Sunday, March 29, 2009

Obama holds "very pleasant" meeting with top US bankers

Obama holds “very pleasant” meeting with top US bankers

By Joe Kishore

Go To Original

US President Barack Obama met behind closed doors for more than an hour and a half with the chief executives of the largest American banks on Friday, reassuring the titans of finance that his administration has their best interests at heart.

According to White House press secretary Robert Gibbs, the meeting's agenda included the Obama administration's "toxic asset" purchase program, proposals for regulation of the finance industry, and executive compensation.

Every aspect of the administration's economic policy caters to the interests of the financial elite, of which the president is merely a mouthpiece. The private meeting at the White House had the air of a conspiracy against the public, a gathering to discuss carving up state resources in order to hand them over to the banks and major investors.

Among those attending were 13 CEOs and two banking industry lobbyists. The individuals gathered at the White House stand at the helm of companies that together control much of American finance. They played a significant role in driving the speculative orgy on Wall Street that has now collapsed, precipitating the greatest economic crisis since the Great Depression.

While no transcript of the discussions has been released (nor will there be), the bankers emerged very pleased. Their post-meeting comments included:

* Ken Lewis, CEO of Bank of America: "We're just in this together. There's still some hard work to do, but a pleasant meeting." On executive bonuses, Lewis added, "I got the impression, both from [Obama] and from some of the things that are going on behind the scenes that cooler heads will prevail and nothing will be done that is that punitive."

* Vikram Pandit of Citigroup: "We all have a common goal for building momentum for a recovery. It was good constructive meeting with a lot of open dialogue."

* Jamie Dimon of JPMorgan: On the question of AIG bonuses, Obama "is very clear that he is not against wealth.... I think he would like to see an awful lot of self-restraint," as opposed to government regulation.

* Robert Kelly of New York Mellon Corp, on the toxic asset program detailed by Treasury Secretary Tim Geithner earlier this week: "We don't know all the details...but we think it's a really encouraging first step to get the plan out there.... I think there's going to be a lot of interest in it.... I think that we are very much aligned with the administration."

* John Koskinen of Freddie Mac: "No one in that room gave any indication at all that they were anything other than enthusiastic about supporting the president and this program."

* John Mack of Morgan Stanley: "There was no tension. It was all about cooperation...It was all about getting the economy going and the banks taking a crucial role in making sure that happens...It was all about working together and was very encouraging."

* Lloyd Blankfein of Goldman Sachs: "Everybody was on the same page, one of cooperation. What we really wanted the president to understand, which of course he does understand, was that we recognize our interests are aligned, that we only do well if the economy does well."

For his part, White House spokesman Robert Gibbs said that Obama was "very pleased" with the outcome and that he hoped to keep the lines of communication open with the bankers.

Top Obama adviser Valerie Jarrett, who participated in the meeting with the bankers, said Thursday, "We're reliant upon them to help rebuild our economy. It would be very unnatural if we didn't engage them and have a direct opportunity to pick their brains and look to the future."

The bankers have every reason to be happy. Over the past week, the Obama administration has enacted or announced a series of measures that are tailored to serve the interests of this financial oligarchy.

Obama's fraternal dialogue with the Wall Street bankers comes as Congress is preparing to ditch any moves to tax bonuses. Following a wave of popular outrage, the US House of Representatives passed a bill March 19 that would tax bonuses to executives at AIG and other companies receiving significant government aid by 90 percent. Wall Street bankers, detecting a threat to their personal bank accounts, responded with fury, in public and behind the scenes.

Obama has now indicated his opposition to the House plan, and the issue is quickly being sidelined. Democratic House Majority Leader Steny Hoyer said on Wednesday that if more AIG executives returned their bonuses, then the legislation "might not be necessary." Senate Majority Leader Harry Reid has said that the Senate will not take up any legislation until at least late April, giving Congress plenty of time to water it down or ditch it altogether.

On Monday, Geithner—who also participated in the meeting with the bankers—released details of the White House plan for toxic assets. The plan will amount to a massive government subsidy for private investors to buy up the worthless assets on the balance sheets of the banks. The investors will fund these purchases with cheap government loans, will be guaranteed against losses, and will benefit from any profits. The plan will benefit everyone who matters, namely the bankers and the hedge funds.

This is only the latest—and by no means the last—of the bank bailout schemes initiated by the Bush administration and continued under Obama. Before it is all over, upwards of $10 trillion will be handed over to these institutions.

On Tuesday, during his prime time press conference, Obama insisted, "The rest of us can't afford to demonize every investor or entrepreneur who seeks to make a profit. That drive is what has always fueled our prosperity, and it is what will ultimately get these banks lending and our economy moving once more."

As the administration works with Wall Street to make the banks—and the personal portfolios of the bankers—whole, Obama is preparing a massive attack on the working class. During his press conference, the president repeatedly stressed his determination to tackle "high health care costs" and implement "Entitlement reform"—i.e., cuts in Social Security, Medicare and Medicaid.

As the question of restrictions on executive bonuses is dropped, Obama repeated on Thursday his insistence that any aid to the auto industry be conditioned on further job and wage cuts from autoworkers. In an online town hall meeting, the president said that the auto industry will have to "make some pretty drastic changes. And some of those are still going to be painful."

The policy of the administration is to ensure that this "pain" is born entirely by the working class, while the looting of public assets by the financial elite continues.

Obama announces escalation of war in Afghanistan, Pakistan

Obama announces escalation of war in Afghanistan, Pakistan

By Alex Lantier

Go To Original

President Barack Obama on Friday announced a major escalation of the US war in Afghanistan and its further extension into Pakistan.

His statement was presented as the outcome of a review of US strategy in Afghanistan and Pakistan involving the State Department, the Pentagon and US intelligence agencies, all of whose top officials were on the platform behind Obama when he gave his remarks.

The policy Obama announced represents a massive increase in military violence not only in Afghanistan, but also in Pakistan. Significantly, Obama devoted the first half of his remarks to Pakistan, signaling that a major conclusion of his administration's strategic review is to expand the war more aggressively beyond the borders of Afghanistan.

This will mean the deaths of untold thousands Afghans and Pakistanis, the expenditure of hundreds of billions of dollars, and the deaths of thousands of US youth, sent to kill or be killed in a wider war in South and Central Asia.

Obama acknowledged that the US military and security position in Afghanistan is dire. "The situation is increasingly perilous," he said. "It's been more than seven years since the Taliban was removed from power, yet war rages on, and insurgents control parts of Afghanistan and Pakistan. Attacks against our troops, our NATO allies and the Afghan government have risen steadily. And, most painfully, 2008 was the deadliest year of the war for American forces."

He continued: "Afghanistan has an elected government, but it is undermined by corruption and has difficulty delivering basic services to the people. The economy is undercut by a booming narcotics trade that encourages criminality and funds insurgency."

Obama outlined plans for Afghanistan and Pakistan that echoed the Bush administration's military "surge" in Iraq. Bush used a combination of bribes and military violence to buy a temporary peace with various militia leaders, while directing US reinforcements to slaughter Iraqis who continued to oppose the US colonial-style occupation.

Obama explained, "In Iraq, we had success in reaching out to former adversaries and targeting Al Qaeda in Iraq. We must pursue a similar process in Afghanistan."

On top of the 17,000 additional US troops Obama has already deployed to Afghanistan, he announced plans to send 4,000 more, ostensibly to train Afghan recruits. The aim, he said, was to raise the trained strength of the Afghan army to 134,000 and the police to 82,000.

He called Pakistan, Afghanistan's larger southern neighbor and a US ally, a "safe haven" for Al Qaeda operatives and Taliban fighters, claiming that the Pakistani territories bordering Afghanistan constituted "the most dangerous place in the world" for the American people.

He implied that Pakistan had failed to undertake the large-scale military effort to destroy these forces demanded by Washington, and that the US would no longer tolerate the situation: "After years of mixed results, we will not and cannot provide a blank check. Pakistan must demonstrate its commitment to rooting out Al Qaeda and the violent extremists within its borders. We will insist that action be taken, one way or another, when we have intelligence about high-level terrorist targets."

Along with the "stick" of military threats, Obama offered a "carrot" to the Pakistani regime, calling for the US Congress to authorize $1.5 billion per year for the next five years to build roads and social infrastructure in the country. He described these funds as a "down payment on our own future," while insisting that "Pakistan's government must be a stronger partner in destroying these safe havens."

The essential continuity between the policies of Obama and Bush was visually symbolized by the individuals who flanked Obama on the platform as be made his statement. On one side was Robert Gates, chosen by Obama to stay on as defense secretary after serving as Bush's Pentagon chief and overseeing the military surge in Iraq, and Secretary of State Hillary Clinton, against whom Obama ran in the 2008 Democratic primaries. At the time, Obama appealed to popular anti-war sentiment against Clinton, criticizing her for her 2002 Senate vote giving the Bush administration authorization to invade Iraq.

Obama also noted the presence of, and thanked several other holdovers from the Bush administration, including Gen. David Petraeus, Bush's commander in Iraq in 2007-2008, who, since fall 2008, has directed the US Central Command and Gen. Karl Eikenberry, former corps commander in Afghanistan who has been named by Obama as US ambassador to Kabul.

Obama stressed that the planned reduction of US troops in Iraq would make it possible to expand the US military effort in Afghanistan and Pakistan. (Obama has made a point of linking the two countries in all of his statements on the war, in part to condition US public opinion for an extension of military action to Pakistan). In fact, well before the 2008 election, a policy of drawing down US troop levels in Iraq in order to escalate the war in Central Asia had become the consensus policy of the US military and political establishment, and had been embraced by Bush. In any event, Obama has made clear that he intends to keep tens of thousands of US troops in Iraq for at least several years.

Obama's Republican opponent in the 2008 election, Senator John McCain, warmly praised Obama's announcement on Afghanistan and Pakistan.

The justifications Obama gave for his policy were recycled wholesale from those of the Bush administration. While he did not use the phrase "war on terror," Obama based his escalation of the US war in Central Asia on the same pretexts employed by Bush, citing the 9/11 attacks and claiming that the expansion of US military violence and its extension into Pakistan were necessary to protect the American people against a new terrorist attack by Al Qaeda and other "extremists" based in Afghanistan and Pakistan.

Obama said the US "did not choose to fight" in Afghanistan and that its goal was not "to control that country or dictate its future." He asserted that the role of the region's terrorists in the September 11, 2001 attacks meant that they were a "common enemy" of the US, Afghanistan, and Pakistan. Obama went so far as to assert that the "greatest threat" to the future of Pakistan is Al Qaeda and its "extremist allies."

Each and every one of these claims is a lie. Far from being a reluctant and altruistic participant in the political life of Afghanistan and Pakistan, the American ruling elite has pursued an aggressive and ruthless policy in these unfortunate countries for over 30 years, in the pursuit of its own imperialist interests.

In 1979, the Carter administration worked to provoke a Soviet invasion of Afghanistan, aiming to trap the USSR in a bloody, Vietnam-like quagmire. That this was official US policy was revealed by Defense Secretary Gates—who was on the National Security Council staff, then director of the CIA's Strategic Evaluation Center at the time—in his 1996 book From the Shadows. Through Pakistan, the US aggressively armed the anti-Soviet resistance, which was led by a class of local warlords who funded their activities largely through the cultivation and sale of opium. This led to an explosion of Afghanistan's narcotics industry.

Far from being a "common enemy" of the US and Pakistani ruling elites, the Taliban were among their main proxies in Afghanistan after the 1992 collapse of the Soviet-backed Afghan regime.

As the US now adopts an increasingly harsh line towards Pakistan, the press is breaking its silence on this topic. The New York Times recently wrote: "The ISI [Pakistani military intelligence] helped create and nurture the Taliban movement in the 1990s to bring stability to a nation that had been devastated by years of civil war between rival warlords, and one Pakistani official explained that Islamabad needed to use groups like the Taliban as ‘proxy forces to preserve our interests.'"

The Times decided not to mention that the US backed these efforts at the time, aiming to use the Taliban to unify and pacify Afghanistan. Had the Taliban succeeded in this attempt, Washington and the US energy firm Unocal hoped to run oil and natural gas pipelines from Central Asia through Afghanistan to Pakistan, India, and Indian Ocean ports.

The real motive behind the US invasion of Afghanistan in 2001 was the drive for US hegemony in oil- and natural gas-rich Central Asia, through which it would gain strategic advantage over its global competitors.

Afghanistan and Pakistan stand at a nexus of pipeline and trade routes between the Middle East, Russia, China and the Indian subcontinent, and US domination of the countries would give it decisive influence over developments in trade and strategic relations between many of Eurasia's largest and fastest-growing economies. In particular, it would cement the US' ability to mount a blockade of oil supplies for China and India in the Indian Ocean.

Fundamental US aims have not changed since Washington's 2001 invasion of Afghanistan and the subsequent extension of fighting into Pakistan. The US ruling class' drive to assert dominance over its rivals will, in fact, only increase as the world plunges into the most serious economic crisis since the Great Depression.

The hundreds of thousands of people killed and the millions wounded and displaced by the US occupations of Iraq and Afghanistan give the lie to Obama's claim that terrorists are the most dangerous enemy of the Pakistani and Afghan people. In fact, the greatest threat to the Central Asian masses is the militarist clique in Washington that remains in power, unaffected by the transition from Bush to Obama. As for the American people, Obama and his handlers view its anti-war sentiments and democratic instincts with nothing but contempt.

With the escalation of US military operations in Afghanistan and Pakistan, Obama is heading towards broader, far more devastating wars that will ultimately involve major world powers.

The implications of this expanded war policy are incalculable. Pakistan, which is being destabilized by US policy, is a nuclear-armed country of 130 million people. A March 26 report by the Wall Street Journal noted that US drones were now targeting "Pakistani Taliban" leader Baitullah Mehsud, who is not involved in attacks on US and NATO forces across the border in Afghanistan, but is considered by the Pakistani regime to be a major threat, and that Washington is considering widening its missile attacks to include the Pakistani province of Baluchistan. Such attacks risk plunging Pakistan into civil war, and ultimately a full-scale US invasion.

The decision to send more US troops to Afghanistan will not only inflame the war in that country, but destabilize the broader region and intensify tensions with other countries, in the first instance, Russia. With the US' main supply lines to Afghanistan running through regions of Pakistan that are being turned into war zones, Washington will increasingly consider alternate supply routes, notably through the Caucasus and former Soviet republics in Central Asia. Last August, US competition with Russia for influence in the Caucasus saw the US encourage Georgia to attack Russian monitors in South Ossetia.

China will also see mounting US military intervention in Pakistan as a hostile policy. Pakistan is an important trading partner and strategic ally of China against India. Escalating the war will also fuel tensions between Washington and European countries which are under increasing US pressure to contribute more troops to NATO operations in Afghanistan, and whose populations overwhelmingly oppose these deployments.

Obama's announcement of wider war in Central Asia underscores the cynical and fraudulent character of his presidential campaign and the fundamental agreement, whatever their tactical differences, between the Democratic and Republican parties in support of the predatory aims of US imperialism around the world. Having presented himself as the agent of "change," Obama is now presiding over an expansion of imperialist aggression that will have incalculable consequences.

Friday's announcement is the clearest demonstration of a basic political fact: War cannot be opposed through the Democratic Party or appeals to Congress, but only through the independent political mobilization of the American and international working class.

Unemployment hits double digits in seven states

Unemployment hits double digits in seven states

By Barry Grey

Go To Original

Three more states in the US recorded jobless rates of more than 10 percent in February, bringing the total thus far to seven, according to data released Friday by the Labor Department.

Nevada (10.1 percent), North Carolina (10.7 percent) and Oregon (10.8 percent) last month joined the four other states that had previously soared above 10 percent. Michigan, at 12 percent, remained the state with the highest unemployment rate, followed by South Carolina at 11 percent and Oregon at 10.8 percent. California (10.5 percent) and Rhode Island (10.5 percent) are the other states with double-digit unemployment.

The new data on state jobless levels followed the Labor Department's report on initial jobless claims for the past week, released Thursday, which showed a higher-than-expected increase to a seasonally adjusted figure of 652,000, up from the previous week's figure of 644,000. The total number of people claiming benefits for more than a week jumped 122,000 to 5.56 million, exceeding analysts' projections of 5.48 million and marking the highest level since records began in 1967. The level of continuing jobless claims set a record for the ninth consecutive week.

These statistics, along with a rash of new corporate layoff announcements across the economic spectrum, reflect the continuing plunge of the economy toward full-scale depression, even as Wall Street celebrates the biggest three-week gain in the Dow Jones Industrial Average since 1982 and the Obama administration pumps trillions of additional dollars into the banks and hails supposed signs of economic improvement.

Economists expect that the official unemployment figure for March, to be released next week, will show that the US economy lost more than 600,000 jobs for a fourth straight month. The jobless rate is expected to jump from 8.1 percent to a 25-year high of 8.5 percent, according to the median estimate of economists surveyed by Bloomberg News.

Since the recession began in December 2007, the economy has lost 4.4 million jobs, already more than the 3.5 million jobs President Barack Obama is pledging to save or create with his $787 billion stimulus program. Economists at Merrill Lynch in New York and Wachovia in Charlotte, North Carolina, are among those projecting joblessness nationwide will surpass 10 percent.

Forty-nine states and the District of Columbia registered increases in the unemployment rate last month. Nebraska was the only state to post a decrease after the rate increased sharply the prior month.

Payroll employment in February decreased in 49 states and the District of Columbia, led by California's loss of 116,000 jobs. Florida had the second biggest drop with 49,500, followed by 46,100 in Texas, 41,600 in Pennsylvania and 37,200 in Illinois.

The jobless rates in North Carolina, at 10.7 percent, and Rhode Island, at 10.5 percent, were the highest for those states since records began in 1976. Georgia, at 9.3 percent, also set a new high mark.

"We so seldom see an economy down so broadly," Steve Cochrane, a senior economist at Moody's in West Chester, Pennsylvania, told Bloomberg News on Friday. "The impact from the downturn in manufacturing is heading south from the Midwest. Job losses have broadened out across all industries because of the credit crunch, the lack of consumer confidence and the global slump."

New Jersey's unemployment rate jumped to 8.2 percent in February, from 7.3 percent in January. There are now more unemployed people in New Jersey than at any time since the state began keeping records in 1976. New Jersey lost more than 30,000 jobs in the first two months of 2009, including almost 20,000 in February. The state's unemployment rate has risen for 13 consecutive months. Its 12-month increase in unemployment was the biggest ever.

New York City's unemployment rate rose in February by the biggest amount in a single month in history, the state Labor Department reported Thursday. The city's jobless rate matched the national rate of 8.1 percent and reflected an unprecedented one-year rise from 4.4 percent a year earlier. All told, there were about 335,000 unemployed people in the city. This is almost double the 175,000 city residents who were unemployed a year ago.

The city lost about 3,600 jobs in February. It has been devastated by a combined loss of more than 40,000 jobs in finance and business services over the past year, along with mounting layoffs in tourism and retail trade.

Major US job cuts were announced over the past week in the fields of public employment, computers and high-tech, auto, entertainment and tourism, retail trade, and newspapers.

* The United States Postal Service announced it will slash its management staff by 15 percent, with more than 14,000 processing, supervisory and management posts being eliminated. It also said it will close facilities in six states and offer early retirement to 150,000 workers.

* The Boston School Committee this week approved a budget for next year that could lead to the loss of more than 500 positions, including more than 200 teachers and classroom aides.

* Some 7,500 union workers have accepted buyouts and early retirement packages, General Motors announced Thursday. Most of these workers will be gone by April 1, in some cases to be replaced by new-hires at half the pay. GM plans to cut 47,000 workers worldwide by the end of this year, as part of the "viability plan" it is negotiating with the Obama administration in return for government loans.

Earlier this week, GM began telling white-collar workers they would be laid off April 1. GM's plans call for 3,400 US salaried jobs to be cut by May 1.

* Wisconsin-based auto supplier Johnson Controls said Friday it will close 10 plants. The company did not identify the factories to be shut or give a figure for the resulting job cuts.

* Autoliv, the world's largest maker of seatbelts and airbags, said earlier this week it cut 3,000 more jobs in the first two months of 2009.

* IBM will eliminate as many as 5,000 positions in the US, according to internal documents revealed by the press on Thursday. Over 600 information technology specialists at IBM's Global Business Services unit were discharged Thursday. IBM cut more than 4,000 jobs earlier this year.

* Agilent Technologies said Thursday it plans to lay off 2,700 workers from its electronics-testing and measurement-equipment business in response to a sharp decline in demand. This will be the third round of layoffs at the company since December.

* Hundreds of Walt Disney World employees were handed pink slips and escorted off the property on March 26. The layoffs involve 400 to 800 people, according to press reports.

* Wal-Mart announced that it is laying off 650 employees as it closes a central Ohio facility that processes eyewear for Wal-Mart's in-store vision centers. This is the retail giant's third layoff announcement in the last month and a half.

* The New York Times and the Washington Post both announced job-cutting programs. The Times Co. said Thursday it eliminated 100 positions and will cut non-union salaries companywide by as much as 5 percent.

The Post is seeking an unspecified number of voluntary buyouts. It is also closing a printing plant in College Park, Maryland.

Jobless Rate Exceeds 10% in Three More U.S. States

Jobless Rate Exceeds 10% in Three More U.S. States

Go To Original

The number of U.S. states with a jobless rate exceeding 10 percent almost doubled in February as the worst employment slump in the postwar era spread.

Nevada, North Carolina and Oregon last month joined the four other states that had previously climbed above 10 percent, according to Labor Department data released today in Washington. Michigan, at 12 percent, remained the state with the highest unemployment rate, followed by South Carolina at 11 percent and Oregon at 10.8. California and Rhode Island bring the total number of states to seven.

Job losses have spread from areas battered by the housing recession and auto slump to states like the Carolinas where non- auto manufacturers and service companies are cutting staff. Economists at Merrill Lynch & Co. in New York and Wachovia Corp. in Charlotte, North Carolina, are among those projecting joblessness nationwide will surpass 10 percent.

“We so seldom see an economy down so broadly,” said Steve Cochrane, a senior economist at Moody’s in West Chester, Pennsylvania. ‘The impact from the downturn in manufacturing is heading south from the Midwest. Job losses have broadened out across all industries because of the credit crunch, the lack of consumer confidence and the global slump.”

Forty-nine states and the District of Columbia registered increases in the unemployment rate last month, led by Oregon, North Carolina and New Jersey, the Labor Department said. Nebraska was the only state to post a decrease after the rate jumped the prior month.

Housing Slump

The states where home prices surged and then crashed remain among the hardest hit, including Nevada, with its 10.1 percent joblessness. Nicole Wolf, 39, was working for Harrah’s Entertainment Inc. in Las Vegas for the human resources department until this month when she was laid off from her job that paid $94,000 a year.

With her home worth less than her mortgage, and paying $800 a month to cover student loans, Wolf is trying to find a job in marketing or communications before her severance pay runs out.

“I’m assuming I’ll have a job or declare bankruptcy,” Wolf said in a telephone interview.

The outlook for finding work this month hasn’t improved. The world’s largest economy probably lost more than 600,000 jobs in March for a fourth straight month, and the jobless rate jumped to a 25-year high of 8.5 percent, according to the median estimate of economists surveyed by Bloomberg News before next week’s report from Labor.

Bernanke on Unemployment

Federal Reserve Chairman Ben S. Bernanke said in Washington March 10 that it was “certainly well within the realm of possibility” that unemployment nationwide could rise above 10 percent “for a period.”

With the recession already matching the longest in the postwar period, the jobless and the needy are becoming more evident across the country.

Gabriela Romero, who works for the Fresno County Economic Opportunities Commission, last month organized a food drive in Mendotta, California, a city where four of 10 workers are unemployed, and arrived to find a crush of people seeking assistance.

“It was just a free-for-all,” she said. “You have people waiting in line for hours, pregnant women, disabled people.”

Since the recession began in December 2007, the economy has lost 4.4 million jobs, already more than the 3.5 million jobs President Barack Obama is targeting to save or create with his $787 billion recovery program.

California, Florida

Payroll employment in February decreased in 49 states and the District of Columbia, led by California’s loss of 116,000 jobs. Florida had the second-biggest drop with 49,500 workers dismissed, followed by 46,100 positions cut in Texas, 41,600 in Pennsylvania and 37,200 in Illinois.

Surpassing 10 percent unemployment has a psychological impact and may further curtail spending, said Doug Woodward, a University of South Carolina regional economist in Columbia.

“It’s creating more anxiety and more fear,” he said. “It’s feeding on itself.”

Job losses are spreading from manufacturers such as General Motors Corp., Caterpillar Inc. and International Business Machines Corp. to other firms like lumber producer Weyerhaeuser Co., media companies like the New York Times Co. and even the U.S. Postal Service. They are affecting all income brackets and professions.

Quarter Million

Fred Herrmann, 33, of Minneapolis, lost his job as a mortgage broker making $250,000 a year in December when his company folded. He said he’s applied for 25 finance and sales jobs, each making $14 to $18 an hour plus commission.

“There’s not a whole lot of high-paying jobs,” he said. “When you go from making a quarter of a million a year to 15 bucks an hour, that’s not good.”

On the lower end of the scale, Arthur Bolden, 61, is finding it harder than ever to get a job as a day laborer.

While he used to get $10 an hour, the prevailing wage now is $7 or $8 an hour, he said, as he waited for work outside of a Mecklenburg County, North Carolina, social services building. “People don’t even have money to pay for landscaping or to cut grass.”

The jobless rates in North Carolina, at 10.7 percent, and Rhode Island, at 10.5, were the highest for those states since records began in 1976. Georgia, at 9.3 percent, also set a new high mark.

New US Law To Allow Searching Of PC's, Laptops, And Media Devices

States Rebellion Pending

States Rebellion Pending

Go To Original

Our Colonial ancestors petitioned and pleaded with King George III to get his boot off their necks. He ignored their pleas, and in 1776, they rightfully declared unilateral independence and went to war.

Today it’s the same story except Congress is the one usurping the rights of the people and the states, making King George’s actions look mild in comparison. Our constitutional ignorance—perhaps contempt, coupled with the fact that we’ve become a nation of wimps, sissies and supplicants—has made us easy prey for Washington’s tyrannical forces. But that might be changing a bit. There are rumblings of a long overdue re-emergence of Americans’ characteristic spirit of rebellion.

Eight state legislatures have introduced resolutions declaring state sovereignty under the Ninth and 10th amendments to the U.S. Constitution; they include Arizona, Hawaii, Montana, Michigan, Missouri, New Hampshire, Oklahoma and Washington. There’s speculation that they will be joined by Alaska, Alabama, Arkansas, California, Colorado, Georgia, Idaho, Indiana, Kansas, Nevada, Maine and Pennsylvania.

You might ask, “Isn’t the 10th Amendment that no-good states’ rights amendment that Dixie governors, such as George Wallace and Orval Faubus, used to thwart school desegregation and black civil rights?” That’s the kind of constitutional disrespect and ignorance that big-government proponents, whether they’re liberals or conservatives, want you to have. The reason is that they want Washington to have total control over our lives. The Founders tried to limit that power with the 10th Amendment, which reads: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

New Hampshire’s 10th Amendment resolution typifies others and, in part, reads: “That the several States composing the United States of America, are not united on the principle of unlimited submission to their General (federal) Government; but that, by a compact under the style and title of a Constitution for the United States, and of amendments thereto, they constituted a General Government for special purposes, delegated to that government certain definite powers, reserving, each State to itself, the residuary mass of right to their own self-government; and that whensoever the General Government assumes undelegated powers, its acts are unauthoritative, void, and of no force.” Put simply, these 10th Amendment resolutions insist that the states and their people are the masters and that Congress and the White House are the servants.

Put yet another way, Washington is a creature of the states, not the other way around.

Congress and the White House will laugh off these state resolutions. State legislatures must take measures that put some teeth into their 10th Amendment resolutions. Congress will simply threaten a state, for example, with a cutoff of highway construction funds if it doesn’t obey a congressional mandate, such as those that require seat belt laws or that lower the legal blood-alcohol level to .08 for drivers. States might take a lead explored by Colorado.

In 1994, the Colorado Legislature passed a 10th Amendment resolution and later introduced a bill titled “State Sovereignty Act.” Had the State Sovereignty Act passed both houses of the legislature, it would have required all people liable for any federal tax that’s a component of the highway users fund, such as a gasoline tax, to remit those taxes directly to the Colorado Department of Revenue. The money would have been deposited in an escrow account called the “Federal Tax Fund” and remitted monthly to the IRS, along with a list of payees and respective amounts paid.

If Congress imposed sanctions on Colorado for failure to obey an unconstitutional mandate and penalized the state by withholding funds due, say $5 million for highway construction, the State Sovereignty Act would have prohibited the state treasurer from remitting any funds in the escrow account to the IRS. Instead, Colorado would have imposed a $5 million surcharge on the Federal Tax Fund account to continue the highway construction.

The eight state legislatures that have enacted 10th Amendment resolutions deserve our praise, but their next step is to give them teeth.

Stocks Will Drop; Banks Will Go Belly Up - Roubini

Stocks Will Drop; Banks Will Go Belly Up - Roubini

Go To Original

The stock market will drop as major banks go belly up says Nouriel Roubini, the NYU economist that successfully predicted the current economic collapse. Below is the text from an interview Mr. Roubini gave today on Bloomberg TV.

U.S. stocks will fall and the government will nationalize more banks as the economy contracts through the end of 2009, said Nouriel Roubini, the New York University professor who predicted last year’s economic crisis.

“The stock market is a bit ahead of the real macroeconomic and financial news,” Roubini, a professor at NYU’s Stern School of Business and the chairman of consulting firm Roubini Global Economics, said in an interview with Bloomberg Television in London today. “We’ll have some major banks going belly up that will need to be taken over.”

The global equity rebound in March that sent the Standard & Poor’s 500 Index to its best monthly advance in 17 years is a “bear-market rally” and U.S. Treasury yields will “remain relatively low” as investors flock to the safest assets, Roubini said. Treasury Secretary Timothy Geithner’s new plan to remove toxic debt from financial companies won’t be enough for insolvent banks, he said.

Roubini’s outlook contrasts with predictions this week from Templeton Asset Management Ltd.’s Mark Mobius and Traxis Partners LLC’s Barton Biggs, who said that equities are poised to rally as government efforts to revive the economy and banking system begin to work. Investors are “way too optimistic” about the prospects for a recovery in the economy and earnings, Roubini said.

Stress Tests

The S&P 500 surged 7.1 percent on March 23 after Geithner unveiled a plan to finance as much as $1 trillion in purchases of illiquid real-estate assets, using $75 billion to $100 billion of the Treasury’s remaining bank-rescue funds. The government is conducting stress tests of banks to determine how much more capital each will need.

Roubini, who predicts loan and securities losses in the U.S. will reach $3.6 trillion, said the stress tests will reveal that some banks need to be taken over and have their good and bad assets separated before being sold to the private sector. He didn’t name which companies he thought would need to be rescued.

Critics of Geithner’s plan including Nobel laureate Paul Krugman, a professor at Princeton University, say the government should take over banks loaded with devalued assets, remove their top management, and dispose of the toxic securities. Sweden adopted the temporary nationalization approach in the 1990s.

‘Deflationary Forces’

“Some banks are going to have to be nationalized,” said Roubini. “It’s going to be bumpy ahead of us.”

Geithner and Federal Reserve Chairman Ben S. Bernanke this week called for new powers to take over and wind down failing financial companies. They said the U.S. also needs stronger regulation to constrain the risks taken by firms that could endanger the financial system.

With “deflationary forces” lingering for as long as three years, Roubini said U.S. government bond yields will remain low and American house prices will fall as much as 20 percent in the next 18 months. While the dollar will initially benefit as investors seek a safe haven in the U.S., the currency will ultimately drop as the nation’s trade deficit shrinks, he said.

Roubini dismissed China’s call for the creation of a new international reserve currency as a “pie in the sky idea” that’s unlikely to gain traction any time soon.

China’s central bank Governor Zhou Xiaochuan this week urged the International Monetary Fund to expand the use of so- called Special Drawing Rights and move toward a “super- sovereign reserve currency.” Geithner sent the dollar tumbling yesterday by saying he would consider China’s idea, only to drive it back up by affirming that the greenback should remain the world’s reserve currency.

“This was a political call and in a nut shell - it ain’t going to happen any time soon,” Roubini said.

Mobius, who helps oversee about $20 billion of emerging- market assets as executive chairman at San Mateo, California- based Templeton, said March 23 the next “bull-market” rally has begun. Biggs, the former chief global strategist for Morgan Stanley who now runs New York-based hedge fund Traxis Partners, predicted the same day the S&P 500 may jump between 30 percent and 50 percent.

The benchmark index for U.S. equities has surged 11 percent in March, poised for its biggest monthly gain since 1991. The MSCI Emerging Markets Index of equities in 23 developing nations is headed for the steepest monthly advance on record after rising 20 percent in March.

The Free Market Financial Style, How the Scam Works

The Free Market Financial Style, How the Scam Works


Go To Original

Newspaper reports seem surprised at how high banks are bidding for the junk mortgages that Treasury Secretary Geithner is now bidding for, having mobilized the FDIC and Fed to transfer yet more public funds to the banks. Bank stocks are soaring – thereby bidding up the Dow Jones Industrial Average, as if the “financial industry” really were part of the industrial economy.

Why are the very worst offenders – Bank of America (now owner of the Countrywide crooks) and Citibank the largest buyers? As the worst abusers and packagers of CDOs, shouldn’t they be in the best position to see how worthless their junk mortgages are?

That turns out to be the key! Obviously, the government has failed to protect itself – deliberately, intentionally failed to do so – in order to let the banks pull off the following scam.

Suppose a bank is sitting on a $10 million package of collateralized debt obligations (CDOs) that was put together by, say, Countrywide out of junk mortgages. Given the high proportion of fraud (and a recent Fitch study found that every package it examined was rife with financial fraud), this package may be worth at most only $2 million as defaults loom on Alt-A “liars’ loan” mortgages and subprime mortgages where the mortgage brokers also have lied in filling out the forms for hapless borrowers or witting operators taking out mortgages at far more than properties were worth and pocketing the excess.

The bank now offers $3 million to buy back this mortgage. What the hell, the more they bid, the more they get from the government. So why not bid $5 million. (In practice, friendly banks may bid for each other’s junk CDOs.) The government – that is, the hapless FDIC – puts up 85 per cent of $5 million to buy this – namely, $4,250,000. The bank only needs to put up 15 per cent – namely, $750,000.

Here’s the rip-off as I see it. For an outlay of $750,000, the bank rids its books of a mortgage worth $2 million, for which it receives $4,250,000. It gets twice as much as the junk is worth.

The more the banks holding junk mortgages pay for this toxic waste, the more the government will pay as part of its 85 per cent. So the strategy is to overpay, overpay, and overpay. Paying 15 per cent is a small price to pay for getting the government to put in 85 per cent to take the most toxic waste off your books.

The free market at work, financial style.

That's No Angry Mob, It's a Movement

That's No Angry Mob, It's a Movement

Go To Original

A college friend of mine, after much quaffing from the keg, so to speak, would start singing a faux hymn that began, "We are sliding into sin - whee!"

I've thought of his bleary tune from time to time as we all watched our financial institutions slide from thoughtless, wretched excess into calamity, aided and abetted by deregulation and bailouts, dragging the rest of us along on their speed bump-free ride.

You'd think there would be a modicum of contrition but mostly it has been deny, deny, deny combined with shivers of revulsion as an angry citizenry freely expresses its opinion. Former Clinton SEC chairman Arthur Levitt sniffed to The Wall Street Journal this week, "It has reached extremes of incivility that are intolerable," and on Friday the Journal editorially wrung its hands over "political Torquemadas" who would dare to prosecute Wall Street executives.

See here, you people, the seemingly dumfounded elite ask, why all this hollering? Well, it wasn't only those AIG bonuses that had folks mad as hell. For sure, they triggered the outburst last week. But then came an ABC News report that JPMorgan Chase - recipient of 25 billion in bailout bucks, courtesy of taxpayers - was pressing ahead with plans to spend $138 million dollars on two new corporate jets and a place to park them - a state of the art hangar with a "vegetated roof garden." Presumably, bank executives will use the vegetation to hide behind when the mob arrives with tar and feathers.

And speaking of greenery, Wednesday's New York Times reported that last year 25 top hedge fund managers harvested salaries totaling 11.6 billion dollars. That's an awful lot of lettuce in these hungry times, especially when, as the Times calculates, hedge funds have lost an average 18 percent of their value.

By Thursday, Treasury Secretary Geithner was talking tough to Congress. He called for a vast expansion of government authority, promising to crack down on Wall Street's reckless behavior, including the murky markets of hedge funds and derivatives. He proposed "comprehensive reform - not modest repairs at the margin, but new rules of the game."

But veteran Washington journalist William Greider, who has covered government, politics and the economy for four decades, fears that what Geithner and the Obama administration are proposing may not create reform but simply perpetuate more of the same, and even lead to the creation of what he calls "a corporate state… a rather small but very powerful circle of financial institutions... Yes, watched closely by the Federal Reserve and others in government, but also protected by them. And that's a really insidious departure."

He expressed his concern to my colleague Bill Moyers in an interview for the current edition of Bill Moyers Journal on PBS. Greider agrees with most experts that the Geithner plan will end up placing reform in the hands of the Federal Reserve Board.

Twenty years ago, Greider wrote Secrets of the Temple: How the Federal Reserve Runs the Country, still considered the definitive account of the government bank. "One of the attractive qualities about the Fed is that it is this black box of technocratic expertise," he told Moyers. "And it knows things the rest of us don't know. And it's very expert at what it does… But it's a political institution. It makes public decisions for the rest of us. So to pretend that it's above all that is nonsense from the beginning...

"They couldn't stop deregulation," he continued. "In fact, they supported it, because they knew their major constituencies in finance and banking were all very much for it... So to tell them now 'Wouldn't you like to just admit your mistake and put back some of the collateral lending functions into your control?' I don't trust them to do that."

What we ought to be seeking, Greider believes, "is creating a new financial and banking system, of many more, thousands more, smaller, more diverse, regionally dispersed banks and investment firms. The first obligation is to serve the economy and serve society. Not the other way around."

As for President Obama, "I understand his political dilemma. And I sympathize with it. But he's trying to govern by convincing people that we will be able to get the old good times back. And my view is that the good times ain't comin' back. For lots of reasons- including the ecological crisis and global warming and the weakness of our economy. This is the hard part. The sooner the country comes to terms with that, acknowledges it as fact, not just fear, then we can start this great era of reform and revitalizing the country and society."

In his new book, Come Home, America: The Rise and Fall (and Redeeming Promise) of Our Country, William Greider sees the public's anger as good news for the country - "America the Possible," he calls it.

"We're at a break point in our history," he said. "And it's not just the financial system, although that's front and center. It's the deteriorated economy, it's militarism looking out in the world, trying to find the next war. It's a lot of things coming at us, all at once. I believe, on the other side of all of these adversities, we can become a better country.

But to make that happen, Greider thinks, "People at large, I don't care whether they're middle class or upper class or working poor or union, non-union, have to find ways to come together themselves, perhaps in very small groups at first, and talk about their own stuff. Their experiences, their ideas their convictions, their aspirations for the country, themselves, their families, and then broaden out a bit, laterally. And have more people in the discussion. They don't have to become a giant organization, but they have to convince themselves that they're citizens…

"That's kind of the mystery of democracy. People get power if they believe they're entitled to power."

Total Meltdown and Civil Unrest

Total Meltdown and Civil Unrest

Wall Street's Manipulated Stock Market Rally

by Matthias Chang

Go To Original

The numbers that have been bandied about is beyond the comprehension of the average Joe Six-Packs. I cannot even figure out $500 billion, what more $500 trillion. Ninety per cent of government leaders are also unable to figure out the enormity of the global debt sink-hole.

So, I have accepted the fact that 97 per cent of Americans will just accept whatever explanations and excuses thrown at them by President Obama, Fed Bernanke and Treasury Geithner for bailing out the banks and failing to prevent the implosion of the economy by summer of 2009.

Obama inherited the mess created by war criminal Bush, aided and abetted by Alan Greenspan, Bernanke and Geithner, so he can be excused for there is nothing that he can do at this late hour to change the outcome. But the rest should be lynched!

In the last two years, in several articles, I drew your attention to the fraudulent securities that have been peddled by the global banks and how they have caused the present grid-lock in the global financial system. In essence, these securities – MBS, CDOs, CLOs, etc. were all fraudulent papers. Whatever mortgages underlying these papers, were over-valued and now they have shown to be worth at the most 10 to 20 cents on the dollar.

There have been suggestions that if all these papers were to be shredded and the debts written off, the global banks’ balance sheet would be wiped clean of such toxic assets. In the result the economy would restart and the good old days of cheap credit and unrestrained consumption would usher another boom!

This is a fairy tale.

In the old days, when the hoodlums want to kill someone and have him disappear for good, they would tie his legs together and attach the rope to a heavy object or an anchor and throw the poor fellow into the bottom of the lake or sea, never to be seen again. A small weight, say 10 kg is more than enough to drag the body to the bottom!

The current financial system is not unlike the man who has been thrown overboard and being dragged down by the heavy object. The only chance for survival is if the man could somehow loosen the rope and detach the weight from his legs and swim to the surface, if he could hold his breath long enough.

What is this small weight that is dragging the financial system down? And why writing off this particular debt will not save the banks?

Compared to the global derivative market which is valued in the hundreds of trillions, the global stock market by comparison is a midget. But it is this midget that will cause the financial implosion in America and Europe and reverberate across the world.

Let me explain in simple terms.

When the Dow collapsed from the stratospheric high of 14,000 to less than 7,000 recently (though recovered somewhat) and other stock markets also went south in tandem, it was estimated that at the minimum $30 trillion was wiped out.

What are the consequences of such a drastic collapse?

Let me explain in simple terms again.

Take the share price of Citigroup. At the height of the boom, its market capitalization was over $250 billion. Today, it is less than $10 billion.

Let us say that you bought the shares when it was trading at $150. You also borrowed from the bank to purchase the shares. These shares will have to be pledged to the bank as security for the loan. The shares are now trading a few dollars, say $5.

There is just no way that you can repay the loan and or to obtain additional security to “top-up” the value of the security pledged to the bank. Where are you going to get the cash to buy more shares? Shares of other companies that you may own have also collapsed, and their value may not be sufficient to cover the difference. You are dead meat!

The bank is also in deep trouble because there is no way that they can recover the loan from selling the shares, which is worth $5.

There is the added problem that companies, whose shares are traded in the stock exchange, are not worth even at current values because their core business and operations were premised on cheap credit and were therefore highly geared! These companies are in debt to their eyeballs!

They are insolvent, bankrupt!

Try as hard, the Fed and the Treasury will not be able to engineer a stock rally back to 14,000 points. And even if they could, it does not follow that the prices of the shares of specific companies would return to its previous high. In the case of Citigroup back to $200 per share!

There is no way in the next 3 to 5 years for companies whose businesses have collapsed to be able to recover fast enough and to be profitable enough to justify a market value of at least 50 per cent of its previous high. In the case of Citigroup, back up to $100.

That is an example in the financial sector.

In the manufacturing sector, an outfit like General Motors will take at least a decade to recover. Then there are those companies which have out-sourced and or re-located overseas. To restart local production again would take time and vast amount of credit. But would they be competitive, given cheaper cost of production elsewhere?

Corporate America is shutting down.

Stimulus and pump priming will not solve this huge problem.

Millions played at this casino using home equity. Pension funds risked your retirement benefits gambling at this casino and lost. Leveraging, 10, 20 or even 30 times was the norm. There is no money left in the kitty!

Quantity easing or printing money will not solve the problem, because a company’s value and market capitalization can only be enhanced through actual production of goods and services. But the Western economies in the last twenty years were skewed towards consumption and the availability of cheap credit.

Applying common sense, what was missing was the creation of surplus value, which is the result of efficient production, and savings which in turn provide the essential capital for more production and savings.

Nothing illustrates this problem better than the case of a farmer who stops farming because he had so much cheap credit, that he stopped farming. He could now easily purchase all he needed, and earned five times more gambling in the stock market casino than he would earn from farming. He mortgaged his farm to secure the borrowings. He lived and consumed like the rich and famous!

When the casino collapsed, he could not maintain the lifestyle and had to resort to selling heirlooms to survive.

Until and unless the farmer starts farming and pays off his debts, he would not be able to accumulate sufficient capital to resume what was once a profitable business.

In short, the farmer like all the millions of gamblers who have been ensnared by the global casino, are now in the debt trap and being slowly dragged down to the bottom of the lake!

Therefore, pumping hundreds of billions to the banks will not solve the problem.

You can bet your last dollar that when millions are caught in the debt trap and there is no way out, and they see billions been given to the Wall Street fat cats, lynching parties will be the order of the day!

The Count Down has started.

U.S. Expected to Give More Aid to Automakers

U.S. Expected to Give More Money to Automakers

Go To Original

The Obama administration will probably extend more short-term aid to General Motors and Chrysler on Monday, but will impose a strict deadline for bondholders and union workers to make concessions that would help the ailing automakers become viable businesses and avert bankruptcy.

President Obama’s auto task force is expected to say that despite its recommendation of more federal assistance for G.M. and Chrysler, bankruptcy could still be a possibility for either company, according to people close to the discussions.

The task force was in its final stages Friday of determining how to keep the two Detroit companies afloat. Meanwhile, the automakers were negotiating retiree health care costs with the United Automobile Workers union, and their debt burden with bondholders and lenders.

But both immediate and longer-term help will be tied to completing the restructurings that G.M. and Chrysler began after receiving $17.4 billion in federal loans.

The administration is expected to set a short deadline — weeks rather than months — to compel the automakers, their lenders and the U.A.W. to reach agreement.

Both G.M. and Chrysler are close to exhausting the loans they received since December. Without more aid soon, the companies could run out of cash to run their vast operations, which employ about 140,000 workers in the United States.

The Obama administration has concluded that both G.M. and Chrysler still require what the president on Thursday called “drastic” and “painful” actions to fix their businesses.

G.M.’s request for up to $16.6 billion more in federal loans will be treated separately from Chrysler’s request for an additional $5 billion, according to administration officials who asked not to be quoted because the deliberations were continuing.

So far, neither company has satisfied the requirements of the original loan agreements with the Bush administration — in particular, the substitution of company stock for 50 percent of the cost of funding retiree health care and reducing their unsecured debt levels by two-thirds.

Mr. Obama, who has been meeting with his advisers in recent days to reach his decision, is planning a formal announcement on Monday at the White House.

The White House press secretary, Robert Gibbs, said Friday that the president would not only outline a plan to keep the companies operating in the short term, but would address long-term viability as well.

“How do these companies get through the global recession that sees a great decrease in demand for the product?” Mr. Gibbs said. “And how, when we emerge from recession to recovery, how do we have a sustainable path that makes good business decisions not just for one year but for many years?”

Mr. Obama met twice on Thursday with Steven Rattner and Ronald Bloom, the former investment bankers who lead the auto task force, but there are still some remaining issues to be resolved before Monday’s announcement, Mr. Gibbs said. Mr. Obama left Friday for Camp David, the presidential retreat, and will make the final decision on his plan there, Mr. Gibbs said.

The announcement on Monday will usher in a more intensive period of oversight by the government of G.M. and Chrysler, which lost a combined $38 billion in 2008, when United States vehicle sales fell to their lowest level in more than 25 years.

The third Detroit car company, Ford Motor Company, has, so far, not sought direct federal assistance. Ford, which lost more than $14 billion last year, has repeatedly said it had enough cash to finance its own broad restructuring efforts.

Mr. Obama and his top auto advisers have stressed that the administration would do everything in its power to prevent a sudden bankruptcy of the big automakers, which could set off cascading failures throughout the industry’s extensive supply chain and dealer networks.

“We need to preserve a U.S. auto industry,” the president said Thursday in a town hall event conducted over the Internet. “We will provide them with some help.”

But the president’s task force will continue to consider a government-managed bankruptcy as a final resort for both G.M. and Chrysler, according to people familiar with the deliberations.

The threat of bankruptcy is intended to accelerate talks between the troubled automakers and their biggest creditors.

Under the terms of its original loans, G.M. must substitute company stock for half of the $20 billion it owes to a new health care trust for retired union workers and surviving spouses.

G.M. also needs to reduce its $27 billion in unsecured debt by two-thirds. So far, a committee representing some bondholders has balked at an offer estimated at as low as 15 cents on the dollar value of the bonds.

The company declined to comment Friday on the talks, except to say they were continuing, according to a G.M. spokeswoman.

Chrysler is facing similar terms with its lenders and the union.

People familiar with the task force discussions said the Monday announcement would set very specific targets and conditions for G.M. and Chrysler to meet separately.

The companies are due to submit their own progress reports on the restructuring plans they initially gave the government last month.

G.M., however, may be forced to alter its plan somewhat. The plan currently calls for the elimination of 47,000 jobs worldwide and a significant reduction in brands, models and dealerships.

Chrysler has released one plan to exist as a stand-alone company, and an alternative one that includes joining forces with the Italian auto company Fiat.

The task force has not ruled out supporting a Fiat alliance for Chrysler but is intent on keeping all options open for the company, including revival of previous merger talks between Chrysler and G.M. at some point.

Administration officials have said the bailout of the automakers is at a turning point, and the task force would intensify its oversight of G.M. and Chrysler until talks with the union and bondholders reached a conclusion.

Those officials also said the administration had no intention of nationalizing the auto companies or taking direct control of their managements.

Freedom Tower To Be Renamed One World Trade Center

Outcry after new Ground Zero tower loses 'Freedom'

Go To Original

The owners of the skyscraper being built at Ground Zero ran into controversy Friday with the decision to strip the building of its patriotic unofficial name "Freedom Tower."

"No more freedom," read the front page of the Daily News, declaring in an editorial that the site's owner, the New York and New Jersey Port Authority, was "erasing history."

"Freedom is out of fashion at Ground Zero," rival tabloid the New York Post said.

The Port Authority announced that the planned 1,776-foot building, now barely above its foundations, will instead be known by the same name as one of the twin towers destroyed in the September 11, 2001 terrorist attacks: One World Trade Center.

Port Authority Chairman Anthony Coscia made the announcement Thursday, saying: "As we market the building we will ensure that the building is presented in the best possible way.... One World Trade Center is its address, it's the one that we are using."

The spat coincided with the signing on Thursday of the building's first commercial tenant -- a 21-year deal with China's Vantone Industrial Company.

The Chinese company will take up the entire 65th and 69th floors and part of the 64th with a business and cultural facility dubbed the China Center.

Following a series of delays, the building is not scheduled to be ready for occupancy until 2014.

Susan Regenhard, the mother of one of the firefighters killed on 9/11, along with nearly 3,000 other people, said the Port Authority cared about marketing more than memories.

"It's all about marketing, all about PR, all about them making money," Regenhard told AFP.

Regenhard said she was never a fan of the "Freedom Tower" name because the the mammoth project is allegedly riddled with unsafe work.

"What's in a name? It's about the nature of these buildings," she said. "This is the number one terrorist target in the world."

Former New York Governor George Pataki, first to coin the name "Freedom Tower," reacted defiantly.

"The Freedom Tower isn't going to be One World Trade Center, it's going to be the Freedom Tower," he said in comments broadcast on NY1 television.

"I think One and Two World Trade Center are sacred names which should never be used again," said Pataki.