Thursday, March 5, 2009

16,000 Unopened Claims Letters Hidden at VA Offices

Unopened claims letters hidden at VA offices

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A new report about Veterans Affairs Department employees squirreling away tens of thousands of unopened letters related to benefits claims is sparking fresh concerns that veterans and their survivors are being cheated out of money.

VA officials acknowledge further credibility problems based on a new report of a previously undisclosed 2007 incident in which workers at a Detroit regional office turned in 16,000 pieces of unprocessed mail and 717 documents turned up in New York in December during amnesty periods in which workers were promised no one would be penalized.

“Veterans have lost trust in VA,” Michael Walcoff, VA’s under secretary for benefits, said at a hearing Tuesday. “That loss of trust is understandable, and winning back that trust will not be easy.”

Unprocessed and unopened mail was just one problem in VA claims processing mentioned by Belinda Finn, VA’s assistant inspector general for auditing, in testimony before the House Veterans’ Affairs Committee.

Auditors also found that the dates recorded for receiving claims, which in many cases determine the effective date for benefits payments, are wrong in many cases because of intentional and unintentional errors, Finn said.

The worst case uncovered by auditors involved the New York regional office, where employees testified that managers told staff to put later dates on claims to make it appear claims were being processed faster. A review found that 56 percent of claims had incorrect dates, although no evidence was found of incorrect or delayed benefits payments. Finn said workers reported that this practice had been used for years.

The new report comes as VA is trying to resolve an earlier controversy involving documents essential to the claims process that were discovered in bins awaiting shredding at several regional offices, which raised questions about how many past claims had been delayed or denied because of intentional or unintentional destruction of documentation.

‘It is impossible not to be shocked’

Kathryn Witt of Gold Star Wives of America said survivors trying to receive VA benefits have long complained about problems getting accurate information and missing claims. “When they call to check on the status of the claim, they are often told that the VA has no record of their claim and that they should resubmit their paperwork,” she said.

In one case, a woman claimed she had to submit paperwork to VA three times to prove she was married and had three children, Witt said.

And having to resubmit the same claim, she added, does nothing to reduce the backlog that already forces survivors to wait six to nine months for simple claims to be approved.

“It is impossible not to be shocked by the numbers from Detroit,” said Rep. Harry Mitchell, D-Ariz., who chairs the House Veterans’ Affairs Committee’s oversight and investigations panel. “Shredding documents or burying them in the bottom drawer is a breach of trust. Whether that breach of trust comes as a consequence of inadequate training or negligent or deliberate behavior, Congress must not and will not tolerate it.”

It is unclear, however, whether there is any short-term fix.

A permanent solution is to have a fully electronic claims process to establish a record of when documents are received and their status as they move through the process. A fully electronic system will not be in place before 2011, VA officials said.

Kerry Baker of Disabled American Veterans said a short-term answer could be to scan all documents related to claims into computer systems. Baker, DAV’s assistant national legislative director, said this could be done at one or more large-scale imaging centers that would transform paper into electronic records.

“A large section of the veterans community and representatives of the community have long felt that the Veterans Benefits Administration operates in such a way that stalls the claims process until frustrated claimants either give up or die,” Baker said.

He said that although he doesn’t believe that is true, something must be done.

“Denying earned benefits by illegally destroying records should serve as the proverbial wake-up call that signals the urgency of this overdue transformation,” he said.

Geneva Moore, a senior veterans service representative from Winston-Salem, N.C., who testified on behalf of the American Federation of Government Employees, a union that counts about 160,000 VA workers among its members, said backdating claims and document shredding are signs of a claims system under stress.

“Clearly, if the disability claims process were already paperless, many of the problems being considered at this hearing today would no longer exist,” she said.

Truth Commission May Not Lead to Prosecutions

Truth Commission May Not Lead to Prosecutions

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The Senate Judiciary Committee held a hearing Wednesday to explore setting up a commission to investigate and report on potentially criminal policies of the Bush administration.

Critics of this approach charge that it could interfere with high-level criminal prosecutions, which are ready for immediate action by an independent or special prosecutor.

The Senate Judiciary Committee took testimony from expert witnesses on the pros and cons of organizing a special committee for the task of looking back at policies of the Bush administration, which may have led to warrantless surveillance, illegal detention and torture during the so-called "War on Terror."

"We must not be afraid to look at what we have done, to hold ourselves accountable as we do other nations who make mistakes. We must understand that national security means protecting our country by advancing our laws and values, not discarding them," Senate Judiciary Committee Chairman Patrick Leahy (D-Vermont) said, later adding, "in order to restore our moral leadership, we must acknowledge what was done in our name. We cannot turn the page until we have read the page."

Arlen Specter (R-Pennsylvania) the highest-ranking Republican on the Judiciary Committee, called the actions of the Bush administration "the greatest expansion of executive power in United States History." Spector went on to say that the actions of Bush administration lawyers who provided legal justifications for potentially unlawful Bush administration policies may amount to "criminal conduct."

Spector stopped short of endorsing the idea of a commission, instead arguing that the Department of Justice (DOJ) should be tasked with prosecuting officials who may have committed crimes.

The hearing comes on the heels of the release of legal memorandums from the Bush administration's Office of Legal Counsel (OLC), the DOJ office tasked with providing legal interpretations for the president. The documents reveal the controversial legal arguments for an expansion of presidential power in the days after September 11, 2001. In the documents, OLC lawyers argue that, in wartime, the president has almost unlimited authority to use military force on US soil, to detain US citizens, to suspend constitutional protections of privacy, free speech and press freedoms, as long as the president thinks that these actions are needed to protect the country against terrorism.

Attorney General Eric Holder, who released the memos on Monday, said he will be releasing more of these memos, but did not set a date.

The first four witnesses stressed the importance of constructing a full account of what actually happened as a result of Bush administration policies and publicly exposing the misdeeds in order to restore the reputation of the United States on the world stage. The testimony of former Ambassador Thomas Pickering, Retired Vice Adm. Lee Gunn, Former New Jersey Attorney General John Farmer Jr. and former Church committee general counsel Frederick Schwarz can be read at the hearing web site along with the testimony of the opponents of the commission, Council on Foreign Relations member David Rivkin and George Mason University law professor Jeremy Rabkin.

Rivkin and Rabkin testified that any commission set up by Congress would not be independent enough to be useful and would end up engaging in retribution instead of fact-finding. Both men struggled for talking time because only two Republican senators attended the hearing, limiting the number of questions the opponents of the commission idea were asked.

Immunity

An issue central to the formation of a commission to examine possible criminal wrongdoing is whether individuals who testify will be granted immunity. Previous examples of so-called "Truth and Reconciliation" commissions have come under criticism for allowing those who violated the law to avoid prison. Historically, these commissions have been used to document atrocities in lieu of formal prosecutions where official court cases could have been too destabilizing to a weak central government or too divisive to a society recovering from conflict.

Constitutional scholar Jonathan Turley argued against using such a commission to avoid dealing directly with crimes committed by Bush administration officials on his blog.

"We are not some new nation emerging from civil war or dictatorship. We are a nation of laws. Bush officials have already confirmed the acts of torture and we are obligated by treaty to prosecute such war crimes ... Otherwise, President Obama's repeated statements of 'no one being above the law' will appear a pretty cynical spin designed to give the appearance of actions while evading our collective international obligations."

During Wednesday's hearing, Sen. Russ Feingold (D-Wisconsin), chairman of the Senate Judiciary Subcommittee on the Constitution, argued in favor of a fact-finding commission, which would leave the door open to prosecution.

"On the question of immunity, I think we should tread carefully. There are cases that may require prosecution and I would not want a commission of inquiry to preclude that. Those who clearly violated the law should be prosecuted," Feingold said, adding, "while a commission of inquiry is the best way to get the facts out, Congress, the Justice Department, and the public should decide what to do with those facts."

Prosecutions

Michael Ratner, the president of the Center for Constitutional Rights and author of "The Trial of Donald Rumsfeld" has spent the past seven years documenting the abuse of prisoners held at the Guantanamo Bay detention center, the Abu Gharib prison in Iraq, the detention facility at Baghram Air Base in Afghanistan, and various secret CIA prisons. In his book, Ratner lays out the case for the criminal prosecution of former Secretary of Defense Donald Rumsfeld and various other military and civilian officials linked to the detention and interrogation policies of the Bush administration.

In an interview with Truthout, Ratner recommended Attorney General Holder immediately appoint an independent prosecutor, who could quickly build a case against former Vice President Dick Cheney for his role in approving waterboarding, former Secretary of Defense Donald Rumsfeld for his direct role in the documented torture of Mohammad al-Qahtani and former CIA Director George Tenent for his agency's role in what Ratner calls the "torture conspiracy."

"To stop torture in the future you need to prosecute. That's the only way to make sure that people don't do it. That's what prosecution is about: deterrence. When I see a picture of president Obama signing an executive order purportedly outlawing torture it's a great picture. But of course that could be a different president four years from now reversing that order," Ratner said.

Senator Leahy has come out against using the commission for criminal prosecutions. His stance on immunity for those who participate with the commission is not yet clear.

Bush Memos on Presidential Power Shock Legal Experts

Bush memos on presidential power shock legal experts

Administration sought unchecked wartime authority

By David G. Savage

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Legal experts said Tuesday they were taken aback by the claim in the latest batch of secret Bush-era memos that the president alone had the power to set the rules during the war on terrorism.

Yale law professor Jack Balkin called this a "theory of presidential dictatorship. They say the battlefield is everywhere. And the president can do anything he wants, so long as it involves the military and the enemy."

The criticism was not limited to liberals. "I agree with the left on this one," said Orin Kerr, a law professor at George Washington University. The approach in the memos "was simply not a plausible reading of the case law. The Bush [Office of Legal Counsel] eventually rejected [the] memos because they were wrong on the law, and they were right to do so."

Defenders of the administration stress that the memos were written during a time of national emergency. Officials feared, and indeed, expected another terrorist attack within the U.S. They were determined to take all possible steps to prevent it. And by the time the Bush administration came to an end, views within the Justice Department had changed dramatically.

Still, critics said some in the Bush administration took advantage of the moment.

"This was a period of panic, and panic creates an opportunity for patriotic politicians to abuse their power," Balkin said.

The newly released memos were mostly written between 2001 and 2003, and they gave the government broad legal authorization for fighting a new war in a new way. Their common theme was that no laws can limit the president's power in fighting terrorists.

Congress had prohibited the use of torture by U.S. agents, and it said "no citizen shall be imprisoned" in this country without legal charges. The memos said neither law could stand in the way of the president's power as commander in chief.

A March 2002 memo, for example, said holding prisoners in wartime "is an area in which the president appears to enjoy exclusive authority, as the power ... is not reserved by the Constitution in whole or in part to any other branch of government."

Duke Law School professor Walter Dellinger said the Constitution gives Congress considerable power for making wartime rules. Article I says Congress has "all legislative powers," including the power "to declare war ... and make rules concerning captures on land and water" as well as "regulation of the land and naval forces."

"You can never get over how bad these opinions were," said Dellinger, who headed the Justice Department's Office of Legal Counsel in the Clinton administration. "The assertion that Congress has no role to play with respect to the detention of prisoners was contrary to the Constitution's text, to judicial precedent and to historical practice. For people who supposedly follow the text [of the Constitution], what don't they understand about the phrase 'make rules concerning captures on land and water'?"

Most of the memos were written by John Yoo, a deputy director of the Office of Legal Counsel. This small, obscure office writes legal opinions for the attorney general and others in the government. Yoo's memos gave legal guidance to the Defense Department and the White House.

Five days before the Bush administration came to an end, Steven Bradbury, the head of the office, wrote an 11-page memo "for the files" explaining how his office had gone wrong.

Bradbury said many of the legal positions issued between 2001 and 2003 are "not consistent with the current views of OLC."

War Crimes and Double Standards

War Crimes and Double Standards

By Robert Parry

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New York Times columnist Nicholas D. Kristof – like many of his American colleagues – is applauding the International Criminal Court’s arrest order against Sudanese President Omar Hassan al-Bashir for his role in the Darfur conflict that has claimed tens of thousands of lives.

In his Thursday column, Kristof describes the plight of an eight-year-old boy named Bakit who blew off his hands picking up a grenade that Kristof suspects was left behind by Bashir’s forces operating on the Chad side of the border with Sudan.

“Bakit became, inadvertently, one more casualty of the havoc and brutality that President Bashir has unleashed in Sudan and surrounding countries,” Kristof wrote. “So let’s applaud the I.C.C.’s arrest warrant, on behalf of children like Bakit who can’t.”

By all accounts, Kristof is a well-meaning journalist who travels to dangerous parts of the world, like Darfur, to report on human rights crimes. However, he also could be a case study of what’s wrong with American journalism.

While Kristof writes movingly about atrocities that can be blamed on Third World despots like Bashir, he won’t hold U.S. officials to the same standards.

Most notably, Kristof doesn’t call for prosecuting former President George W. Bush for war crimes, despite hundreds of thousands of Iraqis who have died as a result of Bush’s illegal invasion of their country. Many Iraqi children also don’t have hands – or legs or homes or parents.

But no one in a position of power in American journalism is demanding that former President Bush join President Bashir in the dock at The Hague.

Tortured Commission

As for the unpleasant reality that Bush and his top aides authorized torture of “war on terror” detainees, Kristof suggests only a Republican-dominated commission, including people with close ties to the Bush Family and to Bush’s first national security adviser Condoleezza Rice.

“It could be co-chaired by Brent Scowcroft and John McCain, with its conclusions written by Philip Zelikow, a former aide to Condoleezza Rice who wrote the best-selling report of the 9/11 commission,” Kristof wrote in a Jan. 29 column entitled “Putting Torture Behind Us.”

“If the three most prominent members were all Republicans, no one on the Right could denounce it as a witch hunt — and its criticisms would have far more credibility,” Kristof wrote.

“Democrats might begrudge the heavy Republican presence on such a commission, but surely any panel is better than where we’re headed: which is no investigation at all. …

“My bet, based on my conversations with military and intelligence experts, is that such a commission would issue a stinging repudiation of torture that no one could lightly dismiss.”

In an earlier formulation of this plan, Kristof suggested that the truth commission be run, in part, by Bush’s first Secretary of State Colin Powell.

One of the obvious problems with Kristof’s timid proposal is that Rice and Powell were among the senior Bush officials who allegedly sat in on meetings of the Principals Committee that choreographed the abuse and torture of specific detainees.

Zelikow remained a close associate of Rice even after she replaced Powell as Secretary of State. And Scowcroft was President George H.W. Bush’s national security adviser and one of Rice’s key mentors.

It’s also not true that any investigation is always better than no investigation. I have witnessed cover-up investigations that not only failed to get anywhere near the truth but tried to discredit and destroy whistleblowers who came forward with important evidence. [For examples, see Secrecy & Privilege.]

In other words, bogus and self-interested investigations can advance bogus and self-interested history, which only emboldens corrupt officials to commit similar crimes again.

No Other Context

Kristof’s vision of having President Bush’s friends, allies and even co-conspirators handle the investigation of Bush’s crimes would be considered laughable if placed in any other context.

But Kristof’s cockeyed scheme passes almost as conventional wisdom in today’s Washington.

On Wednesday, the Washington Post assigned its satirical writer, Dana Milbank, to cover – and mock – Sen. Patrick Leahy’s Judiciary Committee hearing on his own plan for a truth commission to examine Bush-era abuses.

Milbank’s clever article opened with the knee-slapping observation: “Let’s be truthful about it. Things aren’t looking so good for the Truth Commission.”

The derisive tone of the article also came as no surprise. Milbank has made a cottage industry out of ridiculing anyone who dares think that President Bush should be held accountable for his crimes.

In 2005, when the Democrats were in the minority and the Republicans gave Rep. John Conyers only a Capitol Hill basement room for a hearing on the Downing Street Memo’s disclosures about “fixed” intelligence to justify the Iraq War, Milbank’s column dripped with sarcasm.

“In the Capitol basement yesterday, long-suffering House Democrats took a trip to the land of make-believe,” Milbank wrote. “They pretended a small conference room was the Judiciary Committee hearing room, draping white linens over folding tables to make them look like witness tables and bringing in cardboard name tags and extra flags to make the whole thing look official.”

And the insults – especially aimed at Conyers – kept on coming. The Michigan Democrat “banged a large wooden gavel and got the other lawmakers to call him ‘Mr. Chairman,’” Milbank wrote snidely. [For details, see Consortiumnews.com’s “Mocking the Downing Street Memo.”]

Then, last July, Milbank ridiculed a regular House Judiciary Committee hearing on Bush’s abuses of presidential power. The column ignored the strong case for believing that Bush had violated a number of international and domestic laws, the U.S. Constitution, and honorable American traditions, like George Washington’s prohibition against torture.

Instead, it was time to laugh at the peaceniks. Milbank opened by agreeing with a put-down from Rep. Lamar Smith, R-Texas, calling the session “an anger management class.” Milbank wrote: “House Democrats had called the session … to allow the left wing to vent its collective spleen.”

Milbank then insulted Rep. Dennis Kucinich, who had introduced impeachment resolutions against Bush, by calling the Ohio Democrat “diminutive” and noting that Kucinich’s wife is “much taller” than he is.

What Kucinich’s height had to do with an issue as serious as abuses of presidential power was never made clear. What Milbank did make clear, through his derisive tone and repeated insults, was that the Washington Establishment takes none of Bush’s crimes seriously.

So, Milbank’s mocking of Leahy’s latest initiative fits with this pattern of the past eight years – protecting Bush from the “nut cases” who think international law and war-crimes tribunals should apply to leaders of big countries as well as small ones.

The pattern of “American exceptionalism” also can be seen in Kristof cheering the application of international law against an African tyrant but suggesting that Bush’s offenses should be handled discreetly by his friends.

Journalist Murray Waas often used the saying, “all power is proximate.” I never quite understood what he meant, but my best guess was that Waas was saying that careerists – whether journalists or from other professions – might have the guts to take on someone far away or who lacked power, while ignoring or excusing similar actions by someone close by with the power to hurt them.

That seems to be especially true about Washington and its current cast of “respected” journalists. They can be very tough on President Bashir but only make excuses for President Bush.

GM auditors: 'Substantial doubt' company can stay afloat

GM auditors raise warning on survival

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Auditors for General Motors have voiced "substantial doubt" about the struggling automaker's ability to stay afloat in the company's annual report released Thursday.

The independent auditors concluded that GM's "recurring losses from operations, stockholders' deficit and inability to generate sufficient cash flow to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern," GM said in the report filed with securities regulators.

A week ago General Motors warned of a "challenging" year ahead as it posted a 30.9-billion-dollar 2008 loss, bringing the tally from four consecutive years of bleeding balance sheets to a whopping 86.6 billion dollars.

GM last month asked the US Treasury for an additional 16.6 billion dollars in emergency loans on top of the 13.4 billion dollars approved in December and said it would need another six billion from the governments of Canada, Germany, Britain, Sweden, and Thailand.

GM warned that it "could potentially be required to seek relief through a filing under the US Bankruptcy Code, either through a pre-packaged plan of reorganization or under an alternative plan, which could include liquidation" if it is not able to obtain those loans.

Other substantial risks to GM's survival include an inability to restructure its debt by June 1, a further collapse in global auto sales amid the deepening recession, the potential failure of key suppliers amid a collapse in auto sales and the success of GM's restructuring plan.

GM warned that its former parts subsidiary, Delphi," is unlikely to emerge from bankruptcy in the near-term without government support and possibly may not emerge at all."

If that were to happen, GM said it may have to acquire some of Delphi's plants in order to ensure supply of critical parts or else it may be forced to pay higher prices to another supplier.

GM also noted the fragile state of its partially-owned financial arm, GMAC, on which it is heavily dependent to finance loans for customers.

GMAC's residential mortgage unit is of particular concern, GM said, noting that the housing crisis and credit crunch has "adversely affected ResCap's business, liquidity and its capital position and has raised substantial doubt about ResCap's ability to continue as a going concern."

GM warned that its stock, which closed Wednesday at 2.20 a share, could be delisted from the New York Stock Exchange if it sinks below a dollar a share for more than 30 consecutive trading days.

It could also be deemed a "penny stock" if it remains below five dollars a share, which would increase trading costs and potentially reduce the stock's liquidity.

Conyers Cuts a Deal With Rove, Miers

Conyers Cuts a Deal With Rove, Miers

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The House Judiciary Committee cut a deal with lawyers for George W. Bush that will see his former aides Karl Rove and Harriet Miers testify in Congress' long-running investigation into the firings of nine US Attorneys in December 2006. But their testimony, at least for the time being, will not be conducted publicly.

Democrats in Congress have been seeking testimony from Miers and Rove about the Bush administration’s firing of nine US Attorneys in 2006. To stymie the investigation, Bush barred the witnesses from cooperating and asserted a broad claim of executive privilege.

Before leaving office, Bush insisted that his executive privilege extended into his post-presidency.

In a statement issued Wednesday afternoon by the panel's chairman, John Conyers, Rove and Miers will provide "transcribed depositions under penalty of perjury." It's unknown when they will testify before the Judiciary Committee.

Miers and Rove were subpoenaed by Conyers' committee last year, but refused to appear before his committee saying they were protected by Bush’s assertion of "absolute immunity." Conyers said an agreement was reached "that invocations of official privileges would be significantly limited," but his office declined to elaborate on what that would entail.

Conyers said the Judiciary Committee reserves the right to have Rove and Miers testify publicly in the future but he did not indicate if that would happen any time soon. His office did not say whether Rove would testify about the prosecution of former Alabama Gov. Don Siegelman, which Conyers demanded when he subpoenaed Rove for the third time in less than a year late last month. Siegelman has long maintained that Rove was intimately involved in the prosecution as part of a strategy to blunt Democratic southern inroads that Siegelman's governorship represented.

"I have long said that I would see this matter through to the end and am encouraged that we have finally broken through the Bush Administration's claims of absolute immunity," Conyers said. "This is a victory for the separation of powers and congressional oversight. It is also a vindication of the search for truth. I am determined to have it known whether US Attorneys in the Department of Justice were fired for political reasons, and if so, by whom."

Conyers said the Judiciary Committee has also secured an agreement from the Bush administration to secure White House documents that may contain information about the US Attorney firings.

"Under the agreement, the landmark ruling by [US District Court] Judge John Bates rejecting key Bush White House claims of executive immunity and privilege will be preserved. If the agreement is breached, the Committee can resume the litigation," Conyers' office said in a statement.

Last July, Bates ruled that the White House's legal argument of blanket executive privilege lacked legal precedent and that Miers must comply with the congressional subpoena, invoking executive privilege only on a question-by-question basis.

Bates called the White House executive-privilege position "entirely unsupported by existing case law…. In fact, there is Supreme Court authority that is all but conclusive on this question and that powerfully suggests that such advisors do not enjoy absolute immunity."

Conyers' committee has also subpoenaed Bush's former Chief of Staff Josh Bolten, who was also held in contempt last year for refusing to testify about the attorney firings and the White House's involvement in the prosecutors' dismissals. Conyers' office would not comment on where things stand regarding Bolten's testimony.

The timing of Conyers' announcement came on the same day the Department of Justice was due to file legal briefs with the US Court of Appeals for the DC Circuit stating whether the Obama administration supported Bush's broad claims of executive privilege. As of Wednesday afternoon, legal briefs were not available on the federal court systems web site. However, the agreement reached with Rove, Miers and Congress ends the lawsuit.

Obama's Justice Department attorneys told the appeals court two weeks ago that it was hoping to negotiate a settlement in the matter and avoid a lengthy court battle.

"These tripartite discussions have been complicated and time-consuming," the Justice Department said in its court motion last month. "The requested 14-day extension is appropriate to permit these negotiations an opportunity to succeed, potentially obviating the need for this Court to address the sensitive separation-of-powers questions presented in this appeal."

Two weeks ago, White House Counsel Gregory Craig said Obama has privately urged congressional lawmakers to try and negotiate a settlement over a separate dispute in which former Bush adviser Karl Rove has refused to appear before Congress and testify about the federal prosecutor dismissals.

"The President is very sympathetic to those who want to find out what happened," Craig said. "But he is also mindful as President of the United States not to do anything that would undermine or weaken the institution of the presidency. So, for that reason, he is urging both sides of this to settle."

Michael Hertz, an acting assistant attorney general in Washington, told the appeals court "the inauguration of a new President has altered the dynamics of this [Miers-Bolten] case and created new opportunities for compromise rather than litigation."

House Speaker Nancy Pelosi said the deal "is a great victory for the Constitution, the rule of law, and the separation of powers."

"I appreciate the strong leadership of Chairman John Conyers and the assistance of the Obama Administration," Pelosi said. "Congress now has the opportunity to uncover the truth and determine whether improper criteria were used by the Bush Administration to dismiss and retain US Attorneys."

Senate Judiciary Committee Chairman Patrick Leahy said the deal means the public would finally get "overdue answers to serious questions about political interference" by the Bush White House.

"It should not have taken until now to obtain testimony and documents from Bush administration officials connected to the investigation into the firings," said Leahy, who held a hearing Wednesday on creating a "truth commission" to probe Bush-era policies.

But Rep. Lamar Smith, the ranking Republican on the Judiciary Committee, said Wednesday "there is no credible evidence that Karl Rove did anything wrong, but Democrats refuse to acknowledge the facts.

"While more and more American families face the fear of unemployment, Democrats remain focused on an old grudge, prioritizing their own political vendetta over the needs of the American people," Smith said.

Last year, Rove made an end-around against Democratic leaders by having his denial of sponsoring Siegelman's prosecution inserted into the Congressional Record by the Texas Republican.

In written responses to questions from Smith, Rove denied speaking to anyone "either directly or indirectly" at the Justice Department, or to Alabama state officials about bringing corruption charges against Siegelman.

As part of the deal, Conyers said the Judiciary Committee also has the right to secure testimony from former White House attorney William Kelley if his panel's inquiry turns up evidence requiring he discuss his role in the attorney firings.

In an exclusive interview with me two years ago, John McKay, the former US Attorney for the Western District of Washington, said he believed Kelley and Miers were responsible for his firing.

According to a Justice Department watchdog investigation into the firings of the federal prosecutors, McKay's firing was due, in part, to the fact that he would not convene a federal grand jury and secure indictments of alleged voter fraud in the 2004 governor's race in the state in which Democrat Christine Gregoire defeated Republican Dino Rossi by a margin of 129 votes.

McKay told me that some Republicans in his district with close ties to the White House demanded that he launch an investigation into the election, and bring charges against individuals for voter fraud. But McKay concluded there was no evidence to support the suspicions.

McKay also said he believes he was not selected for a federal judgeship by local Republicans in Washington State last year because he did not file criminal charges against Democrats.

McKay said he requested a meeting with then-White House Counsel Miers to discuss the matter.

"I asked for a meeting with Harriet Miers, whom I had known since work I had been involved in with the American Bar Association, and she immediately agreed to see me in August of 2006," McKay told me.

McKay said that when he met with Miers and her deputy William Kelley at the White House, the first thing they asked him was, "Why would Republicans in the state of Washington be angry with you?"

That was "a clear reference to the 2004 governor's election," McKay said in characterizing Miers' and her deputy's comments. "Some believed I should convene a federal grand jury and bring innocent people before the grand jury."

The meeting with Miers and Kelley did not have a positive impact on McKay's request to be appointed a judge at US District Court. Instead, McKay said it appears that he landed on the list of US Attorneys to be fired just a few weeks after his meeting with Miers and Kelley.

David Iglesias, the former US Attorney for New Mexico, whose firing was singled out in a Justice Department watchdog report as the most "controversial" of the nine and was "engineered" by Rove, said the agreement to have Rove and Miers testify "represents true progress in this matter which has been on-going for over two years."

"However, I trust that the initial private testimony of Mr. Rove and Ms. Miers will become public at the soonest possible date."

Report: 1 in 5 Mortgages Are Underwater

Report: 1 in 5 Mortgages Are Underwater

In Nevada, more than half of all mortgage borrowers are upside down

It's bad enough when the value of your house is sinking like a lead balloon. But for a growing number of Americans, their woes are compounded by owing more on the mortgage than what that house is now worth. It's called having negative equity—the opposite of what happens when a home appreciates and a homeowner builds positive equity above and beyond his initial investment.

In a new report released Mar. 4, more than 8.3 million U.S. mortgages, or 20% of all mortgaged properties, were saddled with negative equity at the end of 2008, according to LoanPerformance, a company that tracks mortgage data. That's up two percentage points, from 7.6 million borrowers, from the end of September 2008. California led the nation with a monthly average of 43,000 new negative-equity borrowers over the three-month period, followed by Texas (16,000), Nevada (15,000), Florida (14,000), and Virginia (14,000).

"Given that we've never seen house price declines of this magnitude, this is probably one of the highest negative-equity levels we've ever seen," said Mark Fleming, chief economist for First American CoreLogic, LoanPerformance's parent. "House price declines have taken hold everywhere."

Temptation to Walk Away

The study is based on the data of some 45 million properties that carry a mortgage, which accounts for more than 85% of all U.S. mortgages. The data was filtered to include only properties valued between $70,000 and $1.25 million.

The most severe "underwater mortgages"—mortgage loans that are 125% or higher than the value of the property—are in five states: California (723,000), Florida (432,000), Nevada (170,000), Michigan (128,000), and Arizona (122,000). Underwater homes are of serious concern because for some homeowners there is little incentive not to walk away and allow the home to fall into foreclosure. Foreclosed homes drag down the prices of neighboring properties, possibly dragging more homes underwater.

A veteran real estate broker in Las Vegas who declined to be named said that in 2004 there were only 2,000 homes on the market; now there are some 20,000 and growing. "Everybody became crazy," she said. "In certain areas [home prices are] off 60% from the peak. It's really sad because there's no equity and people can't refinance."

Nevada Leads Negative Equity

The negative-equity conundrum appears poised to get worse. LoanPerformance calculates that there are another 2 million houses that are approaching the danger zone, that is, within 5% of being in a negative-equity position. Negative-equity and near-negative-equity mortgages combined account for a quarter of all homes with mortgages nationwide.

The distribution of negative equity is heavily skewed to a small number of states, according to Fleming. Nevada has the highest percentage of negative equity: More than half of all mortgage borrowers in that state are now upside down. The average loan-to-value ratio for properties with a mortgage in Nevada was 97%, or less than $8,000 in equity. That leaves the typical mortgaged homeowner with virtually no cushion for the rapidly declining home values.

In states where unemployment is high and rising, such as Michigan, the problem of upside-down mortgages is acute. "It's the combination of underwater and losing a job that is of most concern at this point," says Fleming. "If you're underwater but can still pay your mortgage, you're O.K. And if there's equity in the home and you lose a job, you can always refinance" to tap into that to make ends meet, providing a bank will approve a new loan.

Worst Is Yet to Come

Ranking the states by total number of borrowers underwater, California came in first with more than 1.9 million borrowers in negative equity, followed by Florida (1.3 million), Texas (497,000), Michigan (459,000), and Ohio (435,000). These five states account for more than half of these problem mortgages.

For states that haven't seen a widespread problem in declining prices and therefore upside-down mortgages, the worst may be in store. Fleming forecasts that the largest increases in the share of negative-equity mortgages will likely occur in states that have not yet experienced deep declines. "The worrisome issue is not just the severity of negative equity in the 'sand' states," Fleming said, "but the geographic broadening of negative equity that is expected to occur throughout the year."

As Markets Slump, U.S. Tries to Halt Cycle of Fear

As Markets Slump, U.S. Tries to Halt Cycle of Fear

Top Officials Push to Inspire Confidence in Crisis Response By Emphasizing the Long-Run

By Neil Irwin

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The Obama administration yesterday made a concerted push to boost confidence in downward-spiraling financial markets, assuring Americans that officials are taking the steps necessary to contain the worsening economic damage and to restore the nation's long-term fiscal health.

A day after the markets hit crisis lows, the administration sought to restore calm. The Treasury Department and the Federal Reserve launched a long-awaited program to pump money into consumer lending. Aides, including the White House budget director, vowed that the president's spending plan would benefit the vast majority of working Americans. And officials in various public venues used soothing language in an effort to inspire hope.

"What I'm looking at is not the day-to-day gyrations of the stock market," said President Obama, speaking to reporters at the White House, "but the long-term ability for the United States and the entire world economy to regain its footing."

The nation is caught in a dangerous cycle in which an endless stream of grim news -- waves of layoff announcements, signs that banks are teetering financially and negative economic data -- has contributed to anxiety among American consumers and businesses. That, in turn, has caused further economic weakness. The White House appears to be moving to arrest that cycle.

But words weren't enough to end the raft of bad news yesterday.

Among the items on the business news ticker: U.S. auto sales fell further in February, with General Motors sales down 53 percent from a year before. An index for pending home sales dropped more than expected in January, to a new low. And shares of General Electric fell sharply as investors worried that its credit rating could be cut.

After trading higher early in the day, the stock market ended down 0.6 percent, as measured by the Standard & Poor's 500-stock index, now at its lowest level since 1996. The index dropped 9 percent over the preceding four days.

Obama urged Americans not to obsess over the stock market, which he likened to a political tracking poll. "You know, it bobs up and down day to day," the president said. "And if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong."

He even seemed to make an unusual foray into investment advice. "What you're now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it," he said.

A key aide, meanwhile, argued that government spending could have an unusually strong impact on the economy given the current weakness. At a time when Americans are strapped, they may be more likely to spend extra dollars received as government stimulus than they would in normal times, said Christina Romer, chairman of the Council of Economic Advisers.

"I think it is possible that fiscal policy will have even more oomph in this situation," Romer said at the National Association for Business Economics conference in Arlington.

Federal Reserve Chairman Ben S. Bernanke offered a more mixed assessment of the potential impact of stimulus. Testifying before the Senate Budget Committee, he said that while the scenario outlined by Romer is possible, it is also possible that "heightened economic uncertainties and the desire to increase precautionary saving or pay down debt might reduce households' propensity to spend," which would make the stimulus less effective.

Moreover, he said, it is hard to tell how long it will take for the spending to ripple through the economy. While it should provide a boost over the next two years, he said, "the timing and the magnitude of the macroeconomic effects of the fiscal program are subject to considerable uncertainty reflecting both the state of economic knowledge and the unusual economic circumstances that we face."

Bernanke repeated his call for continued government action to bolster the financial system, which he described as crucial for a sustainable recovery to take hold.

"Historical experience strongly suggests that without a reasonable degree of financial stability, a sustainable recovery will not occur," Bernanke said.

Today, the Obama administration is expected to unveil more of its economic recovery plans, with new details of its $75 billion plan to help people at risk of foreclosure stay in their homes. Just yesterday, Citigroup announced a plan to reduce what mortgage borrowers must pay each month if they lose their jobs. Such borrowers would be eligible to make a reduced payment for three months.

Obama's aides yesterday continued to try to drum up support for his budget. The Treasury secretary, Timothy F. Geithner, and the director of the Office of Management and Budget, Peter R. Orszag, argued that the spending plan, to the tune of $3.6 trillion, would prove fiscally responsible in the long run.

"When recovery is firmly established," Geithner said, "we bring the deficits down the point where they are sustainable.

Congressional Republicans expressed deep skepticism. "When I look at this budget, I see a net tax increase of about $1.4 trillion, a tax increase that will fall especially hard on job-creating small businesses and charitable organizations," said Rep. Wally Herger (R-Calif.). "But in spite of this tax increase, this budget also manages to increase the debt held by the public by $7 trillion over the next 10 years."

A Shattering Moment In America's Fall From Power

A Shattering Moment In America's Fall From Power

The global financial crisis will see the US falter in the same way the Soviet Union did when the Berlin Wall came down. The era of American dominance is over

By John Gray

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Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.

You can see it in the way America's dominion has slipped away in its own backyard, with Venezuelan President Hugo Chávez taunting and ridiculing the superpower with impunity. Yet the setback of America's standing at the global level is even more striking. With the nationalisation of crucial parts of the financial system, the American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated. In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed.

Ever since the end of the Cold War, successive American administrations have lectured other countries on the necessity of sound finance. Indonesia, Thailand, Argentina and several African states endured severe cuts in spending and deep recessions as the price of aid from the International Monetary Fund, which enforced the American orthodoxy. China in particular was hectored relentlessly on the weakness of its banking system. But China's success has been based on its consistent contempt for Western advice and it is not Chinese banks that are currently going bust. How symbolic yesterday that Chinese astronauts take a spacewalk while the US Treasury Secretary is on his knees.

Despite incessantly urging other countries to adopt its way of doing business, America has always had one economic policy for itself and another for the rest of the world. Throughout the years in which the US was punishing countries that departed from fiscal prudence, it was borrowing on a colossal scale to finance tax cuts and fund its over-stretched military commitments. Now, with federal finances critically dependent on continuing large inflows of foreign capital, it will be the countries that spurned the American model of capitalism that will shape America's economic future.

Which version of the bail out of American financial institutions cobbled up by Treasury Secretary Hank Paulson and Federal Reserve chairman Ben Bernanke is finally adopted is less important than what the bail out means for America's position in the world. The populist rant about greedy banks that is being loudly ventilated in Congress is a distraction from the true causes of the crisis. The dire condition of America's financial markets is the result of American banks operating in a free-for-all environment that these same American legislators created. It is America's political class that, by embracing the dangerously simplistic ideology of deregulation, has responsibility for the present mess.

In present circumstances, an unprecedented expansion of government is the only means of averting a market catastrophe. The consequence, however, will be that America will be even more starkly dependent on the world's new rising powers. The federal government is racking up even larger borrowings, which its creditors may rightly fear will never be repaid. It may well be tempted to inflate these debts away in a surge of inflation that would leave foreign investors with hefty losses. In these circumstances, will the governments of countries that buy large quantities of American bonds, China, the Gulf States and Russia, for example, be ready to continue supporting the dollar's role as the world's reserve currency? Or will these countries see this as an opportunity to tilt the balance of economic power further in their favour? Either way, the control of events is no longer in American hands.

The fate of empires is very often sealed by the interaction of war and debt. That was true of the British Empire, whose finances deteriorated from the First World War onwards, and of the Soviet Union. Defeat in Afghanistan and the economic burden of trying to respond to Reagan's technically flawed but politically extremely effective Star Wars programme were vital factors in triggering the Soviet collapse. Despite its insistent exceptionalism, America is no different. The Iraq War and the credit bubble have fatally undermined America's economic primacy. The US will continue to be the world's largest economy for a while longer, but it will be the new rising powers that, once the crisis is over, buy up what remains intact in the wreckage of America's financial system.

There has been a good deal of talk in recent weeks about imminent economic armageddon. In fact, this is far from being the end of capitalism. The frantic scrambling that is going on in Washington marks the passing of only one type of capitalism - the peculiar and highly unstable variety that has existed in America over the last 20 years. This experiment in financial laissez-faire has imploded.While the impact of the collapse will be felt everywhere, the market economies that resisted American-style deregulation will best weather the storm. Britain, which has turned itself into a gigantic hedge fund, but of a kind that lacks the ability to profit from a downturn, is likely to be especially badly hit.

The irony of the post-Cold War period is that the fall of communism was followed by the rise of another utopian ideology. In American and Britain, and to a lesser extent other Western countries, a type of market fundamentalism became the guiding philosophy. The collapse of American power that is underway is the predictable upshot. Like the Soviet collapse, it will have large geopolitical repercussions. An enfeebled economy cannot support America's over-extended military commitments for much longer. Retrenchment is inevitable and it is unlikely to be gradual or well planned.

Meltdowns on the scale we are seeing are not slow-motion events. They are swift and chaotic, with rapidly spreading side-effects. Consider Iraq. The success of the surge, which has been achieved by bribing the Sunnis, while acquiescing in ongoing ethnic cleansing, has produced a condition of relative peace in parts of the country. How long will this last, given that America's current level of expenditure on the war can no longer be sustained?

An American retreat from Iraq will leave Iran the regional victor. How will Saudi Arabia respond? Will military action to forestall Iran acquiring nuclear weapons be less or more likely? China's rulers have so far been silent during the unfolding crisis. Will America's weakness embolden them to assert China's power or will China continue its cautious policy of 'peaceful rise'? At present, none of these questions can be answered with any confidence. What is evident is that power is leaking from the US at an accelerating rate. Georgia showed Russia redrawing the geopolitical map, with America an impotent spectator.

Outside the US, most people have long accepted that the development of new economies that goes with globalisation will undermine America's central position in the world. They imagined that this would be a change in America's comparative standing, taking place incrementally over several decades or generations. Today, that looks an increasingly unrealistic assumption.

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.

Ron Paul: "We Will Remain a Pariah in the Middle East"

"We Will Remain a Pariah in the Middle East"



By Ron Paul

A US puppet government protected by 50,000 American soldiers is not the road to peace.

Posted March 04, 2009

How Wall Street Paid For Its Own Funeral

How Wall Street Paid For Its Own Funeral

Marina Litvinsky

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A new report says that Wall Street has only itself to blame for the misguided deregulation that led to the current deepening financial crisis.

Issued Wednesday by Essential Information and the Consumer Education Foundation, the report documents billions of dollars spent by the financial sector on what would eventually be their own downfall.

The 231-page report, "Sold Out: How Wall Street and Washington Betrayed America," shows that the financial sector invested more than 5 billion dollars on purchasing political influence in Washington over the past decade, with as many as 3,000 lobbyists winning deregulation and other policy decisions that led directly to the current financial collapse.

"The report details, step-by-step, how Washington systematically sold out to Wall Street," said Harvey Rosenfield, president of the California-based non-profit organisation Consumer Education Foundation.

"Depression-era programmes that would have prevented the financial meltdown that began last year were dismantled, and the warnings of those who foresaw disaster were drowned in an ocean of political money," he said. "Americans were betrayed, and we are paying a high price - trillions of dollars - for that betrayal."

According to the report, government regulators, Congress and the executive branch have, on a bipartisan basis, spent the past three decades steadily eroding the regulatory system that restrained the financial sector from acting on its own worst tendencies.

From 1998-2008, Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made political contributions totalling 1.725 billion dollars and spent another 3.4 billion on lobbyists - a financial juggernaut aimed at undercutting federal regulation.

"Congress and the Executive Branch responded to the legal bribes from the financial sector, rolling back common-sense standards, barring honest regulators from issuing rules to address emerging problems and trashing enforcement efforts," said Robert Weissman of Essential Information and the lead author of the report.

"The progressive erosion of regulatory restraining walls led to a flood of bad loans, and a tsunami of bad bets based on those bad loans," he said. "Now, there is wreckage across the financial landscape."

The report documents a dozen distinct deregulatory moves that, in concert, led to the financial meltdown.

For example, the "rise of the culture of recklessness" was aided by the repeal of the Glass-Steagall Act. The Financial Services Modernisation Act of 1999 formally repealed the 1933 statute and related laws, which prohibited commercial banks from offering investment banking and insurance services. Erasing them from the books helped create the conditions in which banks invested monies from checking and savings accounts into creative financial instruments such as mortgage-backed securities and credit default swaps - investment gambles that rocked the financial markets in 2008.

The report also said that banking regulators retained authority to crack down on predatory lending abuses, which would have protected homeowners and lessened the current financial crisis if the regulators hadn’t "sat on their hands." The Federal Reserve took just three formal actions against subprime lenders from 2002 to 2007. The Office of Comptroller of the Currency, which has authority over almost 1,800 banks, took three consumer-protection enforcement actions from 2004 to 2006.

Another deregulatory federal law that benefited mortgage lenders at the expense of the public deals with assignee liability. It states that with limited exceptions, only the original mortgage lender is liable for any predatory and illegal features of a mortgage - even if the mortgage is transferred to another party.

The report points out that this arrangement effectively immunised acquirers of the mortgage ("assignees") for any problems with the initial loan, and relieved them of any duty to investigate the terms of the loan. Wall Street interests could purchase, bundle and securitise subprime loans, including many with pernicious, predatory terms, without fear of liability for illegal loan terms.

The arrangement left victimised borrowers with no cause of action against anyone but the original lender, and typically with no defences against being foreclosed upon.

Other misdeeds that led to the financial crisis include prohibitions on regulating financial derivatives; a voluntary regulation scheme for big investment banks; and the repeal of regulatory barriers between commercial banks and investment banks.

The report presents data on financial firms’ campaign contributions and disclosed lobbying investments, which supports its claim that "political decisions were influenced by political expenditures and extraordinary lobbying," as Weissman put it.

For example, securities firms invested more than 504 million dollars in campaign contributions, and an additional 576 million dollars in lobbying, while commercial banks spent more than 154 million dollars on campaign contributions and invested 383 million dollars in officially registered lobbying.

Individual firms spent tens of millions of dollars each. During the decade-long period Goldman Sachs spent more than 46 million dollars on political influence buying; Citigroup spent more than 108 million; and the now defunct Merrill Lynch spent more than 68 million dollars.

According to the report, the financial contributions were bipartisan: about 55 percent of the political donations went to Republicans and 45 percent to Democrats, primarily reflecting the balance of power over the decade. Democrats took just more than half of the Wall Street’s 2008 election cycle contributions.

The financial sector also bolstered its political strength by placing Wall Street expatriates in top regulatory positions, including the post of Treasury Secretary held by two former Goldman Sachs chairs, Robert Rubin and Henry Paulson.

Financial firms employed a legion of lobbyists - maintaining nearly 3,000 separate lobbyists in 2007 alone. Insurance companies had 1,219 lobbyists working for them; Real estate interests hired 1,142.

These firms drew heavily from former government officials in choosing their lobbyists. Surveying 20 leading financial firms, the report found that 142 of the lobbyists they employed from 1998-2008 were previously high-ranking officials or employees in the executive branch or Congress.

"It’s very important to identify the causes of the crisis if we are to fix it and prevent it from occurring again," Weissman told IPS, speaking to the report’s relevance.

He adds that one of the ways through which many deregulatory moves were justified was the claim that they facilitated "financial innovation - a buzz word on Wall Street and Washington."

"Our review suggests that while there may be some innovations that are socially beneficial, in general (financial innovation has served as) a code word for complexity," he explained. "It has been a means for Wall St. to confuse consumers and investors, extract money from them and the overall economy, and build up a house of cards that has now tumbled down to disastrous effects."

The report calls on Congress to adopt the view that Wall Street has no legitimate seat at the table. "This time, legislating must be to control Wall Street, not further Wall Street’s control," it says.

"The first substantive recommendation we make is to undue the deregulatory decisions that we have profiled," said Weissman.

Other recommendations include prohibiting some forms of financial instruments, as well as a financial transaction tax to slow down speculation and curb the turbulence in the markets.

1/3 Of America Is Crazy: They Think Their Jobs Are Safe

1/3 Of America Is Crazy: They Think Their Jobs Are Safe

By Jill Andresky Fraser

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According to a recently released AP-GfK poll, 32% of Americans are crazy.

Oh, sorry. The poll actually revealed that 47% of those asked worry "a lot" or "some" about the possibility of losing their jobs. True, that's nearly twice as many as the same poll detected in February 2008, when only 28% of Americans polled raised their hands and acknowledged anxiety.

More noteworthy, though, and much more difficult to explain, is this conundrum: If the AP-GfK poll is to be trusted, almost one-third of all Americans say that they are worried about losing their jobs "not much" or "not at all."

Let's think about what this means. The current official U.S. unemployment rate of 7.6% (up from 7.2% just one month earlier) doesn't faze this optimistic bunch; nor, we might assume, would the news that the real unemployment rate is probably closer to 14%, if you include all those people who are involuntarily underemployed because part-time jobs are the only ones they can find. (The most realistic unemployment figure is undoubtedly higher still, if you include all the previously "self-employed" people whose income has dried up along with the economy.)

Yet even sticking to that 7.6% figure, there are still 4.1 million more people out of work now than 12 months ago. Evidently, that doesn't faze this self-confident group either. Sixty-five percent of survey respondents reported that a friend had lost a job thanks to the cratering economy in the past six months. Twenty-five percent had a family member who had lost a job during this period. It seems that doesn't get to them either… but you get the idea.

An astonishing 32% of those surveyed by AP-GfK are somehow confident that they, at least, are secure in their jobs. (The missing 21% checked off "didn't apply" to the question, including presumably the 10% of those polled who reported already getting the ax during the past six months.) A recent New York Times/CBS News Poll came up with similar findings. In that poll, a marginally larger and so marginally more astonishing 35% of Americans reported themselves not in the least concerned that someone in their household might be out of work in the next 12 months.

Thinking about this optimistic third of Americans, it's hard not to reach one basic conclusion: They're nuts.

Surveying the Layoff Landscape

Polls like these attract respectful attention from the mainstream media. An Associated Press article about the AP-GfK poll, with the typical headline, "Fears over Economy Growing, Poll Says," found its way into newspapers across the country, including the Seattle Times, Sacramento Bee, Washington Times, and Star Tribune of Minneapolis/St. Paul. The article breezed through a batch of fairly predictable findings: lots of people are worried about paying their bills; they're afraid that the value of their stocks and retirement investments will drop; and more than half of poll respondents aren't confident that they will have enough money to live comfortably in retirement.

Yet, for anyone who actually considered the poll, or read between the lines of that widely-reprinted AP article, one question seems too pressing to ignore: How, in the present economic environment, could 32% of Americans fail to grasp that job security no longer exists -- not in the U.S., nor elsewhere in the global economy. Today's most salient question isn't, will you lose your job (if you still have one), but when?

No question, it's getting harder and harder to count on a paycheck. That's certainly true for all the people who have spent their work lives in industries now visibly disintegrating around them (which would include automobile manufacturing, journalism, book publishing, and the rest of the media, the retail sector, financial services, construction, and so on). It's hardly less true for countless people living in one of the 40 or so states with significant budget gaps that need to be plugged, states where cutbacks along the lines of California's recent budget cataclysm are just waiting to happen.

Today, few industries and careers can be considered "safe." After all, technology giants like National Semiconductor and Dell have already begun laying people off; so has that symbol-of-all-symbols Microsoft, which recently announced the first major layoff in the company's history. Tiny branches of local libraries are laying people off too, despite the fact that, in many communities, libraries have emerged as communal gathering spots for unemployed people of all ages and at all stages in their careers.

Meanwhile, throughout the global marketplace, mass firings have become an acceptable knee-jerk reaction to whatever bad news comes along. Indeed, the layoff has become the default management mechanism for employers of every shape, size, and financial condition. To take just one prominent example, in its restructuring plan, which General Motors recently submitted to the Treasury Department, the company requested as much as $30 billion in bailout funds while promising, in return, to cut 47,000 employees worldwide. How much more would it cost to save those jobs? Unfortunately, that kind of bailout isn't going to be on anybody's table.

Perhaps AP-GfK should have polled people about whether or not they expected mass layoffs at their places of employment. As defined by the U.S. Bureau of Labor Statistics (BLS), a mass layoff occurs whenever at least 50 initial claims for unemployment insurance are filed by the former employees of any single establishment during a five-week period. During December 2008 alone, there were, by those standards, 2,275 mass layoff "events" nationwide, down slightly from November's record high of 2,333. As a point of comparison, there were "just" 1,352 mass layoffs in November 2007 and 1,469 the following month.

More bad news, more layoffs. This pattern has become mind-numbingly predictable, which, perhaps, makes it easier for those non-anxious job-holders to ignore. Or maybe they are just the type of people who deny the possibility that anything really bad could ever happen to them, regardless of what's going on elsewhere.

Layoff announcements tend to happen on Mondays or Fridays. (Good poll question: Do you try to skip the news on Mondays and Fridays?) With this downturn getting worse, it's a likely bet, though, that most days are layoff days someplace or other. So it may well be that those who want to keep denying the realities of job insecurity will need to stop watching or reading the news entirely. Maybe that 32% already has.

The Bureau of Labor Statistics also reports on what it calls "extended" mass layoffs, which is what happens when private sector nonfarm employers report that 50 or more employees have remained out of work for at least 31 days. During the fourth quarter of 2008, 3,140 extended mass layoffs left 508,859 people "separated" from their jobs. Not surprisingly, these are the highest numbers since the BLS started recording this data in 1995. The construction and manufacturing sectors hit record highs for extended mass layoffs, and so did eight states: Alaska, California, Hawaii, Idaho, Indiana, Missouri, New Jersey, and Wyoming.

Living on the Moon

In my admittedly random survey of the universe, the only men and women I can find who seem to feel secure in their jobs are teachers with tenure. Now it's possible that those 32% of survey respondents who believe things are A-OK are on tenured faculties. But if that's so, I think the pollsters should have disclosed it.

Only kidding. In evaluating just how out-of-touch-with-reality that third of AP-Gfk's respondents really are, it would have been interesting to know a little bit about their jobs, employers, and industries. The health-care sector, for example, managed to eke out job growth consistently throughout last year. Yet according to the Bureau, once you turn to other areas of the economy, the so-called hires rate decreased during 2008 in a number of fields, including the durable goods manufacturing sector, as well as nondurable goods manufacturing, the retail trade, the arts, entertainment, and recreation, not to speak of "accommodation and food services," the Federal government, and state and local governments pretty much across the board. That same "hires rate" declined in all four regions of the U.S. in the same period, with the largest declines in the South. (Possible poll question: Do you live on the moon?)

Here's something else I don't understand about that recent poll or coverage of it: Rational people tend to feel greater levels of job insecurity the more they read about layoffs and experience job loss around them. In total, there were 7,818 extended mass layoffs during 2008. Factors like declining demand for business goods and services, contract cancellations, and excess inventory accounted for 44% of those layoffs. And those same factors aren't going away anytime soon. Most people sense that. At least I think they do.

Consider James Johnson, who recently emailed this note to my website, EconoWhiner.com (all names have been changed to protect confidentiality): "I called a contact at one of our client's offices only to be told that she had been laid off last week," James reported. And that was just the beginning. "I headed into a meeting with another client and right before that meeting began, they called one of my colleagues, my best friend at the office, into a side meeting where they fired him -- part of a large bank layoff. It was the closest this has come to me losing my job and I felt that the Depression had hit."

It's a pretty good bet that James, although still employed, would be one of those people reporting at least some work anxiety. Who wouldn't? As a longtime journalist, married to a longtime editor, living on the same island as Wall Street, it's fair to say we have so many friends who are out of work that actually having a job is coming to seem odd. I can practically count on one hand the families I know in which both spouses seem "safely" employed.

Denial as a Job Strategy

In a global job market that seems to offer few safe havens, I'd go so far as to argue that most rational people are scared witless. Many working and nonworking people don't have a clue about what to do next. If they're still employed, they're knocking on wood. Maybe that's one reason at least some of those 32% claimed not to be anxious -- they were superstitious and didn't want to jinx themselves. For other people, there may well be a sense of "why bother?" Why acknowledge job anxieties when you're only going to feel more stymied or confused as a result? After all, it's not as though there are obvious ways to plan or redirect your career path in a world that seems to be increasingly full of job dead ends. Then again, for at least some within this large group, "ignorance is bliss" may feel more like a career strategy than a cliché.

Yet, mustering all the possible explanations I can conjure up, I still don't get it. I still can't quite understand how anyone, let alone one-third of all Americans, could deny the realities of our ever-more precarious workplace. Listen to Annette Miller, who recently told EconoWhiner:

"I have retrained several times, relocated many times, and always survived, at least until now. This time it really is different, and I think that everyone can sense that. It feels like there are no actual jobs at the end of the Monster.com, Twitter, and Facebook rainbow -- it's really all one big support group. No one gets to go to a regular place every day where they get paid on a regular basis. But everyone pretends anyway, because what's the alternative to this ceaseless networking? Sitting at home rewriting your resume one more time?"

How about a poll question that asks, "If you lose your job, do you expect to be out of work for a relatively short or a relatively long time?" After all, long-term unemployment, which the Bureau of Labor Statistics officially defines as being jobless for 27 weeks or more, has doubled in the past 12 months. Back in January 2008, 1.3 million people fell into this category. In January 2009, the number was 2.6 million.

Here's how Gene Dawson recently described the situation in a comment to EconoWhiner:

"I have been out of work (and getting by with freelancing, but that well is soon running dry) for 17 months. 'I couldn't get arrested' pretty much describes my life for the past year, after working hard for 15 years in an industry in which I was known for my extensive network, quality work, and integrity. Whatever."

Another promising poll question: If you lose your job and are out of work for a long period of time, will that be because of your lack of skills or the absence of job possibilities? After all, on the last business day of 2008, there were just 2.7 million job openings in the United States, bringing the job-openings rate to 1.9% -- the lowest since the Bureau of Labor Statistics started monitoring this eight years ago.

What's it like to be looking for a job when there essentially aren't any? Roberta Higgins caught the mood of the moment in this way:

"I was laid off in May 2008 from a job I was sure I would have until I retired. So now I spend my days sending my resume into the black hole of the Internet, not sure if it even reached its destination. I was completely overwhelmed when I actually received a letter in the mail from an organization that informed me I did not get the job I had applied for but was more than welcome to reapply if another opening came available. I keep it in a special place so that when I feel totally disconnected from the outside world I can take it out and read it."

How close are we all to this work-related abyss?

One important lesson that a poll like this one has to offer is, quite simply, that polls can only tell us so much. And sometimes, it's not really very much at all. After all, if it's true that we can't dream about our own deaths, maybe we can't contemplate a world in which the skills that we've learned, the jobs that we've worked at, the employers who have hired us, and the industries that we've taken for granted are disappearing all around us. Maybe that one-third of Americans are simply in denial. Maybe the real story is, why aren't more of us?