch is likely to take an even greater toll in the coming months.

Analysts on average forecast that the monthly employment report expected Friday will reveal that the economy shed 105,000 jobs in September - the largest monthly loss in five years. The economy already has lost 605,000 jobs this year.

Unemployment is expected to remain at a relatively high 6.1%.

What's more troubling is that hiring trends have deteriorated even further in recent weeks - and that won't be reflected in government statistics until later this year.

Failing mortgages and struggling banks have made it difficult for businesses and consumers alike to borrow money. If businesses can't borrow money, the thinking goes, they can't expand stores or hire more people.

"A complete lockup of the credit markets will reverberate throughout the economy in a very severe fashion," said Martin Regalia, chief economist at the U.S. Chamber of Commerce, a business lobby group. "If the economy weakens further, we'll see truly dramatic unemployment."

Regalia expects unemployment to reach 6.5% by the end of the first quarter next year, and 7% if nothing is done by the government to free up the capital markets. While the economy may stop shedding jobs at that point, he said those stubbornly high rates of unemployment could persist until the end of 2009.

Actual job losses are more difficult to predict. Regalia said 150,000 to 175,000 a month could be likely, significantly higher than today's levels but far below the rate of 250,000 to 300,000 lost during the last recession in 2002.

The government is still negotiating a package that would enable the purchase of distressed assets from banks in the hopes of getting them to lend again. The $700 billion bailout was rejected in the House of Representatives on Monday, and the Senate is going to vote on a revised version on Wednesday night.

"If we don't have measures to correct the situation, we will see more [job] losses," said Joyce Bastoli, a vice president at Ajilon Finance Solutions, part of the staffing company Adecco. "If companies don't have access to capital, we will see it trickle down."

The real problem: Slowing economy

Still, while there were some encouraging signs that the credit crisis is not having as devastating an impact as some fear, the slowing economy looms large.

"We're not seeing anything besides the normal tightening of credit you usually get at the end of an expansion," said Bill Dunkelberg, chief economist for the National Association of Independent Businesses.

Alan Tonelson, a research fellow at the U.S. Business and Industry Council, which represents smaller and mid-size manufacturers, said that most manufacturers are conservatively managed and have fairly low levels of debt. Tonelson is urging caution on any government bailout, saying banks should not be encouraged to resume their free-lending ways to consumers already overburdened with debt.

Even if businesses aren't yet impacted by the credit crunch, they are certainly planning for slowing sales as credit to consumers dries up. That could mean fewer orders for goods - and fewer people needed to manufacture, ship, stock and sell those goods.

"It's reasonable to expect not only job losses, but wage losses as well," said Tonelson.

Said Daniel Penrod, an industry analyst with the California Credit Union League, a trade association for credit unions: "We haven't really seen small businesses getting hurt because of access to money, but rather just because of the slowdown."

With the holiday shopping season just around the corner, the next sector ripe for a hit is retail, said John Challenger, chief executive of global outplacement firm Challenger, Gray & Christmas. A survey by Challenger released Wednesday said that the number of job cuts in September rose 7.2% to 95,094.

"Consumers are tapped, it's going to be a tough year," said Challenger. "Unemployment is going up by leaps and bounds."