Friday, March 6, 2009

The credit crunch tent city which has returned to haunt America

The credit crunch tent city which has returned to haunt America

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A century and a half ago it was at the centre of the Californian gold rush, with hopeful prospectors pitching their tents along the banks of the American River.

Today, tents are once again springing up in the city of Sacramento. But this time it is for people with no hope and no prospects.

With America's economy in freefall and its housing market in crisis, California's state capital has become home to a tented city for the dispossessed.


Rich and poor: The tents and other makeshift homes have sprung up in the shadow of Sacramento's skyscrapers

sacramento tent city

Shanty town: The tent city is already home to dozens of people, many left without jobs because of the credit crunch

Those who have lost their jobs and homes and have nowhere else to go are constructing makeshift shelters on the site, which covers several acres.

As many as 50 people a week are turning up and the authorities estimate that the tent city is now home to more than 1,200 people.

In a state more known for its fantastic wealth and the glitz and glamour of Hollywood, the images have shocked many Americans.

Conditions are primitive, with no water supply or proper sanitation.

Many residents have to walk up to three miles to buy bottled water from petrol stations or convenience stores.

Ben Cardwell

Ben Cardwell, carries supplies to his tent at a homeless settlement

sacramento tent city

Tammy Day, a homeless woman, cooks potatoes on a campfire at the site

At other times, charity workers arrive to hand out free food and other supplies.

Joan Burke, who campaigns on behalf of the homeless, said the images of Americans living in tents would shock many.

'It should be an eye- opener for everybody,' she said. 'But we shouldn't just be shocked, we should take action to change things, because it's unacceptable.

'It is unacceptable that in this day and age we have gone back to a situation like we had during the Great Depression.'

tammy day

Homeless: Keith and Tammy Day cook dinner

Authorities in Sacramento, where Governor Arnold Schwarzenegger has his office,
admit the sight of families living in such poverty is not pretty.

But faced with their own budget crisis and a £30billion deficit, they have had little choice but to consider making the tent city a permanent fixture.

The city's mayor Kevin Johnson said: 'I can't say tent cities are the answer to the homeless population in Sacramento, but I think it's one of the many things that should be considered and looked at.'

Shanty town

Shanty towns sprung up during the Great Depression as people lost their jobs and homes

dorothea lange mirgant mother

Migrant Mother: Dorothea Lange's famous photograph from the Great Depression features Florence Owens Thompson, 32, a mother-of-three who had just sold the family's tent to buy food

As America's most powerful state California had the same gross domestic output as Italy and Spain, but it has been among the hardest hit by the recession and housing crisis.

Foreclosure rates last year rocketed by 327 per cent, with up to 500 people a day losing their home.

Coupled with massive job cuts that have seen one in ten workers laid off, many people who once enjoyed a middle class existence are now forced into third world conditions.

Former car salesman Corvin and his wife Tena are among the newest residents of the tent city.

sacramento tent city

Tent city residents queue up to receive supplies handed out by a local charity

The couple, who are in their fifties, lost their home and jobs around the same time.

With homeless shelters full in Sacramento, they had little choice but to use what savings they had left to buy a tent.

The couple admit they have yet to tell their grown-up children about their hand-to-mouth existence.

Tena said: 'I have a 35-year-old son, and he doesn't know. I call him, about once a month and on holidays, to let him know that I'm well and healthy.

'He would love me anyway, but I don't want to worry him.'

The shame of Sacramento's tent city was given a much wider airing after it was featured on the Oprah Winfrey show which is watched by more than 40million people a week.

Many of those who have found themselves homeless worked in the building trade.

But with no new home builds and as many as 80,000 people losing their job every month, there is little chance of employment. Governor Schwarzenegger last month approved a budget to address the state's deficit, ending a three-month stalemate among lawmakers.

As well as increasing taxes, he has imposed drastic cuts in education, healthcare and services that will affect everyone living in the state.

Many of those living in the tent city are pinning their hopes on President Obama's $787billion stimulus package which is aimed at rescuing the economy and creating jobs.

The President has also announced plans to save the homes of nine million people from foreclosure by restructuring their mortgage debt.

Barack Obama bets the farm in $4 trillion poker game

Barack Obama bets the farm in $4 trillion poker game

The President believes he can change US politics for a generation. If he's wrong he could bankrupt the whole country

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One of the most seductive elements of Barack Obama's ascent to the White House was his unshakeable conviction that he was being called upon, at a time of epochal peril, to bend the arc of history America's way.

Only a candidate possessed with such boldness and self-belief would have challenged Hillary Clinton for the Democratic nomination two years after leaving the Illinois state senate, promising in his first campaign speech to “transform a nation and usher in a new birth of freedom on this Earth”.

Only a man who frequently compares himself to America's greatest President, Abraham Lincoln, would declare that when he was elected, “the rise of the oceans will begin to slow”. Only someone who believes that America is on the crest of a dangerous historic wave - and that he “can help guide it” - would have undertaken a glitzy world tour midway through the campaign.

Such ostentatious gambles underscored his promise to transform US governance, and with his intellect and cool temperament made a combination many found thrilling.

In his first month in office he has pushed through an unprecedented $787 billion economic stimulus package, announced plans to save the car industry, stabilise the stricken banking sector and stem the flood of home repossessions.

Then came his near-$4-trillion budget last week. It is a manifesto to usher in a new age of government activism that involves levels of borrowing and spending never before seen in the US and is a document of such staggering ambition and risk that even some of Mr Obama's Democratic supporters are suddenly beginning to feel a little queasy.

A keen poker player, Mr Obama is gambling not only his own presidency, but the future wellbeing of the country. If he pulls it off, they might find room for him on Mount Rushmore. If he fails, he could bankrupt the world's largest economy.

There have been only a few watershed moments in US history, and this is one. In the face of such a dark economic crisis, Mr Obama believes that timidity will beget catastrophe. He believes that the peril of the moment compels him to tackle both the short and long-term financial problems all at once - and quickly.

What he unveiled last week was one of the most audacious agendas announced by a new president. He declared his intention not just to pump trillions of dollars into a short-term rescue for the economy, but also to press ahead with enormously costly plans to trigger a green industrial revolution, transform education and provide health coverage to all Americans. These are issues that have bedevilled Congress and other presidents for decades. Achieving just one would be an extraordinary achievement. Mr Obama wants all three - and fast.

What was most striking about the budget - including that it will explode the federal deficit to $1.75trillion this year, its highest since the Second World War - was that it was a ruthless declaration of how Mr Obama intends fundamentally to change the American social contract, from Right to Left.

Its goal is not just to rescue the economy. It is to crush conservatism, end the age of anti-tax, anti-regulation policies that have been the guiding philosophies of US governance for a generation, and usher in a fresh “epoch”, as his aides call it, of New Deal-Great Society wealth redistribution and central intervention that were repudiated by Ronald Reagan 30 years ago. Much of his agenda will be paid for by a ten-year, $1 trillion tax increase on families earning more than $250,000 a year, beginning in 2011, a move that critics say risks stunting the economic recovery.

Mr Obama and his aides are particularly attracted to the notion, put forward by the Yale political scientist Stephen Skowronek, that most of the truly transformative US presidents - and there are only a handful - followed failed ones. They include Thomas Jefferson after John Adams, Lincoln after James Buchanan, FranklinD. Roosevelt after Herbert Hoover and Ronald Reagan after Jimmy Carter.

Their belief is that these presidents were able to reshape, for at least a generation, the governing philosophy and electoral alignment because the public rejected the era that preceded them. Yet presidents who believe that they are governing at such transformational moments - as Mr Obama does - take bigger risks to achieve momentous change. The stakes he has placed on the table with his budget are extraordinary.

What has begun to trouble some even within his own party is that Mr Obama's pledge to spend the US out of recession, while slashing the budget deficit to $533 billion within four years, already looks recklessly optimistic. Few dispute, even among Republicans, the need for healthcare reform or to wean America off foreign oil. It is the scale of debt that Mr Obama is willing to incur to achieve these goals that is causing such heartburn.

And it is not just Americans who desperately need him to prevail. As Gordon Brown said in Washington this week, while pledging faith in the President's plans, everyone is watching the US economy. The entire developed world is banking on Mr Obama to succeed.

But much of his promise to rein in the deficit rested on a projection that the recession will cease and the US economy grow next year, but nobody can clearly see an end to this slump. The central question - how to stop the banking sector from collapse - is still a work in progress. They prefer huge injections of cash to stop the banks dying - but stop short of nationalisation - while they try to work out how to rid them of at least $2 trillion of toxic assets. There is still a significant chance that the scale of debt involved could devour Mr Obama's presidency.

The markets are so unnerved about Mr Obama's ability to rescue the financial sector, and by the numerous bailouts that have had little effect, that wealth is being destroyed on Wall Street at a rate not seen since the 1930s. The President said on Tuesday that he does not worry about “the day-to-day gyrations of the stock market”, but investors have made it clear that his economic prescriptions have so far failed to reassure them.

Mr Obama also says that much of his programme will be paid for by reducing the cost of the wars in Iraq and Afghanistan. Yet he has just ordered 17,000 more troops to Afghanistan for a war that his Defence Secretary says will be a long and difficult slog, and he is still groping for a strategy in Pakistan.

“We are always better off on the high wire,” David Plouffe, Mr Obama's campaign manager, said last year. Now Mr Obama is President, watching from below has become both enthralling and terrifying.

Gaza homes destruction 'wanton'

Gaza homes destruction 'wanton'

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Human rights investigators say Israeli forces engaged in "wanton destruction" of Palestinian homes during the recent conflict in Gaza.

Amnesty International has told the BBC News website the methods used raised concerns about war crimes.

Israel's military said buildings were destroyed because of military "operational needs".

The Israeli Defense Forces said they operated in accordance with international law during the conflict.

However, the use of mines to destroy homes contradicted this claim, the head of the Amnesty International fact-finding mission to southern Israel and Gaza, Donatella Rovera, has argued.

Israeli troops had to leave their vehicles to plant the mines, indicating that they faced no danger and that there was no military or operational justification, she said.

Breaking the Silence, an Israeli group that gathers and circulates the testimonies of Israeli soldiers, has also told the BBC News website that its findings from the Gaza war suggested many demolitions had been carried out when there was no immediate threat.

"From the testimonies that we've gathered, lots of demolitions - buildings demolished either by bulldozers or explosives - were done after the area was under Israeli control," said Yehuda Shaul, one of the group's members.

Destruction of civilian property is not illegal in itself under international law, but it must be justifiable on military grounds - for example if the building was booby trapped or being used as cover for enemy fighters.

Thousands of buildings were destroyed in the 22-day Israeli operation.

Some of them were police stations, mosques and government premises attacked in targeted airstrikes, in many cases with surrounding buildings left in tact.

Reduced to rubble

There were also whole neighbourhoods reduced to rubble in areas where the Israeli ground forces were present.

Ms Rovera said Amnesty International was concerned about "large scale destruction of homes and other civilian properties" during the conflict.

"The destruction was, in our view, and according to our findings, wanton destruction - it could not be justified on military grounds," she said.

Ms Rovera said her team found fragments of anti-tank mines in and around destroyed properties.

Their use was also consistent with remains of houses, collapsed in on themselves as if blown up from below, rather than destroyed from above as in an airstrike, she said.

Troops would have had to leave their armoured vehicles to plant them and rig up the detonators, she said.

"Unless those operating on the ground felt not just 100% but 200% secure - that the places were not booby trapped, that they wouldn't come under fire - they could not have got out of the vehicles," she said. "They would not have used that method."

"The use of the method tells us even more that there wasn't the kind of danger that might have made it lawful to destroy some of those properties," Ms Rovera said.

"Wanton destruction on a large scale would qualify as a war crime," she said, adding that the practice was among several used in the conflict by both sides that Amnesty is concerned may constitute war crimes.

In one case visited by the BBC, six homes belonging to the extended family of Raed al-Atamna in the Izbit Abed Rabbo area, near the border with Israel, were destroyed.

Mr Atamna said a UN ordnance clearance team had found several mines in and around the remains of one of the homes.

He said he and his family had fled the area during the Israeli military operation, and returned to find their homes demolished.

'Substantial operational needs'

The IDF said buildings in the Gaza Strip were destroyed during Operation Cast Lead due to "substantial operational needs".

In a written statement, it said: "For example, buildings were either booby-trapped, located over tunnels, or fire was opened from within them in the direction of IDF soldiers.

"The terrorist organisations operated from within the civilian population, using them as a cover and made cynical use of the IDF's strict rules of engagement, opening fire from within civilian population centres, mosques, schools, hospitals and even private residences of citizens in the Gaza Strip.

"The troops were briefed and trained to avoid harming uninvolved civilians and did all they could to give warning in advance so that civilians could distance themselves from combat zones.

"The IDF emphasises that the terrorist organisation, Hamas, and its infrastructure were the target of Operation Cast Lead, and not the civilian population in Gaza."

A military source said the mines used do not detonate automatically and therefore do not represent a danger when left unexploded in the field.

Trickle Down Misery

Trickle Down Misery

by Abid Aslam

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The world's poorest people had nothing to do with the financial gimmickry that has brought the global economy to its knees but they are paying a heavy price for it and relief seems a long way off.

Poverty is increasing and the spectre of political upheaval looms over developing countries whose export earnings have dwindled amid tumbling commodity prices and sluggish global trade. Foreign investment and aid budgets are being cut. The resilience of remittances from migrant workers is being tested by a deep and still-unfolding recession.

As Dominique Strauss-Kahn, head of the International Monetary Fund (IMF), puts it: "After hitting first the advanced economies and then the emerging economies, a third wave from the global financial crisis is now hitting the world's poorest and most vulnerable countries."

In jeopardy, he adds, are "the major achievements of higher growth, lower poverty, and greater political stability that many low-income countries have made over the past decade."

Soaring food and fuel prices pushed 130 million to 155 million people in developing countries into poverty in 2008 and the World Bank reckons another 53 million people could join them this year. This would bring the total of those living at or below the international poverty line of two dollars a day to more than 1.5 billion people.

In Africa south of the Sahara this year, the crisis will rob 18 billion dollars from 390 million people who eke out a living below the international extreme-poverty line of one dollar a day. At 46 dollars per person the figure seems small but it represents fully one-fifth of their annual earnings, says the U.N. Educational, Scientific and Cultural Organisation (UNESCO).

An additional 200,000-400,000 children will die every year that the crisis persists, says the World Bank. By 2015, the additional death toll could rise to 2.8 million people. Those who survive will face cognitive damage inflicted by malnutrition as more go hungry. Yet, according to UNESCO, 43 of the world's 48 low-income countries lack the money to provide a "pro-poor fiscal stimulus".

Worse still, says the IMF, at least 22 of these countries could go bankrupt this year. Depending on just how bad things get, the cash-strapped governments will need an extra 25 billion to 140 billion dollars in grants and cheap loans to keep their external reserves at a "safe" level of around three to four months of imports. Even at its smallest, the sum represents about 80 percent of annual aid to all low-income countries in recent years.

Despite the additional need, the fund expects donors to cut their giving this year to 30 percent less than in 2008. The European Union (EU) has promised to provide 0.56 percent of national income in aid by 2010. Even if it keeps its word, the actual financial value of this commitment will shrink as member economies stall.

If current trends do not worsen in the interim, the EU commitment will have shrunk by 4.6 billion dollars, according to UNESCO. Kevin Watkins, the agency's top expert on education financing, says donors "could clearly do more to protect the world's poorest people from a crisis manufactured by the world's richest financiers".

Banks in rich countries lapped up 380 billion dollars of public money in the last three months of 2008 alone, he says. By contrast, seven billion dollars in extra aid would enable low-income countries to meet key education goals agreed by the international community.

Nor are global investors likely to be of use. Net flows of private capital to emerging markets - the wealthiest of the developing countries - plunged by nearly 50 percent from 929 billion dollars in 2007 to 466 billion dollars in 2008, according to the Institute of International Finance. The global banking lobby expects this year's total to fall to 165 billion dollars.

In many cases, critical financing will have to come not from donors or investors but from migrant workers who send money to their families back home. In good times and bad, these remittances have eclipsed official aid to countries ranging from Jamaica to Pakistan and the Philippines, in some cases generating up to one-fifth of national income.

Migrant workers sent home 305 billion dollars in 2008, up from 281 billion dollars in 2007, even as private investment in the developing world collapsed, the World Bank reckons. Unlike donors, almost all of which have yet to honour 1970s promises to allot less than one percent of national income for aid, migrants typically remit around five percent of their earnings.

Here, too, the outlook is worrying. Remittances grew last year but at a slower rate. In Mexico, they actually fell by 3.6 percent. No one seems to know what impact a severe global recession would have but the bank expects remittances to fall by about six percent this year before recovering in 2010.

The bank's prediction could prove overly optimistic. Jobs are evaporating everywhere as businesses fold or announce cuts in posts and plant. The International Labour Organisation (ILO) expects the global unemployment rate to reach 6.5 percent this year, with 30 million more people out of work than in 2007. The rate could rise further, to 7.1 percent for a loss of 50 million jobs since 2007, it says. Official figures tend to understate the problem.

Even those with jobs will find themselves increasingly vulnerable. Over the course of this year, says the ILO, 53 percent of people in formal employment could find themselves walking a high wire with no safety net to catch them if they suddenly lose their income.

If migrants lose their jobs and return home in significant numbers, remittances will swell as they repatriate their savings but then fall dramatically as a longstanding source of economic lifeblood dries up.

U.S. Military Aid to Israel

U.S. Military Aid to Israel


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In these days of economic crisis, budget overruns, earmarks, and multi-billion dollar bailouts, when Americans are being forced to tighten their own belts, one of the most automatic earmarks—a bailout by any measure—goes to a foreign government but is little understood by most Americans. U.S. military aid to Israel is doled out in annual increments of billions of dollars but remains virtually unchallenged while other fiscal outlays are drastically cut.

The United States and Israel signed a Memorandum of Understanding in August 2007 committing the U.S. to give Israel $30 billion in military aid over the next decade. This is grant aid, given in cash at the start of each fiscal year. The only stipulation imposed on Israel’s use of this cash gift is that it spend 74 per cent to purchase U.S. military goods and services.

The first grant under this agreement was made in October 2008, for FY2009, in the amount of $2.55 billion. To bring the total 10-year amount to $30 billion, amounts in future years will gradually increase until an annual level of $3.1 billion is reached in FY2013. This will continue through FY2018.

Israel is by far the largest recipient of U.S. foreign aid. Since 1949, the United States has provided Israel with $101 billion in total aid, of which $53 billion has been military aid. For the last 20-plus years, Israel has received an average of $3 billion annually in grant aid;, until now the grant has been a mix of economic and military aid.

Israel receives its aid under vastly more favorable terms than any other recipient. Egypt, for instance, receives $2 billion a year in economic aid, but this is a loan and must be repaid. Saudi Arabia also has U.S. military equipment in its arsenal, but it buys and pays for this equipment and is not given it, as Israel is.

Aid to Israel can be said to benefit the United States because it is spent to purchase equipment manufactured here. But this recycling of federal monies into the arms industry is not the wisest way to spur general economic recovery. In fact, in the midst of a financial crisis, incurring a long-term obligation of this magnitude is highly irresponsible.

When Israel attacks Palestinians, as during the recent assault on Gaza, its instruments of destruction are U.S. fighter jets and attack helicopters, U.S. missiles, U.S.-made white phosphorus, U.S.-made Caterpillar bulldozers. All of this American-made destruction is clearly identifiable to television audiences throughout the Arab and Muslim world, where viewers receive a steady diet of news showing Palestinian civilians being killed by weapons made in the USA. It is from this vast population, which feels kinship with Palestinians and feels itself to be under assault from the United States, that terrorists such as Osama bin Laden are able to find recruits.

The U.S. Foreign Assistance Act stipulates that no aid may be provided to a country that engages in a consistent pattern of violations of international human rights laws. Israel has been charged by human rights organizations such as Amnesty International and Human Rights Watch with precisely such violations during the Gaza assault and in past attacks. Israel also violates the Arms Export Control Act, which stipulates that U.S. weapons must be used only for “internal security.”

This arms package, furthermore, seriously undermines the mission of U.S. peace mediators such as former Senator George Mitchell, recently appointed by President Obama as envoy to the Middle East. As long as Israel can rest assured that it is guaranteed an annual arms package in the billions, it will have no incentive whatsoever to heed Mitchell’s mediation efforts, to make the territorial concessions necessary to reach a peace agreement, to stop building settlements and other infrastructure in the occupied Palestinian territories, or to stop its attacks on Palestinians.

By committing itself to this arms package, the United States is undermining with one hand the very peace agreement it is trying to promote with the other hand.

These distortions of U.S. national interests must stop.

AIG: Billions Dished Out in the Dark

AIG: Billions Dished Out in the Dark

By Robert Scheer

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This is crazy! Forget the bleating of Rush Limbaugh; the problem is not with the quite reasonable and, if anything, underfunded stimulus package, which in any case will be debated long and hard in Congress. The problem is with what is not being debated: the far more expensive Wall Street bailout that is being pushed through--as in the case of the latest AIG rescue--in secret, hurried deal-making primarily by the unelected secretary of the treasury and the chairman of the Federal Reserve.

Six months ago, we taxpayers began bailing out AIG with more than $140 billion, and then it went and lost $61.7 billion in the fourth quarter, more than any other company in history had ever lost in one quarter. So Timothy Geithner and Ben Bernanke huddled late into the night last weekend and decided to reward AIG for its startling failure with thirty billion more of our dollars. Plus, they sweetened the deal by letting AIG off the hook for interest it had been obligated to pay on the money we previously gave the company.

AIG doesn't have to pay the 10 percent interest due on the preferred stock the US government got for the earlier bailout funds because that interest will now be paid out only at AIG's discretion, which means never. The preferred stock, which got watered down, carried a cumulative interest, meaning we taxpayers would have recaptured some money if the company ever got going again, but that interest obligation was waived in the new deal.

We've already given AIG a total of $170 billion--an amount that dwarfs the $75 billion allocated to helping those millions of homeowners facing foreclosures. And more will be thrown down the AIG rat hole because President Barack Obama is blindly following the misguided advice of his top economic advisers, who insist that AIG is too big to fail.

"AIG provides insurance protection to more than 100,000 entities, including small businesses, municipalities, 401(k) plans and Fortune 500 companies who together employ over 100 million Americans," the joint Treasury Department and Fed statement declared while insisting that for that reason, plus the "systemic risk AIG continues to pose and the fragility of markets today, the potential cost to the economy and the taxpayer of government inaction would be extremely high."

What about the cost of inaction by Treasury and the Fed before this meltdown? If AIG were so important to the American economy, shouldn't government regulators have been looking more closely at its activities? They couldn't then, and even now they don't understand what AIG has been up to, because the company was allowed to operate in an essentially unregulated global economy in which multinational corporations have their way. As the Treasury/Fed statement concedes: "AIG operates in over 130 countries with over 400 regulators and the company and its regulated and unregulated subsidiaries are subject to very different resolution frameworks across their broad and diverse operations without an overarching resolution mechanism."

Oh, really? And you're discovering that only now, when you're making us bail AIG out? It wasn't that long ago that a couple of hustlers operating out of an AIG office in London were going wild making money off selling insurance on credit default swaps that no one could understand, but the company execs loved those huge profit margins. To challenge their maneuvering, as some in Congress attempted, was said by their defenders, including Geithner, to put them at an unfair disadvantage in the world market. Ignorance was bliss... until the bubble burst.

This was all belatedly conceded by Bernanke in his Senate testimony on Tuesday: "AIG exploited a huge gap in the regulatory system. There was no oversight of the Financial Products division. This was a hedge fund, basically, that was attached to a large and stable insurance company, made huge numbers of irresponsible bets--took huge losses. There was no regulatory oversight because there was a gap in the system."

AIG used to be in the conventional insurance business, covering identifiable risks it knew something about, until it took advantage of deregulation and a lack of government surveillance to come up with contrived new financial products. Even Maurice Greenberg, the man who built AIG from the ground up over a span of 40 years before he was forced out amid corruption charges in 2005, admits that he didn't understand the newfangled financial gimmicks that the company was peddling. This week, claiming he too was swindled, Greenberg sued in federal court, charging the AIG execs who forced him out with "gross, wanton or willful fraud or other morally culpable conduct," over the credit default swap portfolio that was part of his settlement.

US taxpayers now have ownership of almost 80 percent of AIG, but with the company's once solid traditional insurance business now suffering a steep loss of consumer confidence, it's not likely that even the formerly healthy parts of the company will be worth much. What we have here is all pain and no gain for the taxpayers roped into this debacle, which is proving to be the story of the entire banking bailout.

Hell Hath No Fury Like an Imperialist Scorned

Hell Hath No Fury Like an Imperialist Scorned

By William Blum

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Hugo Chávez's greatest sin is that he has shown disrespect for the American Empire. Or as they would say in America's inner cities — He's dissed the Man. Such behavior of course cannot go unpunished lest it give other national leaders the wrong idea. Over the years, the United States has gotten along just fine with brutal dictators, mass murderers, torturers, and leaders who did nothing to relieve the poverty of their population — Augusto Pinochet, Pol Pot, the Greek Junta, Ferdinand Marcos, Suharto, Duvalier, Mobutu, the Brazil Junta, Somoza, Saddam Hussein, South African apartheid leaders, Portuguese fascists, etc., etc., terrible guys all, all seriously supported by Washington at one time or another; for none made it a regular habit, if ever, to diss the Man.

The latest evidence, we are told, that Hugo Chávez is a dictator and a threat to life as we know it is that he pushed for and got a constitutional amendment to remove term limits from the presidency. The American media and the opposition in Venezuela often make it sound as if Chávez is going to be guaranteed office for life, whereas he of course will have to be elected each time. Neither are we reminded that it's not unusual for a nation to not have a term limit for its highest office. France, Germany, and the United Kingdom, if not all of Europe and much of the rest of the world, do not have such a limit. The United States did not have a term limit on the office of the president during the nation's first 162 years, until the ratification of the 22nd Amendment in 1951. Were all American presidents prior to that time dictators?

In 2005, when Colombian President Alvaro Uribe succeeded in getting term limits lifted, the US mainstream media took scant notice. President Bush subsequently honored Uribe with the American Presidential Medal of Freedom. But in the period leading up to the February 15 referendum in Venezuela, the American media were competing with each other over who could paint Chávez and the Venezuelan constitutional process in the most critical and ominous terms. Typical was an op-ed in the Washington Post the day before the vote, which was headlined: "Closing in on Hugo Chávez". Its opening sentence read: "The beginning of the end is setting in for Hugo Chávez."12

For several years now, the campaign to malign Chávez has at times included issues of Israel and anti-Semitism. An isolated vandalism of a Caracas synagogue on January 30th of this year fed into this campaign. Synagogues are of course vandalized occasionally in the United States and many European countries, but no one ascribes this to a government policy driven by anti-semitism. With Chávez they do. In the American media, the lead up to the Venezuelan vote was never far removed from the alleged "Jewish" issue.

"Despite the government’s efforts to put the [synagogue] controversy to rest," the New York Times wrote a few days before the referendum vote, "a sense of dread still lingers among Venezuela’s 12,000 to 14,000 Jews."13

A day earlier, a Washington Post editorial was entitled: "Mr. Chávez vs. the Jews - With George W. Bush gone, Venezuela's strongman has found new enemies."14 Shortly before, a Post headline had informed us: "Jews in S. America Increasingly Uneasy - Government and Media Seen Fostering Anti-Semitism in Venezuela, Elsewhere"15

So commonplace has the Chávez-Jewish association become that a leading US progressive organization, Council on Hemispheric Affairs (COHA) in Washington, DC, recently distributed an article that reads more like the handiwork of a conservative group than a progressive one. I was prompted to write to them as follows:

Dear People,

I'm very sorry to say that I found your Venezuelan commentary by Larry Birns and David Rosenblum Felson to be remarkably lacking. The authors seem unable, or unwilling, to distinguish between being against Israeli policies from anti-semitism. It's kind of late in the day for them to not have comprehended the difference. They are forced to fall back on a State Department statement to make their case. Is that not enough said?

They condemn Chávez likening Israel’s occupation of Gaza to the Holocaust. But what if it's an apt comparison? They don't delve into this question at all.

They also condemn the use of the word "Zionism", saying that "in 9 times out of 10 involving the use of this word in fact smacks of anti-Semitism." Really? Can they give a precise explanation of how one distinguishes between an anti-Semitic use of the word and a non-anti-semitic use of it? That would be interesting.

The authors write that Venezuela's "anti-Israeli initiative ... revealingly transcends the intensity of almost every Arabic nation or normal adversary of Israel." Really. Since when are the totally gutless, dictator Arab nations the standard bearer for progressives? The ideal we should emulate. Egypt, Saudi Arabia, and Jordan are almost never seriously and harshly critical of Israeli policies toward the Palestinians. Therefore, Venezuela shouldn't be?

The authors state: "In a Christmas Eve address to the nation, Chávez charged that, 'Some minorities, descendants of the same ones who crucified Christ ... took all the world’s wealth for themselves'. Here, Chávez was not talking so much about Robin Hood, but rather unquestionably dipping into the lore of anti-Semitism." Well, here's the full quote: "The world has enough for all, but it turns out that some minorities, descendants of the same ones who crucified Christ, descendants of the same ones who threw Bolivar out of here and also crucified him in their own way at Santa Marta there in Colombia ..." Hmm, were the Jews so active in South America?

The ellipsis after the word "Christ" indicates that the authors consciously and purposely omitted the words that would have given the lie to their premise. Truly astonishing.

After Chávez won the term-limits referendum with about 55% of the vote, a State Department spokesperson stated: "For the most part this was a process that was fully consistent with democratic process." Various individuals and websites on the left have responded to this as an encouraging sign that the Obama administration is embarking on a new Venezuelan policy. At the risk of sounding like a knee-reflex cynic, I think this attitude is at best premature, at worst rather naive. It's easy for a State Department a level-or-so above the Bushies, i.e., semi-civilized, to make such a statement. A little more difficult would be accepting as normal and unthreatening Venezuela having good relations with countries like Cuba, Iran and Russia and not blocking Venezuela from the UN Security Council. Even more significant would be the United States ending its funding of groups in Venezuela determined to subvert and/or overthrow Chávez.

You've got to be carefully taught

I've been playing around with a new book for awhile. I don't know if I'll find the time to actually complete it, but if I do it'll be called something like "Myths of U.S. foreign policy: How Americans keep getting fooled into support". The leading myth of all, the one which entraps more Americans than any other, is the belief that the United States, in its foreign policy, means well. American leaders may make mistakes, they may blunder, they may lie, they may even on the odd occasion cause more harm than good, but they do mean well. Their intentions are honorable, if not divinely inspired. Of that most Americans are certain. And as long as a person clings to that belief, it's rather unlikely that s/he will become seriously doubtful and critical of the official stories.

It takes a lot of repetition while an American is growing up to inculcate this message into their young consciousness, and lots more repetition later on. Think of some of the lines from the song about racism from the Broadway classic show, "South Pacific" — "You've got to be taught" ...

You've got to be taught
from year to year.
It's got to be drummed
in your dear little ear.
You've got to be taught
before it's too late.
Before you are 6 or 7 or 8.
To hate all the people
your relatives hate.
You've got to be carefully taught.

The education of an American true-believer is ongoing, continuous. All forms of media, all the time. Here is Michael Mullen, chairman of the Joint Chiefs of Staff, the highest military officer in the United States, writing in the Washington Post recently:

"We in the U.S. military are likewise held to a high standard. Like the early Romans, we are expected to do the right thing, and when we don't, to make it right again. We have learned, after seven years of war, that trust is the coin of the realm — that building it takes time, losing it takes mere seconds, and maintaining it may be our most important and most difficult objective. That's why images of prisoner maltreatment at Abu Ghraib still serve as recruiting tools for al-Qaeda. And it's why each civilian casualty for which we are even remotely responsible sets back our efforts to gain the confidence of the Afghan people months, if not years. It doesn't matter how hard we try to avoid hurting the innocent, and we do try very hard. It doesn't matter how proportional the force we deploy, how precisely we strike. It doesn't even matter if the enemy hides behind civilians. What matters are the death and destruction that result and the expectation that we could have avoided it. In the end, all that matters is that, despite our best efforts, sometimes we take the very lives we are trying to protect. ... Lose the people's trust, and we lose the war. ... I see this sort of trust being fostered by our troops all over the world. They are building schools, roads, wells, hospitals and power stations. They work every day to build the sort of infrastructure that enables local governments to stand on their own. But mostly, even when they are going after the enemy, they are building friendships. They are building trust. And they are doing it in superb fashion."16

How many young servicemembers have heard such a talk from Mullen or other officers? How many of them have not been impressed, even choked up? How many Americans reading or hearing such stirring words have not had a lifetime of reinforcement reinforced once again? How many could even imagine that Admiral Mullen is spouting a bunch of crap? The great majority of Americans will swallow it. When Mullen declares: "What matters are the death and destruction that result and the expectation that we could have avoided it", he's implying that there was no way to avoid it. But of course it could have been easily avoided by not dropping bombs on the Afghan people.

You tell the true-believers that the truth is virtually the exact opposite of what Mullen has said and they look at you like you just got off the Number 36 bus from Mars. Bill Clinton bombed Yugoslavia for 78 days and nights in a row. His military and political policies destroyed one of the most progressive countries in Europe. And he called it "humanitarian intervention". It's still regarded by almost all Americans, including many, if not most, "progressives", as just that.

Now why is that? Are all these people just ignorant? I think a better answer is that they have certain preconceptions; consciously or unconsciously, they have certain basic beliefs about the United States and its foreign policy, most prominent amongst which is the belief that the US means well. And if you don't deal with this basic belief you'll be talking to a stone wall.


  • Washington Post, February 14, 2009, column by Edward Schumacher-Matos
  • New York Times, February 13, 2009
  • Washington Post, February 12, 2009
  • Washington Post, February 8, 2009
  • Washington Post, February 15, 2009, p. B7
  • William Blum is the author of:

    • Killing Hope: US Military and CIA Interventions Since World War 2
    • Rogue State: A Guide to the World's Only Superpower
    • West-Bloc Dissident: A Cold War Memoir
    • Freeing the World to Death: Essays on the American Empire

    Portions of the books can be read, and signed copies purchased, at

    Defense Contractors Gird for Fight

    Defense Contractors Gird for Fight

    Obama Announces New Era in Government Contracting

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    With President Obama’s announcement Wednesday that he intends to attack wasteful Pentagon spending, one of the most powerful and entrenched interests in Washington — the multi-billion dollar defense lobby — is sure to retaliate. Obama aides insist that they’re prepared for the fight ahead. Defense reformers and lobbyists aren’t yet convinced that they are.

    As part of a plan for fiscal responsibility, Obama issued a memorandum to all government agencies and departments informing them that the White House’s Office of Management and Budget will issue new guidelines by July 1 instructing them on what “inherently governmental” jobs cannot be outsourced and what new procedures are to be created to prevent government contracts from spiraling over budget — including “modifying or canceling such contracts.” At a press conference unveiling the memorandum, Obama singled out the defense industry for special opprobrium. “The days of giving defense contractors a blank check are over,” Obama said.

    Defense bloat has stunned auditors. A report last year from the Government Accountability Office found that 95 ongoing major defense programs exceeded their budgets, providing an accumulated excess cost of $295 billion to taxpayers. The programs include big-ticket items beloved by the military services, including the Army’s Future Combat System, the Navy’s Littoral Combat Ship and the Air Force’s Joint Strike Fighter, which are built by defense-industry giants like Lockheed Martin Corp., Boeing Co., and Raytheon Company, all of which have aggressive lobbying arms and excellent relationships with defense barons on Capitol Hill. According to the government’s Federal Procurement Database, which tracks federal contracts, the Defense Department reported over $394 billion worth of business with private contractors in fiscal 2008 alone.

    Defense contractors and their allies in government will not let that money go without a confrontation, say defense reformers. If he were a lobbyist, “I’d work with the bureaucrats to do what they always do,” said Winslow Wheeler, a three-decade veteran of Senate defense-budget fights who now directs a military-reform project at the Center for Defense Information. “The way the Pentagon wags say it is: ‘I’ll make them into a mushroom: keep ‘em in the dark and feed ‘em [manure].”

    Kenneth Baer, a spokesman for the Office of Management and Budget, had a combative tone for the defense lobby. “We have just lived through an era of irresponsibility where taxpayer dollars were wasted and some of the biggest challenges we face were kicked down the road and not dealt with,” he said. “We can keep our people safe and our defense strong without all of this waste and inefficiency.”

    Baer pointed to Obama’s YouTube address on his budget from Saturday, in which the president adopted more strident rhetoric than he has used to date to discuss the coming budget fight. “Special interests and lobbyists” are “gearing up for a fight” over his proposals, Obama said. “My message to them is this: So am I.”

    Over the past several months, as the economic picture worsened and Defense Secretary Bob Gates publicly warned the defense industry that the financial “spigot that opened on 9/11… is closing,” industry efforts have fought back. A high-profile lobbying campaign to portray the Air Force’s expensive F-22 Raptor fighter jet — which the service and manufacturer Lockheed Martin fear may be a casualty of defense cuts — as a jobs machine has accelerated. Allies like Sen. Saxby Chambliss (R-Ga.), whose home state features a major F-22 manufacturing plant, reciting the company’s talking point that 95,000 jobs could be lost if the jet gets the budgetary axe. A flurry of op-eds and blog posts from conservative writers have portrayed Obama’s first Pentagon budget request — estimated at $663.7 billion , which represents a four percent increase over the previous year’s budget before the costs of the two wars are factored in — as irresponsibly “sacrific[ing] American primacy,” in the words of a Bush administration Pentagon comptroller.

    One Pentagon official expects much more of that as the services and the defense industry push back against reform. Their “ground game,” the official said, will be run from the services’ legislative outreach and public-affairs offices, feeding talking points and strategy information to sympathetic members of Congress — something that “got the services in trouble in 2002″ with Defense Secretary Donald Rumsfeld when the Army resisted his ultimately-successful plan to scrap an archaic artillery system called Crusader. An “air game” will feature “a lot of ominous whispers on background to the press and conservative think tanks and commentators about endangering the American people and costing lives in some future fight.”

    Gates, whom Obama tasked with working closely with OMB, has told confidantes that he views a sustainable long-term rebalancing of defense priorities as one of his most important tasks now that Obama has given him the chance to continue on as Pentagon chief. His service under the Bush administration was more about supporting the immediate needs of the Iraq war after Bush fired Rumsfeld in November 2006. “The services are accustomed to reviews that start out with a lot of talk about setting priorities and making tough choices but in reality usually end with leaving everything more or less intact,” the Pentagon official said. “This time they have a secretary who really means it.”

    A former Lockheed Martin official who requested anonymity spelled out a substantive scenario for the defense industry to combat the OMB review process. The process would put the blame for cost overruns not on the contractors, but on the military services for failing to be specific about what precisely they want built or delivered. “I would lead with [telling the government], ‘We waste money because you can’t make up your mind,” the ex-official said.

    The ex-official explained that there is an inherent dynamic in the procurement process leading to companies undervaluing the true expense of their work in order to win a contract. “I make up a budget with my engineers, ‘OK, this is how much the project will cost.’ One bid will come in low among contractors A, B, C and D.” But in order to offer the low bid and win the contract, a contractor feels an incentive to shade down the project’s true cost. “So I’ll cut [my bid] 10 percent across the board,” the ex-official continued. “The engineers gave an accurate assessment, but you just cut it. When it comes to actually building the ship, everyone says ‘I need more money,’” in line with what the original engineering assessment of cost. Since the Pentagon has few restrictions against paying the increased cost of the contract after it’s been awarded — a practice that the OMB review will study — little prevents the overages from accumulating. Even less prevents the defense industry from low-bidding on a contract.

    One solution, the ex-Lockheed official proposed, is called firm fixed-price contracting, whereby the Defense Department informs contractors that it will pay for a contract up to a certain point and any overages must be paid by the contractor. Firm fixed-price contracting is in place for some defense items. “When they do that, contractors are very honest” with their cost estimates, the ex-Lockheed official said. “But then the government tends to say ‘We don’t like that number,’ or it’s too expensive. For decades you’ve been getting low bids, so when you get an honest bid you say it’s way too expensive.”

    The Pentagon official said that a smart strategy for the services would be to combat reform “indirectly through industry or military and veterans’ associations rather than directly.” Noting that the Army has already started distributing information about the value of Future Combat Systems, the official added, “The Army doesn’t seem to have figured this out.”

    If the ex-Lockheed official’s scenario doesn’t work, Scott Amey, the general counsel of the Project on Government Oversight, a budget watchdog organization, anticipates a different one. “I guarantee you we’re going to hear that the government can’t operate without defense contractors,” Amey said. “They’re [portrayed as] the driving force behind technology and innovation, and so a reliance on defense contractors is justified. We’re also going to hear some kind of backlash: ‘Many contractors operate efficiently and effectively, don’t allow a few bad defense contractors to spoil the bunch.”

    For Wheeler, the author of “The Wastrels of Defense: How Congress Sabotages U.S. Security,” the process will come down to how prepared OMB chief Peter Orzsag, his deputy for defense programs, Steve Kosiak, and Gates are to outmaneuver the defense lobby and its allies. “This is a real test for Gates and Peter Orzsag to write regulations that make it easier to do right thing and harder to do wrong thing and then fight the nasty brutal battles that will make it stick,” he said. “This is the first step in a long journey, if they’re serious.”

    Unemployment Jumps to 8.1 Percent as Job Loss Accelerates

    Unemployment Jumps to 8.1 Percent as Job Loss Accelerates

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    This report shows that recent economic projections were overly optimistic.

    The February employment report showed the labor market deteriorating at an even faster rate, with the unemployment rate rising from 7.6 percent to 8.1 in February. The economy lost 651,000 jobs in the month, but job loss for the prior two months was revised up as well. Job loss for the last three months is now reported at 2,013,000, an average of 671,000 per month.

    Job loss continues to be disproportionately in construction and manufacturing. Construction lost 104,000 jobs in February; it has lost 512,000 jobs since September, 7.2 percent of employment in the sector. Employment in the non-residential sector is falling almost as rapidly as in the residential sector.

    Manufacturing lost 168,000 jobs in February, bringing job loss in the sector to 845,000 since September, a decline of 6.3 percent. Hours per worker have also been reduced; the index of aggregate hours is down 9.6 percent since September. All sectors of manufacturing have been hit hard, but the auto sector has seen the sharpest decline, with employment down by 128,600, or 15.3 percent, since September. The hours index is down by 21.9 percent over this period.

    Retail lost 39,500 jobs, bringing its loss since September to 318,300. Employment in auto dealers has been holding up in spite of the plunge in sales. Employment is down by only 167,000, or 13.4 percent, since the pre-recession peak, even though sales are down more than 30 percent. In the same vein, employment in real estate is down by just 70,000, or 4.7 percent, even though sales are down by 40 percent. In both cases, workers are paid largely on commission, and therefore have likely seen their wages slashed even though they still have their jobs.

    Employment in trucking fell by 33,400 in February. It is down by 88,000 since October, a drop of 6.5 percent. This reflects the huge decline in goods being shipped. The employment services sector lost 87,500 in February. As a result of a sharp downward revision to prior data, this sector reportedly lost 402,000 jobs, 13.2 percent of employment, since September.

    The rise in the unemployment rate was accompanied by a 0.2 percent drop in the employment rate. The 3.1 percentage point drop in the employment rate already exceeds the decline in any downturn since 1948. Men have been disproportionately hit by the downturn, with their unemployment rate rising by 3.8 percentage points over the last year to 8.1 percent. The unemployment rate for women rose by 2.4 percentage points to 6.7 percent. This gap is not surprising, with construction and manufacturing as the big job losers.

    Black men saw a 6.9 percentage point jump in their unemployment rate over the last year to 14.9 percent. The employment rate for black teens dropped to 17 percent, the lowest level on record. The unemployment rate for Hispanics hit 10.9 percent, up 1.2 percentage points from January and 4.6 percentage points from last February.

    Unemployment has risen sharply for workers at all education levels. The 12.6 percent rate for workers without a high school degree is 5.2 percentage points above the year ago level. The 4.1 percent unemployment rate for college grads is nearly double the 2.1 percent rate of last February, and 0.7 percentage points higher than the previous high in 1992, when this series was first published.

    The number of people involuntarily employed part-time rose by 838,000 in February and is now 3,753,000 above its year ago level. This is consistent with the sharp decline in hours in the establishment survey.

    The one piece of somewhat good news in this report is that wages are continuing to rise, with nominal wages rising at 3.5 percent annual rate over the quarter. However, everything else in this report is extremely bad. The economy is in a free fall with no obvious brakes in place. The recent forecasts, used in analyzing the stimulus and the budget, which projected 8.5 percent unemployment for the 4th quarter, now look impossibly optimistic. The unemployment rate is likely to hit 8.5 percent by March and will almost certainly cross 9.0 percent by the early summer. Without substantial additional stimulus, it could cross 10 percent by year-end.

    Job Forecast for College Seniors: Grimmer Than Ever

    Job Forecast for College Seniors: Grimmer Than Ever

    By Laura Fitzpatrick

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    Smith College's career office sent its jittery job-hunting seniors a letter last month with a reassuring message: "There ARE jobs, and you can find employment." Unfortunately, there are far fewer jobs than anticipated, according to a report out today from the National Association for Colleges and Employers (NACE). The companies surveyed for the group's spring update are planning to hire 22% fewer grads from the class of 2009 than they hired from the class of 2008, a big letdown from the group's projections in October that hiring would hold steady. Some 44% of companies in the survey, conducted last month, said they plan to hire fewer new grads, and another 22% said they do not plan to hire at all this spring, more than double last year's figure. "If you were a student and were out there [interviewing] in the fall, you probably had a decent chance of getting a job," says Edwin Koc, director of strategic and foundation research at NACE. "But frankly, the spring does not look good." (See pictures of the college dorm's evolution.)

    Job prospects for college grads, which had been on the rise since 2004, dropped in virtually every sector this year. The most dramatic decline was, not surprisingly, in finance, which hemorrhaged 71% of expected job openings. Less expected but equally troubling is the 37% decline in hiring for professional services, which include accounting and engineering. "Poor hiring estimates from this area speak to the depth of the recession in the college labor market for the class of 2009," the report says. (See TIME's special report on paying for colleges.)

    Government is essentially the only industry planning to hire more new grads this year than last, as the new Administration expands and a graying workforce retires. (The only other sector with plans to increase hiring — that of distribution, transportation and utilities — had too few respondents for the projection to mean much.) The uptick in government recruiting is obvious to students. Last year, notes Dorothy Kerr, executive manager of Rutgers University's career services, there were just 15 government and nonprofit employers at the annual Big East Career Day in Manhattan's Madison Square Garden; others were kept out to make room for 135 private-sector employers. This year, just 80 private companies signed up for the March 13 event, where 30 federal agencies will be on hand accepting résumés. "The good news is, the Federal Government is definitely hiring," Kerr says. Still, according to the NACE report, the projected increase is less than 6%. (See 25 people to blame for the financial crisis.)

    Not only are fewer companies hiring, but more of those with openings are offering internships instead of full-time spots. Only a third of on-campus recruiters this year are looking to sign both full-time employees and interns, the report found, down from an average of two-thirds for the classes of 2007 and 2008. And 16% of employers will be hiring only interns, nearly double the percentage that did so last year. "I explain to [the students] it's like taking another course, and paying to take that course," says Middlebury's executive director of career services, Jaye Roseborough. (See indicators that the economy is getting better.)

    Experts say more college grads may seek employment in fields that require comparatively little education. "Even if you're surviving by being a coffee barista, it's still better than just staying home," says Koc. "With the job market as difficult as it is, I don't think that students have much of a choice." (See the top 10 financial-crisis buzzwords.)

    Still, serving lattes for minimum wage plus tips is a painful prospect to the average college student, who graduates with $21,000 in the red. Tuition costs could also explain why graduate schools, traditionally a refuge in tough economic times, have seen uneven application numbers this year. Lance Choy, director of the career development center at Stanford, notes that grad schools were a popular backup a few years ago during the dotcom bust, but applications are flat this year. "Who needs more debt when the job market is looking rather grim?" he says. (Read "Finding a Dream Job: A Little Chaos Theory Helps.")

    Meanwhile, schools are pulling out the stops to help students beat out the competition. Counselors everywhere are encouraging students to turn to their alumni networks for help. The University of Maryland has conducted workshops with an emphasis on networking. The career office shared by Haverford and Bryn Mawr recently gave each senior 50 business cards listing their name and major. (See what businesses are doing well despite the recession.)

    For students who have already managed to snag an offer, they might want to keep their business cards handy. According to NACE, as many as 8% of employers will be forced to rescind at least some of the offers they made in the fall. "In this economy, we don't even use the terminology 'sewn up' anymore," says Roseborough. More like coming apart at the seams.

    House Approves Mortgage Bankruptcy Overhaul

    House approves mortgage bankruptcy overhaul

    By Kevin Drawbaugh

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    Bankruptcy judges could cut the mortgage debt of homeowners in bankruptcy court as a last resort to avert foreclosure, under a bill approved by a 234-191 vote on Thursday in the U.S. House of Representatives.

    Seen by Democratic supporters as vital to stabilizing the crumbling U.S. real estate market, the so-called "cramdown" bill has been opposed by bankers, despite amendments made this week to limit its scope, including one restricting it to existing primary residence mortgages, not future loans.

    The Senate was expected to consider its own version of the House bill soon, but chances of passage are uncertain there.

    The House bill has additional provisions meant to help homeowners in the worst housing market in decades, a slump that has helped pull the U.S. economy into a deepening recession.

    Under present law, bankruptcy courts may reduce many forms of debt for struggling borrowers -- including a boat, car, vacation home or family farm -- but not a primary residence.

    Changing bankruptcy law to allow this, say bankers and Republican opponents of the bill, would raise costs for everyone by diverting capital from the mortgage debt market.

    But Democrats backing the bill discount such fears and say it could sharply cut the high U.S. home foreclosure rate.

    About one in eight U.S. homeowners with mortgages, a record share, ended 2008 behind on payments or are in the foreclosure process, a mortgage industry group reported on Thursday.

    President Barack Obama on Wednesday launched a $75 billion foreclosure relief plan, part of a $275 billion housing stimulus program announced last month.


    Meant to dovetail with that program, the House bill also contains a provision that would give mortgage service firms legal protection if they try to revise distressed loans.

    Mortgage servicers collect the monthly payments made by homeowners. Servicers are now often hamstrung by legal agreements with mortgage-backed securities investors that can force servicers to foreclose on delinquent borrowers.

    The "safe harbor" provision in the bill would shield servicers from legal action by mortgage-backed securities investors whose returns could be crimped by eased loan terms.

    House Republican Leader John Boehner criticized the bill.

    "When it comes to housing, today is another example of why taxpayers are fed up with the way Washington works," he said. "The American people are sick and tired of Washington forcing taxpayers to pay for those who have been irresponsible."

    But Michael Calhoun, president of the Center for Responsible Lending, a homeowner advocacy group, praised the House's passage of the bill.

    "Hundreds of thousands of families have lost their homes unnecessarily and tens of millions of neighboring families have watched the value of their homes plummet. We urge the Senate to act quickly to approve this bill and put it on President Obama's desk for his signature," Calhoun said.

    The bill would also overhaul the under-performing Hope for Homeowners program, an effort to help struggling mortgage borrowers drawn up last year by Congress that attracted little interest due to its high cost and complexity.

    In addition, federal deposit insurance coverage would rise permanently to $250,000 from $100,000 and the Federal Deposit Insurance Corp's credit line with the Treasury Department would rise to $100 billion from $30 billion, under the bill.

    Tens of Thousands of Troops Have Traumatic Brain Injury, Officials Say

    Tens of thousands have TBI, officials say

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    As Army officials announced the beginning of Brain Injury Awareness Month, they offered up a figure that makes it hard to believe anyone in the military could be unaware of the problem:

    Between 45,000 and 90,000 troops have been treated for traumatic brain injury symptoms ranging from headaches to vision problems to an inability to function beyond a coma state.

    Brig. Gen. Loree Sutton, director of the Defense Centers of Excellence for Psychological Health and Traumatic Brain Injury, said between 10 percent and 20 percent of soldiers and Marines — about 180,000 people — have screened positive for TBI.

    Yet military doctors still fight a culture in which some troops believe they can head right back into the fight after being exposed to a blast — even though high school football players know better than to play again for a few days — and commanders may decide to risk sending someone outside the wire after an injury because there aren’t enough people to make up a patrol team.

    Experts at the U.S. Military Academy have said it’s important for someone who has suffered even mild TBI to avoid the risk of re-injuring the brain — especially the not-yet-fully-grown brain of someone younger than 24 — because a second injury can lead to permanent damage or even death.

    Declaring March as Brain Injury Awareness Month serves as a reminder to troops to watch out for themselves and each other. A brain injury results from a blow to the head or from the waves of a blast from an explosive device. Any altered state — passing out for a few seconds or minutes, dizziness or a foggy memory — constitutes an injury, and they range from mild, or a concussion, to severe.

    Symptoms that can last hours, days or years include loss of balance, short-term memory loss, vision problems, tinnitus or ringing in the ears, headaches, seizures, irritability, sleep problems, or an inability to concentrate.

    Sutton said the symptoms usually go away on their own, especially if troops “allow themselves to get the rest that they need.”

    If the problems don’t go away, doctors can treat the symptoms with medications and therapy.

    Sutton stressed that 80 percent to 85 percent of TBIs are categorized as “mild,” but even mild TBI can cause headaches, vision problems and short-term memory loss.

    However, she said people are much more likely to quickly recover from a mild injury. More than half of such injuries come from explosions.

    About half the service members who screen positively for TBI recover on their own, while one-fourth recover with the help of treatment and one-fourth need specialty care.

    Over the past year, Sutton said the military has begun doing a better job of screening service members in the field so exposures to blasts or blows can be recorded and treated.

    The Defense and Veteran’s Brain Injury Center also has increased its network of civilian and military doctors and therapists to come up with better treatments and screening methods. Troops also have begun taking the Automated Neuropsychological Assessment Metric, which gives doctors baseline information on a person’s cognitive skills before an injury occurs.

    The new National Intrepid Center of Excellence, which is expected to open next year in Bethesda, Md., will specialize in TBI and psychological health issues.

    Last year, the Army spent $242 million on care for TBI, according to Lt. Col. Lynn Lowe, chief of the operations branch proponency office for rehabilitation and reintegration in the office of the Army Surgeon General.

    Those with questions about TBI or any psychological health issue can call the Army’s outreach center at (866) 966-1020.

    Obama-linked think tank calls for US “nuclear umbrella” in Middle East

    Obama-linked think tank calls for US “nuclear umbrella” in Middle East

    By Bill Van Auken

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    US Secretary of State Hillary Clinton ratcheted up bellicose US rhetoric against Iran Wednesday, accusing the country of funding "terrorism" and interfering in the internal affairs of states throughout the Middle East. Her statements coincided with the release of a report by a Washington think tank with ties to the Obama administration suggesting that the US should establish a "nuclear umbrella" over the region.

    Clinton made her remarks to reporters while flying to a NATO foreign ministers meeting in Brussels, having just completed her tour of the Middle East. The rhetorical attack was delivered in the context of growing indications that the Obama administration is continuing the essential policy of the Bush White House--seeking to isolate Iran while preparing for a possible military confrontation.

    Making it clear that the question of Iran had been central to her talks in Israel, the occupied West Bank and Egypt, Clinton declared, "It is clear that Iran intends to interfere with the internal affairs of all these people and try to continue their efforts to fund terrorism, whether it's Hezbollah or Hamas or other proxies."

    Washington has branded as "foreign terrorist organizations" both Hamas, which is the elected government of the Palestinians in the Gaza Strip, and Hezbollah, which is one of the most powerful political organizations in Lebanon and part of the national unity government, because both have resisted Israeli occupations.

    Turning to the focus of Washington's confrontation with Iran, Clinton accused Iran of pursuing nuclear weapons and defended the US plan to deploy a missile defense system on the soil of Poland and the Czech Republic as a necessary response to a supposed Iranian threat.

    Russia has charged that the shield is directed at neutralizing its own nuclear force, giving the US impunity in waging a preemptive nuclear war. For its part, the Iranian government has insisted that is nuclear power program is for peaceful purposes only.

    Clinton claimed that the Eastern European regimes and Washington were united in confronting a perceived Iranian threat. "Missiles not only with a nuclear warhead, but a conventional warhead, or some other chemical, biological weapon, could very well be in the hands of a regime like Iran's, which we know will use whatever advantage they have to intimidate as far as they think their voice can reach," she said.

    She was questioned on the shield because of a reported secret letter sent last month by President Barack Obama to his Russian counterpart, Dmitry Medvedev, suggesting that if Moscow collaborated with Washington in suppressing the supposed Iranian nuclear threat, the US would consider scrapping the proposed missile shield installations in Eastern Europe. After accounts of the letter appeared in the media, both Obama and Medvedev denied that it offered a direct "quid pro quo" deal.

    In another diplomatic initiative, Clinton announced the dispatch of American envoys to Damascus in a bid to revive US-Syrian diplomatic relations. The move is seen as a bid to drive a wedge between Syria and Iran. This was made explicit by Senator John Kerry, the Democratic chairman of the Senate Foreign Relations Committee, who recently visited Syria. Supporting the opening of ties with Syria and loosening of sanctions, Kerry insisted in a speech Wednesday at the Brookings Institution that "Syria's long-term interests lie not with Iran but with its Sunni neighbors and the West."

    In the midst of these diplomatic maneuvers against Iran, a Washington think tank with close ties to the Obama administration issued a report [here in pdf format] Wednesday advocating the extension of a Cold War-style "nuclear umbrella" over the Middle East, and warning that Israel is seriously considering unilateral military action against the Iranian nuclear program.

    The report issued by the Washington Institute on Near East Policy (WINEP), a pro-Israeli think tank, was billed as the work of a "Presidential Task Force" and was titled, "Preventing a cascade of instability: US engagement to check Iranian nuclear progress."

    The 15-member panel that prepared the document included former State Department and National Security Council officials, members of Congress and the former chief of the US Strategic Command.

    Also listed as having endorsed an earlier draft of the report was Dennis Ross, who worked at WINEP for seven years before being recently appointed as the Obama administration's special envoy for the Persian Gulf.

    The report frames the US confrontation with Iran over the nuclear question as part of a broader struggle for American hegemony throughout the region, including the ongoing wars in Iraq and Afghanistan. By taking strong measures against Iran, it argues, Washington can strengthen its position throughout the Middle East. "Vigorous steps to shore up regional stability could check unfounded perceptions by some that the US star is waning," the report states.

    Clearly suggesting that the conflict has been deliberately sought as a means of furthering key strategic objectives, the authors write, "Confronting the Iran nuclear program also offers opportunities to advance US interests... to deepen US relationships with its Middle East friends."

    Further on, the report presents a proposal that would not only "deepen US relations" with various countries in the Middle East, but place them under the direct protection of Washington's nuclear arsenal.

    "One issue needing much more thought is how a US nuclear guarantee (or ‘umbrella') would work and whether it is appropriate in the Middle East. Many in the Gulf seem to think that the region already benefits from a de facto US guarantee; they may welcome its formalization."

    During the course of the 2008 election campaign, then-Democratic Party presidential hopeful Hillary Clinton declared her support for just such an umbrella, vowing that as president she would "obliterate" Iran in the event it attacked Israel.

    "An attack on Israel," she said in a Democratic candidates' debate last April, "would trigger massive retaliation. But so would an attack on those countries [she mentioned by name the monarchies of Saudi Arabia, the UAE, and Kuwait] that are willing to go under the security umbrella and forswear their own nuclear ambitions."

    The WINEP report notes, "The Cold War experience suggests that deployments of weapons and troops are often necessary to make pledges [of deterrence] credible." It likewise indicates that such a nuclear umbrella should be formalized through a congressionally approved treaty.

    Obviously, such proposals encompass far more than the US confrontation with Iran. They would have the effect of turning the other oil-rich countries of the Persian Gulf and much of the Middle East into a declared American military protectorate. Such an arrangement would have far-reaching strategic implications, above all in the conflict between American imperialism and its rivals in Europe and Asia for control of markets and resources under conditions of the deepening global slump.

    The report indicates that the Obama administration's declared openness to negotiations with Iran is aimed in large part at preparing the groundwork for possible military action. "Restoring confidence in US willingness to make extraordinary efforts to resolve the standoff with Iran is important in the event that Washington, after careful consideration of the advantages and disadvantages of any course of action, opts for other policy instruments to prevent Iran's development of a nuclear weapon," it declares.

    Other proposals floated in the report include a call for the tightening of sanctions against Iran and extending Washington's current efforts to intimidate financial institutions and industrial firms from doing business with Iran. In particular, it calls for pressure aimed at preventing the construction of oil refineries in Iran in an attempt to exploit the country's shortage of gasoline.

    The report also warns that the Israeli government is considering a unilateral attack on Iran's nuclear program and sees its window of opportunity closing.

    "Whatever Americans may think, Israeli leaders seem convinced that at least for now they have a military option," it states. However, they "see the option fading over the next one to two years" both because of Iranian progress in its nuclear project and the pending shipment of more advanced Russian S-300 surface-to-air missiles to Teheran. "Israel therefore may feel compelled to act before the option disappears," the report warns, adding that the US could "pay a high price" for such a strike.

    One of the report's recommendations, however, is that in response to Russia supplying S-300 missiles, which Moscow has portrayed as a stabilizing action, dissuading Israeli aggression, Washington should "promptly provide Israel with the capabilities to continue to threaten high-value Iranian targets--for instance, with more modern aircraft."

    The report, whose authors include Obama's top advisor on the region, makes it clear that the new administration is not only continuing the occupation of Iraq and escalating the war in Afghanistan, but preparing for a new and potentially far more catastrophic military confrontation with Iran.