Wednesday, November 5, 2008

Silence on War Crimes

Silence on War Crimes

By Andy Worthington

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Last week, Bill Kovach, former Washington Bureau Chief of the New York Times and the founding chairman of the Committee of Concerned Journalists, blasted the U.S. media for its failure to ask tough questions of both presidential candidates regarding their opinions of the Bush administration's unprecedented adherence to the controversial "unitary executive theory" of government.

The theory, which became prominent in the Reagan administration, but has peppered U.S. history, contends that, when he wishes, the president is entitled to act unilaterally, without interference from Congress or the judiciary. This is in direct contravention of the separation of powers on which the United States was founded, and critics have long contended that it is nothing less than an attempt by the executive to seize the dictatorial powers that the Constitution was designed to prevent.

Under the cover of the wartime powers granted in the wake of the 9/11 attacks, and with encouragement from lawyers including, in particular, Vice President Dick Cheney's chief of staff (and former legal counsel) David Addington, President Bush has pursued the theory relentlessly, issuing a record number of "signing statements" to laws passed by Congress, designed to prevent the nation's politicians from interfering in the executive's quest for unchecked power.

He has also approved a number of secret memos, which, in conjunction with various "signing statements," have authorized what numerous critics of the administration regard as war crimes. These include detaining prisoners seized in the "war on terror" as "illegal enemy combatants" and holding them without charge or trial, dismissing the protections of the Geneva Conventions, redefining torture and approving its use by the U.S. military and the CIA, and authorizing "extraordinary rendition" and the use of secret prisons.

As if to prove what he was saying, Bill Kovach's speech to a meeting of international journalists in Washington, D.C., went unreported in the U.S. media (and I located it only on the website of a Jamaican newspaper). And yet in many ways Kovach could have gone further, and could also have asked why the presidential candidates themselves have been silent about the current administration's crimes.

The answer, sadly, is that the executive's thirst for unfettered executive power is not a priority for voters, even when it spills out of foreign wars and offshore prisons and onto the U.S. mainland. Too many Americans, it seems, are unconcerned or unaware that the president can even hold U.S. citizens and legal residents as "enemy combatants" and can imprison them indefinitely on the U.S. mainland without charge or trial, as the cases of Jose Padilla and Ali al-Marri reveal in horrific detail.

As a result, gross abuses of power in the name of the "war on terror," and the dictatorial theory that underpins them, have largely been ignored on the campaign trail.

Over the past two years, Senator Barack Obama repeatedly declared his support for habeas corpus, a cornerstone of American law, inherited from the English, which prohibits arbitrary imprisonment and grants all prisoners the right to know why they are being held. He defended habeas corpus while resisting the Military Commissions Act of 2006, a poisonous piece of legislation, which not only stripped the Guantánamo prisoners of their habeas rights, but also reinforced the president's right to seize and detain indefinitely anyone he regarded as an "illegal enemy combatant," and attempted to grant immunity to the president and his minions for any actions that might one day be regarded as war crimes.

Senator Obama has also stated that he will "reject torture without exception," and last August delivered a speech in which, touching on all the administration's law-shredding excesses, he declared,

As President, I will close Guantánamo, reject the Military Commissions Act, and adhere to the Geneva Conventions. Our Constitution and our Uniform Code of Military Justice provide a framework for dealing with the terrorists … The separation of powers works. Our Constitution works. We will again set an example to the world that the law is not subject to the whims of stubborn rulers, and that justice is not arbitrary.

In June this year, when the Supreme Court (which had granted the Guantánamo prisoners statutory habeas corpus rights in June 2004) rejected the habeas-stripping provisions of the Military Commissions Act and its predecessor, the Detainee Treatment Act of 2005, and ruled that the prisoners' habeas corpus rights were constitutional, Senator Obama was swift to congratulate the justices, calling the ruling "an important step toward reestablishing our credibility as a nation committed to the rule of law, and rejecting a false choice between fighting terrorism and respecting habeas corpus."

Since then, however, the Obama campaign has gone silent on executive power and the administration's war crimes, and Senator Obama has only spoken out publicly on one occasion in September, in response to an assertion by Sarah Palin, at the Republican conference, that "Al-Qaeda terrorists still plot to inflict catastrophic harm on America and he's worried that someone won't read them their rights."

Senator Obama responded by telling supporters in Michigan that habeas corpus was "the foundation of Anglo-American law," which "says very simply: If the government grabs you, then you have the right to at least ask, 'Why was I grabbed?' And say, 'Maybe you've got the wrong person.'" He explained that it was an essential safeguard, "because we don't always have the right person. We may think it's Mohammed the terrorist, but it might be Mohammed the cab driver. You might think it's Barack the bomb-thrower, but it might be Barack the guy running for president." His conclusion drove the argument back to where it should have been, but it has sadly not been repeated since: "Don't mock the Constitution. Don't make fun of it. Don't suggest that it's not American to abide by what the founding fathers set up. It's worked pretty well for over 200 years."

Another reason for disappointment is that, by refusing to raise these issues, Senator Obama has allowed John McCain to comfortably maintain the Republicans' "traditional" role as protectors of national security, without having the basis of that assumption challenged, and has also failed to exploit Senator McCain's shameful hypocrisy, as he has drifted to the right to appeal to the Republican base.

Even before the campaign became all-consuming, Senator McCain (an outspoken opponent of torture, as the result of his own experiences in Vietnam) had a spotty record on the abuse of executive power — and even on the prevention of torture by U.S. forces. Although he attempted to introduce a ban on torture by all U.S. personnel in the Detainee Treatment Act, he allowed himself to be bullied by Dick Cheney into excluding the CIA from the act's provisions, and the following year he willingly endorsed the Military Commissions Act.

This year, however, Senator McCain's flight from his own convictions has accelerated alarmingly. In February, he conveniently shelved his lifelong opposition to torture by voting against a bill banning the use of torture by the CIA, and after the Supreme Court's habeas ruling in June, he declared that it was "one of the worst decisions in the history of this country," even though, in 2005, he had told NBC's Meet the Press that the problem with Guantánamo was that the prisoners continued to be held without "any adjudication of their cases."

However, the main reasons for being disappointed that the crimes of a rogue administration have barely been mentioned as the election approaches are these: firstly, that I can only wonder, in spite of Senator Obama's fine words, whether the Democrats in general, who famously ruled impeachment "off the table" when they gained a political majority two years ago, would in fact be unwilling to cede power if it was theirs to wield; and secondly (and most significantly), because it allows those responsible for the long list of egregious crimes that have soiled America's name to leave office unchallenged. Donald Rumsfeld may be long gone, and George W. Bush nothing more than a shadow, but in the office of the vice president, Dick Cheney and David Addington, the architects of this unprecedented assault on the Constitution, the Bill of Rights, the UN Convention Against Torture, the War Crimes Act and the Geneva Conventions have been allowed to maintain their dangerous delusions, nurtured through decades of support for executive overreach in the administrations of Richard Nixon, Ronald Reagan, and George H. W. Bush.

As law professor Scott Horton explained to the New Yorker's Jane Mayer for an in-depth analysis of Addington in 2006, the mission of the vice president's closest adviser "and a small group of administration lawyers who share his views" has been to "overturn two centuries of jurisprudence defining the limits of the executive branch. They've made war a matter of dictatorial power."

In conclusion, then, I can only note that it's a sad indictment of a country's state of mind when the ruling administration has been devoted to dictatorial powers and war crimes, but an election campaign comes and goes as though it had never happened.

Andy Worthington is the author of The Guantánamo Files: The Stories of the 774 Detainees in America's Illegal Prison (published by Pluto Press). Visit his website at: www.andyworthington.co.uk.

The End of International Law?

The End of International Law?

By Robert Dreyfuss

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A parallel new Bush doctrine is emerging, in the last days of the soon-to-be-ancien regime, and it needs to be strangled in its crib. Like the original Bush doctrine -- the one that Sarah Palin couldn't name, which called for preventive military action against emerging threats -- this one also casts international law aside by insisting that the United States has an inherent right to cross international borders in "hot pursuit" of anyone it doesn't like.

They're already applying it to Pakistan, and this week Syria was the target. Is Iran next?

Let's take Pakistan first. Though a nominal ally, Pakistan has been the subject of at least nineteen aerial attacks by CIA-controlled drone aircraft, killing scores of Pakistanis and some Afghans in tribal areas controlled by pro-Taliban forces. The New York Times listed, and mapped, all nineteen such attacks in a recent piece describing Predator attacks across the Afghan border, all since August. The Times notes that inside the government, the U.S.Special Operations command and other advocates are pushing for a more aggressive use of such units, including efforts to kidnap and interrogate suspected Taliban and Al Qaeda leaders. Though President Bush signed an order in July allowing U.S. commando teams to move into Pakistan itself, with or without Islamabad's permission, such raids have occurred only once, on September 3.

The U.S. raid into Syria on October 26 similarly trampled on Syria's sovereignty without so much as a fare-thee-well. Though the Pentagon initially denied that the raid involved helicopters and on-the-ground commando presence, that's exactly what happened. The attack reportedly killed Badran Turki Hishan al-Mazidih, an Iraqi facilitator who smuggled foreign fighters into Iraq through Syria. The Washington Post was ecstatic, writing in an editorial:

"If Sunday's raid, which targeted a senior al-Qaeda operative, serves only to put Mr. Assad on notice that the United States, too, is no longer prepared to respect the sovereignty of a criminal regime, it will have been worthwhile."

Is it really that easy? To say: We declare your regime criminal, and so we will attack you anytime we care to? In its news report of the attack into Syria, the Post suggests, in a report by Ann Scott Tyson and Ellen Knickmeyer, that the attack is raising cross-border hot pursuit to the level of a doctrine:

"The military's argument is that 'you can only claim sovereignty if you enforce it,' said Anthony Cordesman, a military analyst at the Center for Strategic and International Studies. 'When you are dealing with states that do not maintain their sovereignty and become a de facto sanctuary, the only way you have to deal with them is this kind of operation,' he said."

The Times broadens the possible targets from Pakistan and Syria to Iran, writing (in a page one story by Eric Schmitt and Thom Shanker):

"Administration officials declined to say whether the emerging application of self-defense could lead to strikes against camps inside Iran that have been used to train Shiite 'special groups' that have fought with the American military and Iraqi security forces."

That, of course, has been a live option, especially since the start of the surge in January, 2007, when President Bush promised to strike at Iranian supply lines in Iraq and other U.S. officials, including Vice President Cheney, pressed hard to attack sites within Iran, regardless of the consequences.

On October 24, I went to hear Mike Vickers, the assistant secretary of defense for special operations and low-intensity conflict, speaking at the Washington Institiute for Near East Policy (WINEP), a pro-Israeli thinktank in Washington. He spoke with pride about the vast and growing presence of these commando forces within the U.S. military, noting that their budget has doubled under the Bush administration and that, by the end of the decade, their will more than 60,000 U.S. forces in this shadowy effort. Here are some excerpts of Vickers' remarks:

"If you look at the operational core of our Special Operations Forces, and focus on the ground operators, there are some 15,000 or so of those -- give or take how you count them -- these range from our Army Special Forces or our Green Berets, our Rangers, our Seals, some classified units we have, and we recently added a Marine Corps Special Operations Command to this arsenal as well. In addition to adding the Marine component, each of these elements since 2006 and out to about 2012 or 2013 has been increasing their capacity as well as their capabilities, but their capacity by a third. This is the largest growth in Special Operations Force history. By the time we're done with that, there will be some things, some gaps we need to fix undoubtedly, but we will have the elements in place for what we believe is the Special Operations component of the global war on terrorism.

"Special Operations Forces, I think through this decade and into the next one, have been and will remain a decisive strategic instrument. ...

"There's been a very significant -- about a 40 or 50 percent increase in operational tempo and of course more intense in terms of the action since the 9/11 attacks. On any given day that we wake up, our Special Operations Forces are in some sixty countries around the world. But more than 80 percent or so of those right now are concentrated in the greater Middle East or the United States Central Command area of responsibility -- the bulk of those of course in Iraq and Afghanistan."

Notice what he said: operating in 60 countries.

Of course, the very invasion of Iraq was illegal in 2003, and it flouted international law. So some may say, these cross-border raids are small potatoes. But they're not. This is a big deal. If it becomes a standard part of U.S. military doctrine that any country can be declared "criminal" and thus lose its sovereignty, then there is no such thing as international law anymore.

When Defense Secretary Robert Gates was asked about this, here's what he said, as quoted in the Post article cited earlier:

"'We will do what is necessary to protect our troops,' Defense Secretary Robert M. Gates said in Senate testimony last month, when asked about the cross-border operations. Under questioning, Gates said that he was not an expert in international law but that he assumed the State Department had consulted such laws before the U.S. military was granted authority to make such strikes."

Not an expert in international law? He'll leave it to the State Department? And this is the guy that Barack Obama's advisers say ought to stay on at the Pentagon under an Obama administration?

Manufacturing activity at 26-year low

Manufacturing activity at 26-year low

Business research group says its index fell to recessionary level.

By Ben Rooney

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A key index of the nation's manufacturing activity fell to a 26-year low, sliding into recession territory, according to a purchasing managers group.

The Institute for Supply Management's (ISM) said Monday that its manufacturing index tumbled to 38.9 in October from 43.5 in September. It was the lowest reading since September 1982, when the index registered 38.8.

Economists were expecting a reading of 42, according to a survey conducted by Briefing.com.

The tipping point for the index is 50, with a reading below that indicating contraction in manufacturing activity. The index has hovered around the 50 mark since September 2007, with an average of 49.1.

A reading below 41 is considered a sign that the economy is in recession.

The October numbers are "well within recession territory," said John Silvia, chief economist at Wachovia economics group.

He said continued weakness in new orders, production and employment, "suggests recessionary conditions in the manufacturing sector for the fourth quarter."

Employment in the manufacturing sector fell for the third month in a row. ISM's employment measure registered 34.6 in October, down 7.2 points from September. It was the lowest reading for the employment component since March 1991, when it registered 33.6.

New orders for manufactured goods have been declining for nearly a year. In October, the ISM's measure of new orders fell 6.6 points to 32.2.

Factories have reported declining levels of production for the last 2 months, with a fall of 6.7 points in October to a reading of 34.1.

The part of the index that measures the prices manufacturers pay for raw materials declined 16.5 points to a reading of 37 in the month. It was the lowest point for the component since December 2001 when the prices index registered 33.2.

"Lower input prices would normally be a positive, but they're not a positive enough to get other elements to go up," Silvia said.

In a sign of growing economic weakness worldwide, the index's measure of export orders fell 11 points to a reading of 41. The decline came after 70 months of expansion.

Rising exports had been a bright spot for U.S. manufacturers as the domestic economy deteriorates. But last month's decline suggests that struggling consumers overseas are losing their appetite for U.S. exports.

The index also showed that factories and their customers are facing rising levels of inventory as orders dry up. The factoriy component rose 0.9 point to 44.3, and customer inventories grew 1.5 points to 55.

"It appears that manufacturing is experiencing significant demand destruction as a result of recent events, with members indicating challenges associated with the financial crisis, interruptions from the Gulf hurricane, and the lagging impact from higher oil prices," said Norbert Ore, chairman of the Institute for Supply Management's Manufacturing Business Survey Committee, in a statement.

Monday's report comes after the government said last week that the nation's economy shrank in the third quarter.

U.S. gross domestic product, the broadest measure of economic activity, fell at an annual rate of 0.3% in the third quarter, compared with a 2.8% growth rate in the second quarter.

Many economists say weakness in consumer spending, among other things, could result in a negative GDP reading in the fourth quarter. Two consecutive quarters of declining GDP are one of the classic, unofficial definitions of a recession.

The Fed as a central bank to the world

The Fed as a central bank to the world

Jacqueline Thorpe

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Nicolas Sarkozy may be pushing for a new financial order but Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Henry Paulson have beaten him to it.

While the French President dreams of global economic cooperation ahead of the G20 summit in Washington, the Fed is quietly becoming central bank to the world, backed by the full might of the U.S. Treasury and a teflon-coated greenback.

Last week saw a new program added to the barrage of bailouts, backstops and stimuli announced by the United States -- US$30-billion currency swap lines for Brazil, Mexico, South Korea and Singapore. This is on top of the unlimited supply of greenbacks the United States has provided to the major economies.

The United States will swap wons for greenbacks, allowing South Korean banks to fulfill local demand for U.S. dollars, which had been starved by the freeze-up in the inter-bank lending markets. Banks can then provide those greenbacks to their local customers to allow them to carry out international business.

In April, South Korea will swap its wons back, for a fee of course. David Rosenberg, chief North American economist at Merrill Lynch was quick to pick up on the irony. "The U.S. was supposedly the basket case nation with the massive deficits whose currency was destined to lose its reserve status and whose credit rating was going to get cut at some point," he said in a note last week. "It is the U.S. that is being called upon to provide unlimited swap lines with Europe one day, and funding for emerging markets the next."

Marc Chandler, chief foreign exchange strategist at Brown Brothers Harriman in New York said the emerging market swap lines mark a new step in the evolution of the response to the credit crisis.

"It underscores the U.S. leadership role and the Fed's role as defender of the system, which is increasingly broadly conceived," Mr. Chandler said. "This is something that other central banks do not seem prepared to do.

Admittedly several Asian countries are talking about pooling reserves and increasing swap lines, but the role of the U.S. and the dollar are different."

The U.S. dollar's status as the main currency of international and central bank business has barely been tarnished by the whole sorry credit crisis. The flight to the perceived safety of U.S. treasuries has been unstinting.

The swap lines give a small "stamp of approval" to each country of their good financial husbandry but also send a message to those left swinging in the wind, Mr. Chandler adds

"Being a friend of the U.S. still matters," he said. "Venezuela, Argentina, and Russia for example, are unlikely to be thought of as likely candidates for a similar swap program with the Fed. Over time, who is regarded as a friend of the U.S. may impact valuations."

From a sheer tactical perspective, Europeans have missed an opportunity to push euro a reserve currency, consumed as they are with their own problems and intent on blaming the United States for the meltdown. Of course Venezuela and Russia have the oil wealth to provide their ownbailouts and to be fair, the United States was not alone last week in swinging into action.

China, Norway, South Korea, Taiwan and Japan all cut interest rates, and Japan and Germany announced plans for fiscal stimulus. The Bank of England and the European Central Bank are expected to slash interest rates next week.

The actions, combined with a 50 basis point cut by the Fed, which brings the world's benchmark interest rate to 1%, appear to have finally brought some rationality markets, making one wonder what there will be left for the G20 to do at its summit.

Michael Gregory, senior economist at BMO Capital Markets runs down his credit crisis checklist. Provide near limitless liquidity - check. Provide capital injections to the financial sector - check.

Provide a way to get rid of soured assets and/or clarity on what they're worth - check. Give a guarantee on interbank lending - check.

The focus at the summit then will undoubtedly be on regulation and how to prevent a similar crises, a prospect that amuses Carl Weinberg, chief economist at High Frequency Economics

"So far we haven't had any doubles," he said. "This time it was the housing market and asset-backed securities. The last time it was equity investment in Asia, the time before that it was loans to Latin America and the time before that it was S&Ls [the U.S. savings and loan crisis]. Every crisis we've had is a different set of circumstances the only common element is people tend to get irrationally exuberant about investing in a commodity and when it goes they get nailed."

Many analysts are skeptical of the notion of a global regulator while Mr. Sarkozy's idea of creating a new global financial system a la Bretton Woods II - the original had a fixed exchange rate system - seems pie-in-the-sky. "The Canadian government is not willing to cede to Washington or Basel or Bombay, the right to tell its financial institutions what to do or what it's doing is wrong," said Edwin Truman, a senior fellow at the Peterson Institute for International Economics. "That does not mean one could not have an international understanding on the best way to go about financial business, supervision and regulation. That process is already under way."

The Financial Stability Forum, which brings together representatives from central banks, treasury departments and regulators around the world, was set up after the Asian crisis in 1998 to do precisely that. It has already issued some 67 recommendations on the current crisis on a host of issues from capital requirements to credit rating agencies.

Europe may push for something grander but Mr. Truman is wary. "If they think they're going to use this to gang up on the United States and get the United States to issue mea culpa after mea culpa and turn the supervision of our financial system over to a college of officials from the rest of G20 for the next five years, they have another thing coming," he said.

Until the greenback falters, the United States is firmly in the driver's seat.

No Currency Left to Buy the Big Lies

No Currency Left to Buy the Big Lies

By John Cusack

As I contemplated the real possibility of an Obama victory and listened to right wing pundits revise history still unfolding, I thought of titles for this blog:

"Neocon Logic: This Statement is Untrue"
"The Modern Free Market System is False But a New Revelation Shall Come"
" They Would Feast on Themselves: All the Money's Gone, Nowhere to Go"
I decided on:
"No Currency Left to Buy the Big Lies"

In the pre-capitalist reality, James Madison said when he put power in the hands of the business elite, he would be entrusting "enlightened statesmen and benevolent philosophers who would devote themselves to the welfare of all."

Clearly, he believed this statement in the way I guess some modern Republicans do. The only problem was that he eventually realized this didn't work and in 1792, disillusioned and worried about the democratic experiment, condemned what he called "the daring depravity of the times." He went on to denounce the business elites who, given ultimate power, "become tools and tyrants of government...they overwhelm government with their powers and combinations and are bribed by its largesse." That's how he perceived the system he had helped design. In 2008, this is an apt description of the Republican relationship to government and power.

Finally, some blue light, tectonic plate shifts, a sea change, we hear... a wave of despair carrying us to a new place. The bastards are finally meeting their grisly ends and will be discarded and abandoned as men come to power who will actually try to govern. I know we're supposed to be civil but I'm not a real believer in this method when dealing with crimes.

What does the sea change mean? How can we help people understand what is happening and help them contextualize it?

First the past: Senator McCain, Governor Palin and assorted surrogates are delusional and breathtakingly corrupt. They disgrace themselves and their country as they lie, smear, slur and write it off as political manner.

Yet the creeping truth must frighten them late at night: there is no currency left to buy the big lies.

There is no more money left to loan or borrow the big lies or to sell them. No more money left to pay off the debt, the wreckage in the wake. The orgy of excess has drained every bottle, smashed the furniture and left the cupboards bare. All that's left is derivative debts -- bets between liars and lies. Trillions of dollars. It turned capitalism into a Ponzi scheme for trading worthless paper. No real value anywhere. No matter how much money Ben Bernanke prints.

We are asked to stand over the abyss and experience our own destruction as another political game show -- just another surreal horse race. We watch millionaires and paid Republican hacks appear on television yelling "Socialist!" at Obama as if the Bolsheviks are coming to rape our daughters. These are the same people who oversaw the greatest upward redistribution of wealth in the history of this country. The same people who, through general lawlessness and a privatization frenzy, succeeded in shredding the Constitution, turning war, illegal domestic spying, security, border patrol, interrogation, and even torture into profitable industries gorging on the state.

So define the big lie: free marketers want free markets. Not so, the facts say. They are the biggest welfare freaks on the planet.

These men and keepers of the faith would lecture us with a straight face on the evil socialists/ communists/terrorists /vampires/space aliens who would dare "redistribute wealth" by amending the tax code. Two wars and the only shared sacrifice they want is more tax cuts for the rich and for the U.S. citizenry to continue shopping. As Sidney Falco said, you gotta give it to them, their gall is gorgeous.

If we stay the course, we are told, we will finally, one day, reach that shining city on a hill, the free market-based fundamentalist utopia. (Hyper link black mass) Even though all evidence points the other way, we should listen, reason, step back and watch them as they devour what's left of the government. They will feast on themselves -- the feast of carrion the Book of Revelation tells us -- but I digress, sort of. It's over. This would be a great system if there were no human beings.

Mathematical realism. Eat what you kill. The bottom line. Greed is good. Graphs and flow charts and metrics for success. All social organization is based on profit as the unifying force and engine of the common good and even social justice; worship the market, even as you corrupt it.

Our perfect system will provide for all.

And yet Wall Street cripples America and the world because it won't adhere to the same rules it says we must obey for the good of freedom. Because reality won't be a slave to their machine.

And so this is how we can rationalize privatizing war. At last look, with 630 corporations like Blackwater and Halliburton getting 40% of the $2 billion spent each week in Iraq, no one can doubt the corporatist dominance of the war machine.

Mathematically, the market crash shouldn't have happened according to their system, but human feelings make panic and panic cannot be calculated. I would bet that someday someone will discover that math adheres to a quantum reality: the participants and the observers affect the outcome. I digress again. But not really.

Instead of an international consensus based on trust and global community, the Neocons say trust no one, need no one, ask no one. Rigged, "open" markets are created at the barrel of a gun after bombing a country. We must all bow to the market.

Collapse, chaos, lawlessness. And even the market voted with its feet.

The era of market idolatry is over.

This is the end of Milton Friedman, Reaganomics and supply-side theory. This ideology has never been about free markets but a fundamentalist vision that is a cover for naked aggression and a social contract based on fear and greed. The government's job is to create optimal conditions for corporate profit, to privatize everything in sight and to sell off its own body parts. To literally devour itself.

So we have laws that allow borrowing money against derivatives -- basically a bet between two people who create nothing without collateral. They leveraged the public financial health on something you wouldn't be allowed to do in Vegas. It illustrates the corruption that has become institutionalized through deregulation and a culture of predatory greed. Alan Greenspan testified that he was shocked: business didn't regulate itself. The common good was not achieved by greed. Naomi Klein read him the definition of crony capitalism and asked if it fit the description of the Bush administration's relationship to its favorite corporations.

I suppose he was shocked about that too. His testimony was incredible and felt like it was coated in lies or at least standing deeply in their shadows. But one doesn't doubt him as a true believer, absolved of messy feelings of collective responsibility. We made him a high priest even though we saw the suffering and the cruelty of the system.

The final irony of the free-market Darwinist model is instead of the strongest and best surviving, it's really the weakest and the worst. From a moral and spiritual point of view this is hardly in doubt. See George Bush. The gospel he purports to serve tells us this but perhaps he saw Christ as a conqueror. I've always doubted men who call themselves Christians who live by the law of the jungle. The gospels, the Koran and the Torah make no bones about it: wealth is not strength; power often represents not the brightest and the best but the weakest and worst. The beast in the Book of Revelation is not a horn-rimmed devil but Rome. Empire. Any empire. Every empire.

As Bush leaves office, the real truth is this: the new economies of the world disprove everything he ever said. Apparently that doesn't matter.

Neoconservatives will lie in the weeds and gather forces, the same players in a revolving door. They want back in and if history has proved anything, worshiping the markets is not enough. We must actually kill to feed them. A horrible cross-pollination of fundamentalism, dementia and market fever has turned America into a willing enabler of corporate cannibalism. Nothing else to call it when murder is seen as a legitimate extension of economic policy. Preemptive war is not only justified but openly referred to as a market opportunity. The strong do what they can and the weak suffer what they must. As we look out at the wreckage -- world economies collapsing, nationalized banks and a complete loss of trust -- we can see the hypocrisy as all are revealed as true socialists on the way down, crying in their scotch and Ambien as they run to the state for cover.

Many, like the Financial Times, endorse Obama. But let's remember when the F.T. and the Wall Street Journal talked glowingly and starry-eyed about the "Baghdad Boom" -- as horrifying a moniker as Shock and Awe. It was not the site of a gold rush, it was the sight of massacre and armed robbery. Now these men jump like rats off a death ship but don't be fooled. Francis Fukuyama and company will just lay low, regroup and rebrand. They speak openly about such things, beaten but unbowed, with no moral connection to the fiasco they have fostered. They speak as passing spectators watching the Weather Channel, (see Frum, Crystal, Brooks and all the rest), rather than intellectual architects, defenders, and foot soldiers in an illegal war and the thirty-five year assault on the New Deal.

As we help Obama try to implement another New Deal, I asked Naomi Klein about the parallels to The Shock Doctrine as it's polar opposite. She told me:

"I have been talking about the need for a progressive shock doctrine in speeches a lot. I call it disaster populism and the key difference is democracy. The right has been using shocks to suspend and sidestep democracy, declaring states of emergency and the progressive use of shock to enlarge and deepen the democratic space to bring more people into the political process. This is why it is important to remember that the New Deal did not come only from kindly elites handing it down from on high, but also because those elites were under massive popular pressure from below. We can all use shock and crisis to move the political direction of the country, but the progressive route is a democratic one, the right is an authoritarian one, even if it takes place within an electoral democracy."

The real challenge is to erase the delusion that greed equals freedom and prosperity, let alone the hideous lie that it somehow spreads justice. Amazingly, we are asked to listen to this gibberish in political life no matter how high the bile rises.

Many believe economies must serve humanity and not the other way around. Economies must make a moral connection to the republic. Brace yourselves free marketers: the quality of economic and human transactions will have to take priority over money. Faith and hope have to manifest in the social transactions we make.

A new social contract could be coming based on a real currency my friend Kevin McCabe calls the currency of grace. It is a currency of economic fairness and institutionalizing concepts of shared responsibility; a currency based on the gold standard that every human has value and should be awarded respect and opportunity, the dignity that comes from human beings protecting each other from the values and ideals of a Darwinist world. Its spirit is in Keynesian economics, a mixed economy with regulated markets and social spending. In the new era, we must remove fundamentalist right wing economists as the high priests and kings. Their ideology will stay dead only if we remain vigilant and call things what they are. It's a battle for the idea of America and it's just beginning if Senator Obama becomes president.

We should worship God if we want to, not the markets.

R.I.P Studs Terkel.

For more on War, Inc. go to my MySpace Page, or Amazon.com.

How Israel helps eavesdrop on US citizens

How Israel helps eavesdrop on US citizens

Ali Abunimah

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After the 11 September 2001 attacks, the United States government launched a massive program to spy on millions of its own citizens. Through the top secret National Security Agency (NSA), it has pursued "access to billions of private hard-line, cell, and wireless telephone conversations; text, e-mail and instant Internet messages; Web-page histories, faxes, and computer hard drives." In his new book, The Shadow Factory: The Ultra-Secret NSA from 9/11 to the Eavesdropping on America author James Bamford casts light on this effort, including a detailed account of how spying on American citizens has been outsourced to several companies closely linked to Israel's intelligence services.

It is well-known that the two largest American telecom companies AT&T and Verizon collaborated with the US government to allow illegal eavesdropping on their customers. The known uses to which information obtained this way has been put include building the government's massive secret "watch lists," and "no-fly lists" and even, Bamford suggests, to deny Small Business Administration loans to citizens or reject their children's applications to military colleges.

What is less well-known is that AT&T and Verizon handed "the bugging of their entire networks -- carrying billions of American communications every day" to two companies founded in Israel. Verint and Narus, as they are called, are "superintrusive -- conducting mass surveillance on both international and domestic communications 24/7," and sifting traffic at "key Internet gateways" around the US.

Virtually all US voice and data communications and much from the rest of the world can be remotely accessed by these companies in Israel, which Bamford describes as "the eavesdropping capital of the world." Although there is no way to prove cooperation, Bamford writes that "the greatest potential beneficiaries of this marriage between the Israeli eavesdroppers and America's increasingly centralized telecom grid are Israel's intelligence agencies."

Israel's spy agencies have long had a revolving-door relationship with Verint and Narus and other Israeli military-security firms. The relationship is particularly close between the firms and Israel's own version of the NSA, called "Unit 8200." After the 11 September attacks, Israeli companies seeking a share of massively expanded US intelligence budgets formed similarly incestuous relationships with some in the American intelligence establishment: Ken Minihan, a former director of the NSA, served on Verint's "security committee" and the former Federal Bureau of Investigation (FBI) official responsible for liaison with the telecom industry became head of the Verint unit that sold eavesdropping equipment to the FBI and NSA.

Bamford writes that "concern over the cozy relationship between the [FBI] and Verint greatly increased following disclosure of the Bush administration's warrantless eavesdropping operations. At the same time that the tappers and the agents have grown uncomfortably close, the previous checks and balances, such as the need for a FISA warrant, have been eliminated."

FISA -- the Foreign Intelligence Surveillance Act of 1978 -- required the government to seek court warrants for wiretaps where at least one target was in the US. In 2005, it was revealed that the Bush administration had been flagrantly violating this law. Last July, Congress passed a bill legalizing this activity and giving retroactive immunity to the telecom companies that had assisted.

Although there has never been any congressional oversight of the Israeli intelligence-linked firms operating in the heart of the US security establishment, American lawmakers and officials are not always so relaxed when it comes to foreign intrusion in the "national security" sphere. In early 2006, there was a national uproar when Dubai Ports World, a global company based in the United Arab Emirates (UAE), attempted to buy the business that manages six major American seaports.

Democratic and Republican lawmakers united against the Bush administration's approval of the sale, claiming it would harm national security. Senator Barack Obama echoed many in both parties when he said at the time, "Over four years after the worst terrorist attack in our history, not only are we failing to inspect 95 percent of the cargo that arrives at US ports, but now we're allowing our port security to be outsourced to foreign governments."

A New York Times editorial justified such alarmism on grounds that "money to finance the 9/11 attacks flowed through" the UAE, although there was never an allegation that the country's government or Dubai Ports World were involved in that. The newspaper also cited claims that "Abdul Qadeer Khan, the rogue Pakistani nuclear scientist, sent equipment to Libya and Iran through Dubai," even though it also acknowledged that "port managers have little if anything to do with inspecting cargo or checking manifests" ("Reaping What You Sow," Editorial, 24 February 2006).

Unlike the UAE, however, Israel has a well-established record of compromising American national security. The most notorious case was that of convicted spy Jonathan Pollard. Although the full details of his crimes are still secret, he is thought to have passed critical information about US intelligence-gathering methods to Israel, which then traded those secrets to US adversaries. In 2005, Larry Franklin, a Defense Department analyst, pleaded guilty to spying for Israel. Most recently, Ben-Ami Kadish, a retired US army engineer, was indicted in April for allegedly passing classified documents about US nuclear weapons to Israel from 1979 to 1985. Two former officials of AIPAC, the pro-Israel lobbying group, are still awaiting trial on charges that they passed classified information between Franklin and the Israeli government.

Nor have particular Israeli firms established a record of trustworthiness that would justify such complacency. Jacob "Kobi" Alexander, the former Israeli intelligence officer who founded Verint, fled the US to Israel in 2006 just before he and other top executives of a subsidiary were indicted for fraud that allegedly cost US taxpayers and company shareholders $138 million. Alexander eventually adopted a fake identity and hid in the southern African country of Namibia where he is now fighting extradition. In only once case did US officials block an Israeli high-tech firm from taking over an American company for security concerns.

Israeli companies do not assist the US only to spy on its own citizens, of course. Another Israeli firm, Natural Speech Communication (NSC), among whose directors is former Mossad chief Shabtai Shavit, makes software that the US uses to electronically analyze and key-word search recorded conversations in "Levantine Arabic," the dialects "spoken by Israeli Arabs, Jordanians, Lebanese and Palestinians." Mexico and Australia are among other countries known to use Israeli technologies and firms to eavesdrop on their citizens.

Not surprisingly, some of Bamford's claims have been criticized by pro-Israel activists for lacking evidence. Writing about a subject shrouded in secrecy is inherently difficult. But even what is solidly known ought to make Americans demand that Israeli intelligence activities (not less than their own government's) be sharply curtailed. In his 2001 book Body of Secrets, Bamford contended that Israel's attack on the US Navy signals ship USS Liberty during the June 1967 war was deliberately intended to prevent the Americans from learning about Israeli massacres of Egyptian prisoners of war. Thirty-four sailors were killed in the attack on the ship off the Sinai coast. Despite decades of demands by USS Liberty survivors, the US has never reopened the investigation.

So far Bamford's latest revelations involving Israel have had scarcely more impact. Former Democratic Senator Bob Kerrey gave The Shadow Factory a mostly glowing review in The Washington Post. But Kerrey, who was a member of the 9/11 Commission and is president of The New School University in New York, anxiously discounts Bamford's contentions that the 11 September hijackers in any way "were motivated by anger over an Israeli bombing of Lebanese civilians in 1996" and reassures us their only motive was "radical Islamic fervor." Kerrey concludes that Bamford's "apparent negativity toward Israel is a significant distraction from the content of his book" (Bob Kerrey, "Big Brother's Big Failure," 12 October 2008).

When any material that raises legitimate questions about Israeli actions is automatically discounted by US elites, and the motives of critics immediately cast under suspicion, it is no wonder Israel gets away with so much.

Bush's Last 100 Days the Ones to Watch

Bush's Last 100 Days the Ones to Watch

By Jesse Jackson

The air crackles with anticipation. Fingers are crossed. It gets hard to breathe. Hope, for so long locked in a closet, begins pounding on the door.

And throwing caution to the wind, many already are talking about Barack Obama's first 100 days. Will he move directly to the Apollo investment agenda, providing money to refit buildings, implement the use of renewable energy and generate jobs in the drive to reduce our dependence on foreign oil? Will he put forth a comprehensive health-care plan or begin by covering all children? Will workers finally be given the right to organize once more? How will he handle mortgage relief and/or help cities burdened by poverty?

But even as our minds, against all discipline, look beyond this day to the possible victory and change, we'd better start paying attention to another 100 days -- President Bush's last months in office.

Bush and Vice President Cheney represent a failed conservative era -- and they know it. As the administration moves into its last 100 days, there seems to be a flurry of activity: regulations to forestall Obama's new era of accountability; a flood of contracts to reward friends and lock in commitments; a Wall Street bailout that is pumping money out the door.

Consider: Treasury Secretary Henry Paulson is handing out $350 billion to the banks, drawing a special circle around nine banks -- including Goldman Sachs, the firm he previously headed -- as clearly too big to fail. The money apparently has no conditions, even though the entire purpose was to get the banks to start lending once more to one another and to companies and individuals.

Now it appears that banks plan to hoard the cash, to use it to help pay for mergers with other healthy banks (not weak ones), or to pay out dividends and bonuses. And Paulson, instead of publicly rebuking them, has let it be known that mergers would be a good thing.

Instead of getting the banking system working for small businesses and people again, our money is being used to consolidate the strength of a few megabanks.

There has been a rapid increase in military outlays over the last few months. Is the Pentagon being called on to help bolster the economy -- and perhaps McCain -- in these final weeks? Or, more likely, is the Pentagon pumping out money to reward its friends and lock in spending before the new sheriff gets to town?

The Washington Post reports that the White House is "working to enact an array of federal regulations, many of which would weaken rules aimed at protecting consumers and the environment, before President Bush leaves office in January."

About 90 new rules are in the works, and at least nine are considered "economically significant" because they would impose costs or promote societal benefits that exceed $100 million annually. Many will make changes that the new administration will find it hard to reverse for years to come. More emissions from power plants; more exemptions from environmental-impact statements; permission to operate natural gas lines at higher levels of pressure -- the changes could be the last calamities visited upon us by the Bush administration.

Congress -- the old one, not the new one just elected -- comes back into special session right after the election. Representatives Henry Waxman and John Conyers would be well advised to convene special hearings to try to curb what Bush has cooked up for his last 100 days. Let's not let the new dawn that is possible be dimmed by clouds left over from an old era that has failed.

Borders Are For Sissies

Borders Are For Sissies

By Ron Jacobs

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The news reports were uncertain at first. Did a US military unit attack a village in Syria? Did they kill eight people? Decisive words from military spokespeople did not come. Western news media was given time to report the attack as a US attack and then pull back from the certainty of their words. As it turns out, the October 26th helicopter raid into Syria from Iraq by US Special Forces was an intentional attack on a village within the sovereign borders of Syria. Naturally, Pentagon spokespeople say that only militants were killed. News outlets, meanwhile, show the faces of grieving parents and siblings of the family Syrian officials insist were killed. Either way, the fact remains that Washington has proven itself to be an international outlaw once again.

In a similar raid last month, US Special Forces landed in a village in Pakistan and killed several Pakistanis. When protests over this raid reached to Islamabad, the Pentagon decided it would only use predator drones to do their killing in Pakistan for the time being. Although the reason given is that the Pentagon wants to recognize Pakistani sensitivities to foreign troops killing people uninvited on their territory, one can assume that another, perhaps greater, reason is the Pentagon knows it could very well lose a few men if they land in that area again. As everyone knows, dead GIs never play well on the US television news no matter how they are spun.

The crassness of this calculation is as old as airpower if not older. Airborne missiles and bombs are somehow considered by those who launch them to be less immoral than raids involving soldiers on the ground–raids that often incorporate the killing of civilians. This is despite the fact that ground raids rarely kill as many civilians as air strikes, be they predator drones, carpet bombing or something in between.

Despite the clear disregard for civilian life inherent in these raids whether airborne or otherwise, the aspect of these raids that is potentially the most dangerous is the blatant disregard for national borders shown by the Pentagon. This isn’t a band of terrorists that is crossing national borders to kill and destroy. It is the largest military in the world–the military of a nation that considers its borders inviolable. Yet, it seems to have little regard for those of other nations, allies or foes. Indeed, an anonymous US official was quoted in a Washington Post article on October 28, 2008 “You have to clean up the global threat that is in your back yard, and if you won’t do that, we are left with no choice but to take these matters into our hands.” By global threat, the official obviously meant a threat to the designs of Washington for the globe, not a threat against the planet itself. As most readers are well aware, Washington often confuses its security with that of the world and, by doing so, places the entire planet at even greater risk every time it acts to preserve that security.

Another aspect of this raid is the use of Iraq as a launching pad for the operation. This flies in the face of the post-Saddam Iraq “constitution” and is one of the reasons so many Iraqis oppose the Status of Forces Agreement currently being negotiated in Baghdad’s Green Zone. Raids on neighboring countries that use Iraq as a base put Iraq in an untenable position with its neighbors and ties the government of Iraq irrevocably tot he United States, even if it does not know about the raids in advance. This is one more reason all US forces must leave Iraq. As long as US troops remain in the country, they will use Iraq as a base to plan and conduct operations outside of Iraq’s borders, no matter what the Green Zone government says.

This time around, the Green Zone government initially supported the attack, although later statements seem to have reversed that support. One can be reasonably certain, however, that if the US launched a raid on Iran, the Iraqis might not be so agreeable. Given their supine position to Washington, however, their words of protest would be without any power. Washington knows this and the Green Zone government accepts it, however begrudgingly. After all, what are they going to do? Bite the hand that put them in their fancy kennel?

Speaking of supine creatures, why does Congress let the Pentagon continue these raids into countries Washington is theoretically not at war with? Why is there no protest from the Democrats who were elected on the understanding that they would begin removing US troops from Iraq almost two years ago? To be succinct, let me put it this way. One reason is because the Bush administration has successfully linked the occupations of Iraq and Afghanistan to their so-called “war on terror.” By doing so, they can do whatever they want. If one recalls, the wording of the resolution that began this deadly imperial episode states very clearly:

“That the President is authorized to use all necessary and appropriate force against those nations, organizations, or persons he determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such organizations or persons, in order to prevent any future acts of international terrorism against the United States by such nations, organizations or persons.”

The other reason is the failure of the American people to maintain a popular movement against the two occupations. Because of this failure, the occupations/wars continue and, as the aforementioned raids into Pakistani and Syrian territory make clear, there are still very few limits to their scope.

Ron Jacobs is the author of The Way The Wind Blew: A History of the Weather Underground. His most recent novel Short Order Frame Up is published by Mainstay Press. He can be reached at: rjacobs3625@charter.net .

Closing Guantanamo

Closing Guantanamo

By Stanley Kutler

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The U.S. government’s failure to close the Guantanamo Bay detention center for alleged terrorists continues to haunt and color our standing in the world. Barack Obama and John McCain both endorsed closing the facility. Even President George W. Bush has been known to utter such a heretical idea, and some of his top aides have expressed similar sentiments. In 2006, Bush said, “I’d like to close Guantanamo, but I also recognize that we’re holding some people that are darn dangerous, and that we better have a plan to deal with them in our courts.” As the old Kentucky political prescription says, watch the way he acts, not the way he talks.

Whatever he meant, Bush now clearly has reversed himself and has chosen to do nothing. Guantanamo prison will not close on his watch; there are no plans “to deal” with the detainees “in our courts.”

As to his “war on terror,” Bush concedes nothing. Some brave or disgusted soul somewhere in the bureaucratic maze has leaked the fact that the president ignored numerous options for closing the prison. On Oct. 17, 2008, the Financial Times reported that Secretary of State Condoleezza Rice and Secretary of Defense Robert Gates pushed the idea, but the Justice Department reportedly opposed moving the prisoners to American bases or prisons. You would have to be on another planet to be unaware of the not-so-subtle hands of Vice President Dick Cheney and his staff in all this. According to The New York Times, Cheney and his staff successfully argued that maintaining Guantanamo’s active status is necessary to validate the administration’s policy on terrorists.

In any event, the effect is to maintain the status quo—in this case, maintaining a facility that has earned us only international enmity.

Criticism from “Old Europe” is to be expected, but now that Tony Blair is gone, our British allies have rejected “the Guantanamo model.” Stella Rimington, the former director general of England’s domestic intelligence agency, voiced hope that the next American president would ratchet down the talk of a “war on terror,” even expressing the sacrilegious notion that there has been a huge overreaction to 9/11. One official who has prosecuted terrorism trials for several years rejected any notion of a “British Guantanamo” where defendants’ rights would be totally absent. Imagine—our British cousins maintain their faith in the Magna Carta.

The Justice Department (and Cheney) wants us to believe that the prisoners cannot be moved for fear they would require a different set of rights once on American soil. The Supreme Court ruled in Boumediene v. Bush in June 2008 that the Guantanamo prisoners had a right to habeas corpus, but the government mainly has ignored the decision, which has had no discernible impact. A number of members of Congress have opposed moving the prisoners to bases or prisons in their districts.

After the 1993 bombing of the World Trade Center, we demonstrated that our legal system could proceed properly under existing laws and constitutional practice. Four conspirators were convicted a year later, and two more followed in 1997. Ramzi Mohammed Yousef, the alleged ringleader, and the others received life sentences, with no chance for parole. The system worked. Why has there been such resistance for the Guantanamo detainees? Does the military have a vested interest in conducting military trials?

The loathsome tales of torture, abuse, sodomy and murder that emerged from the Abu Ghraib prison in 2004 resulted in convictions of low-level Army guards. Those who ordered or condoned such policies never have been charged. In the case of Guantanamo, the president, his chief Cabinet officers and their underlings, and the military, from the Joint Chiefs to the actual warders on the ground, unquestionably bear responsibility for the abuse—the physical and mental abuse of prisoners and the abuse against our constitutional system. The Bush administration and the military initiated the situation, and they willingly, even enthusiastically, provided ideas and machinery that continue to keep the prison running. Reports of Guantanamo’s conditions have circulated widely on the Internet; again, we are informed with little thanks to the “mainstream” media. Our supposedly ever-vigilant media simply have allowed the news to fade into the mists of history.

Bureaucratic drift and inertia grip the problem of resolving Guantanamo’s status. According to The New York Times, the perennial anonymous “senior administration official” (Gates or Rice?) could see little if any prospect of closing the prison. He/she said that the victorious presidential candidate would find it hard to fulfill his campaign promise to close the base. “This may not be the ideal answer, but what we are trying to do is work with the system we’ve got,” the official said. Passivity with a vengeance, it seems.

George W. Bush is apparently confident that history will vindicate him. He will be gone in three months, and he has decided to pass the buck in time-honored fashion and saddle his successor with cleaning up his mess. He will not retreat, and he obviously will not make any decisions that might correct his policies or support criticism of them. His inaction on Guantanamo is emblematic. He fiddles while the global banking system cries for vigorous governmental action and an end to free-market nonsense. He fiddles while our international prestige—not to mention our reputation—goes up in smoke.

Six Held at Guantanamo After Plot Claim Is Dropped

Six Held at Guantanamo After Plot Claim Is Dropped

Collapse of US auto sales points to deep recession

Collapse of US auto sales points to deep recession

By Jerry White
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Sales of new vehicles in the US plummeted in October as consumers—hit by growing unemployment, falling income and tighter credit—sharply reduced purchases of cars and trucks. Sales fell by a staggering 31.9 percent last month over the previous year in a further sign the US economy has entered a deep and protracted downturn, threatening the jobs of millions of working people.

Sales fell below a million for the second straight month to the lowest level since January 1991, according to Autodata Corp. At the current rate, automakers would only sell 10.56 million cars and trucks in 2008—down from 16 million in 2007—the lowest number since 1983, when the US economy struggled to emerge from the slump of the early 1980s.

Adjusted for increases in the US population, last month was the worst since World War II, GM sales analyst Michael DiGiovanni told reporters. “This is clearly a severe recession,” he said.

General Motors—which is seeking a government bailout to avert bankruptcy and expedite a merger with number-three US automaker Chrysler—suffered a 45 percent decline in sales. Chrysler sales fell by 35 percent and Ford’s fell by 30 percent. The sharp falloff also hit top-selling Japanese-based carmakers. Toyota saw a 23 percent decline despite offering zero percent financing; Honda’s sales dropped 28 percent.

Further production cutbacks and the layoff of another 10,000 autoworkers over the last two weeks contributed to another drop in overall output at US factories. The Institute for Supply Management reported its manufacturing-activity index fell to a 26-year low in October. In addition, the Commerce Department reported that factory orders fell 2.5 percent in September from August levels, much worse than the 0.7 percent drop analysts had predicted.

As a result of falling demand from steelmakers—a key supplier for all manufacturers—production at 17 of the nation’s 29 blast furnaces is being shut down. “We’re dealing with a situation that could develop into another Great Depression, if not handled properly,” Daniel DiMicco, chief executive of Charlotte, North Carolina-based steelmaker Nucor Corp., told the Wall Street Journal.

The Detroit News reported auto executives expect the market to get even weaker and are bracing for a protracted slowdown. Ford economist Emily Morris said, “If we believe that the third quarter was not the bottom for the economy, it’s likely that the third quarter will not have been the worst for industry sales either,” she said.

With workers facing increasing economic insecurity, consumer confidence fell in October to its lowest level since 1967, when the Conference Board, a New York research group, began keeping records. After years of accessible car loans, the drying up of credit has hit the automakers hard. GM’s financing arm, GMAC, is reportedly offering loans only to customers with top credit scores. In many areas of the US, only a third or so of all customers would qualify for loans, a GM spokesman said.

One or more of Detroit’s Big Three automakers are not expected to survive the crisis. Last week, rating agency Moody’s downgraded Chrysler and GM debt for the second time in three months, as well as the debt of Ford’s lending arm, citing “the pace and severity of erosion in the U.S. automotive sector” and suggesting the companies might have difficulty remaining solvent through 2009.

The decades-long collapse of the US auto industry is one of the sharpest examples of the decline of American capitalism. In the 1970s, US carmakers controlled more than 80 percent of the US market, with GM selling more than half the cars. By 2008, Asian- and European-based carmakers accounted for 51 percent of US sales.

Faced with falling market share and profits, the auto executives carried out an unrelenting attack on the jobs and living standards of workers, which continues to this day. GM, which employed 350,000 unionized workers in 1970, now has fewer than 70,000 blue-collar workers. Entire cities, such as Detroit, Flint and Dayton, Ohio, have been ravaged by plant closings and mass layoffs.

The anticipated merger between GM and Chrysler would result in the shutdown of dozens of factories and the elimination of 50,000 jobs at the two companies. Tens of thousands more would lose their jobs at auto parts suppliers and related companies. In the face of these attacks, the United Auto Workers union (UAW) has openly collaborated with the employers against its own members. (See “GM-Chrysler merger: United Auto Workers union prepares another betrayal.” )

The downturn has spread throughout the economy. On Tuesday, lumber and building material supplier Louisiana-Pacific reported wider third-quarter losses, as the slumping housing market has undercut revenue. The Nashville, Tennessee-based company has closed sawmills, reduced production at other facilities and slashed hundreds of jobs.

For the fourth quarter, the company anticipates that most of its mills will be down for more time than they will operate. Chief Executive Richard Frost said, “The declining activity in the housing market, in both new construction and repair and remodeling, caused lower demand for our products at very challenging price levels. Business fell off even harder in September and remains basically paralyzed as a result of the banking and financial market crisis.”

Computer maker Dell—which is now completing plans announced last year to cut 8,900 jobs or 10 percent of its workforce—announced Tuesday that it will outline a new series of cost-cutting measures. These will include a hiring freeze and offers of voluntary severance packages, as well as one to five days’ compulsory vacation without pay, according to a Wall Street Journal report.

It's No Joke: Fed Hires Failed Bank Executive

It's No Joke: Fed Hires Failed Bank Executive

Heckuva Job, Fed?

By JUSTIN ROOD

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The Federal Reserve Bank is drawing jeers for hiring a former top executive from the now-defunct investment bank Bear Stearns to help it gauge the health of other banks.

"How's this for sweet irony?" business publication Portfolio.com needled the pick.

Michael Alix was head of risk management for Bear Stearns for two years until the institution imploded this spring, a victim of its (risky) subprime-mortgage related investments.

Last Friday, the Federal Reserve Bank of New York quietly announced it had hired Alix to advise it on bank supervision.

"You're kidding me," said economic policy expert Dean Baker, of the Washington, D.C.-based Center for Economic Policy and Research. While he didn't know Alix personally, he said, "You would think [his record] would be a big strike against him."

The collapse of Bear Stearns led to its pennies-on-the-dollar buyout by J.P. Morgan Chase; the bank's shareholders saw their wealth plummet. To facilitate the buyout, the Fed agreed to assume potential billions in losses on bad Bear Stearns investments.

"[Alix] was the guy on the mast charged with yelling 'iceberg' just before the Titanic introducted its bow to a floating chunk of ice," wrote financial expert and blogger John Carney on the web site Clusterstock.com, where he flagged the hire.

The Fed's move "is sure to put to rest the notion that there are no second acts in American life," Carney observed drily.

A spokesman for the Federal Reserve declined to comment.

Israel launched an airstrike on Gaza

Hamas Fires Rockets at Israel After 6 Killed

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Hamas militants pounded southern Israel with a barrage of rockets Wednesday, hours after Israeli forces killed six gunmen in a fresh bout of violence that threatened to unravel a five-month-old truce that has brought relief to both Gaza and southern Israel.

The clashes began late Tuesday after the Israeli forces burst into Gaza to destroy what the army said was a tunnel being dug near the border to abduct Israeli troops.

Despite the outbreak of violence, both Israeli authorities and officials with Gaza's Hamas government said they wanted to restore the calm that has largely prevailed over the past five months.

After the Israeli incursion, Hamas gunmen battled Israeli forces and Gaza residents reported the sound of explosions, gunshots and helicopter fire. One Hamas fighter was killed, prompting a wave of mortar fire at nearby Israeli targets.

An Israeli airstrike then killed five Hamas militants preparing to fire mortar shells. Hamas responded with the barrage of rockets.

Hamas spokesman Fawzi Barhoum said the rockets were in ''response to Israel's massive breach of the truce.''

''The Israelis began this tension and they must pay an expensive price. They cannot leave us drowning in blood while they sleep soundly in their beds,'' Barhoum said.

The Israeli military said 35 rockets were fired, including one that reached the coastal city of Ashkelon, about 10 miles north of Gaza -- underscoring the militants' growing ability to strike deeper into Israel.

Police said the rocket landed in an empty area and there were no reports of injuries or property damage. However, the army said four soldiers were wounded, two moderately, in the border fighting.

The violence was the worst since Israel and Hamas agreed to an Egyptian-mediated truce in June.

In scenes not seen for months, Gaza residents crowded into hospitals, as ambulances delivered the dead and injured. Grieving militants in military fatigues fired rounds of automatic weapon fire into the air to commemorate their fallen comrades. Over Gaza City, the thudding sound of rockets being fired into Israel was audible. Unmanned Israeli aircraft, often used to target militants, buzzed in the sky overhead.

Israeli rescue services said their teams in southern Israel had been placed on high alert with ambulances on standby.

While Israel and Hamas blamed each other for the violence, neither would say the truce was over.

''We want to see the quiet in the south continued,'' said Mark Regev, Israeli government spokesman. ''This operation was in response to a Hamas intrusion of the quiet and we hope we won't see an escalation here.''

Barhoum, the Hamas spokesman, said the militant group was in touch with Egypt to try to restore calm.

Each side has a strong interest in keeping things quiet. Israel has little appetite for a return to the rocket barrages that have made life in southern border towns unbearable in recent years, while Hamas is interested in strengthening its hold on power in Gaza. Hamas violently seized control of the coastal strip in June 2007.

Israeli defense officials said they had discovered a 300-yard tunnel days ago and concluded the passage was to be used for a kidnapping. Hamas already is holding an Israeli soldier that militants captured in a cross-border raid more than two years ago.

The officials, speaking on condition of anonymity because the information was classified, said Defense Minister Ehud Barak approved Tuesday's operation. Defense officials said they knew the raid could jeopardize the cease-fire, but concluded that Gaza's Hamas rulers would have an interest in restoring the calm.

The Israeli army said a special army unit moved about 300 yards into Gaza late Tuesday to destroy the tunnel. It said the unit completed its mission and returned to Israel early Wednesday.

The army called its incursion a ''pinpoint operation'' required because the tunnel posed an immediate kidnapping threat, but signaled it had no intention of intensifying the fighting.

Israel and Palestinian militant groups reached the Egyptian-mediated cease-fire in June after months of indirect negotiations. The deal halted a deadly cycle of Palestinian rocket attacks and Israeli reprisals.

Sporadic rocket attacks on southern Israel have persisted, but the attacks were carried out by smaller militant Gaza groups seeking to embarrass Hamas for preserving a truce with the Jewish state.