Monday, August 10, 2009

Bin Laden Worked for US Till 9/11

Bin Laden Worked for US Till 9/11

By Lukery

Go To Original

Former FBI translator Sibel Edmonds dropped a bombshell on the Mike Malloy radio show, guest-hosted by Brad Friedman (audio, partial transcript).

In the interview, Sibel says that the US maintained 'intimate relations' with Bin Laden, and the Taliban, "all the way until that day of September 11."

These 'intimate relations' included using Bin Laden for 'operations' in Central Asia, including Xinjiang, China. These 'operations' involved using al Qaeda and the Taliban in the same manner "as we did during the Afghan and Soviet conflict," that is, fighting 'enemies' via proxies.

As Sibel has previously described, and as she reiterates in this latest interview, this process involved using Turkey (with assistance from 'actors from Pakistan, and Afghanistan and Saudi Arabia') as a proxy, which in turn used Bin Laden and the Taliban and others as a proxy terrorist army.

Control of Central Asia
The goals of the American 'statesmen' directing these activities included control of Central Asia's vast energy supplies and new markets for military products.

The Americans had a problem, though. They needed to keep their fingerprints off these operations to avoid a) popular revolt in Central Asia (Uzbekistan, Azerbaijan, Kazakhstan and Turkmenistan), and b) serious repercussions from China and Russia. They found an ingenious solution: Use their puppet-state Turkey as a proxy, and appeal to both pan-Turkic and pan-Islam sensibilities.

Turkey, a NATO ally, has a lot more credibility in the region than the US and, with the history of the Ottoman Empire, could appeal to pan-Turkic dreams of a wider sphere of influence. The majority of the Central Asian population shares the same heritage, language and religion as the Turks.

In turn, the Turks used the Taliban and al Qaeda, appealing to their dreams of a pan-Islamic caliphate (Presumably. Or maybe the Turks/US just paid very well.)

Accordingto Sibel:

This started more than a decade-long illegal, covert operation in Central Asia by a small group in the US intent on furthering the oil industry and the Military Industrial Complex, using Turkish operatives, Saudi partners and Pakistani allies, furthering this objective in the name of Islam.

Sibel was recently askedto write about the recent situation with the Uighurs in Xinjiang, but she declined, apart from saying that "our fingerprint is all over it."

Of course, Sibel isn't the first or only person to recognize any of this. Eric Margolis, one of the best reporters in the West on matters of Central Asia, stated that the Uighurs in the training camps in Afghanistan up to 2001:

"were being trained by Bin Laden to go and fight the communist Chinese in Xinjiang, and this was not only with the knowledge, but with the support of the CIA, because they thought they might use them if war ever broke out with China."

And also that:

"Afghanistan was not a hotbed of terrorism, these were commando groups, guerrilla groups, being trained for specific purposes in Central Asia."

In a separate interview, Margolis said:

"That illustrates Henry Kissinger's bon mot that the only thing more dangerous than being America's enemy is being an ally, because these people were paid by the CIA, they were armed by the US, these Chinese Muslims from Xinjiang, the most-Western province.

The CIA was going to use them in the event of a war with China, or just to raise hell there, and they were trained and supported out of Afghanistan, some of them with Osama Bin Laden's collaboration. The Americans were up to their ears with this."

Rogues Gallery
Last year, Sibel came up with a brilliant idea to expose some of the criminal activity that she is forbidden to speak about: she publishedeighteen photos, titled "Sibel Edmonds’ State Secrets Privilege Gallery," of people involved the operations that she has been trying to expose. One of those people is Anwar Yusuf Turani, the so-called 'President-in-exile' of East Turkistan (Xinjiang). This so-called 'government-in-exile' was 'established' on Capitol Hill in September, 2004, drawing a sharp rebuke from China.

Also featured in Sibel's Rogues Gallery was 'former' spook Graham Fuller, who was instrumental in the establishment of Turani's 'government-in-exile' of East Turkistan. Fuller has written extensively on Xinjiang, and his "Xinjiang Project" for Rand Corp is apparentlythe blueprint for Turani's government-in-exile. Sibel has openly statedher contempt for Mr. Fuller.

The Turkish establishment has a long history of mingling matters of state with terrorism, drug trafficking and other criminal activity, best exemplified by the 1996 Susurluk incident which exposed the so-called Deep State.

Sibel states that "a few main Susurluk actors also ended up in Chicago where they centered 'certain' aspects of their operations (Especially East Turkistan-Uighurs)."

One of the main Deep State actors, Mehmet Eymur, former Chiefof Counter-Terrorism for Turkey's intelligence agency, the MIT, features in Sibel's Rogues Gallery. Eymur was given exile in the US. Another member of Sibel's gallery, Marc Grossman was Ambassador to Turkey at the time that the Susurluk incident exposed the Deep State. He was recalled shortly after, prior to the end of his assignment, as was Grossman's underling, Major Douglas Dickerson, who later tried to recruit Sibel into the spying ring.

The modus operandi of the Susurluk gang is the same as the activities that Sibel describes as taking place in Central Asia, the only difference is that this activity was exposed in Turkey a decade ago, whereas the organs of the state in the US, including the corporate media, have successfully suppressed this story.

Chechnya, Albania & Kosovo
Central Asia is not the only place where American foreign policy makers have shared interests with Bin Laden. Consider the war in Chechnya. As I documented here, Richard Perle and Stephen Solarz (both in Sibel's gallery) joined other leading neocon luminaries such as Elliott Abrams, Kenneth Adelman, Frank Gaffney, Michael Ledeen, James Woolsey, and Morton Abramowitz in a group called the American Committee for Peace in Chechnya (ACPC). For his part, Bin Laden donated$25 million to the cause, as well as numerous fighters, and technical expertise, establishing training camps.

US interests also convergedwith those of al-Qaeda in Kosovo and Albania.

Of course, it is not uncommon for circumstances to arise where 'the enemy of my enemy is my friend.' On the other hand, in a transparent democracy, we expect a full accounting of the circumstances leading up to a tragic event like 9/11. The 9/11 Commission was supposed to provide exactly that.

State Secrets
Sibel has famously been dubbed the most gagged woman in America, having the State Secrets Privilege imposed on her twice. Her 3.5 hour testimony to the 9/11 Commission has been entirely suppressed, reduced to a single footnote which refers readers to her classified testimony. In the interview, she says that the information that was classified in her case specifically identifies that the US was using Bin Laden and the Taliban in Central Asia, including Xinjiang. In the interview, Sibel reiterates that when invoking the gag orders, the US government claims that it is protecting " 'sensitive diplomatic relations,' protecting Turkey, protecting Israel, protecting Pakistan, protecting Saudi Arabia..." This is no doubt partially true, but it is also true that they are protecting themselves too, and it is a crime in the US to use classification and secrecy to cover up crimes.

As Sibel says in the interview:

I have information about things that our government has lied to us about... those things can be proven as lies, very easily, based on the information they classified in my case, because we did carry very intimate relationship with these people, and it involves Central Asia, all the way up to September 11.

The bombshell here is obviously that certain people in the US were using Bin Laden up to September 11, 2001.

It is important to understand why: the US outsourced terror operations to al Qaeda and the Taliban for many years, promoting the Islamization of Central Asia in an attempt to personally profit off military sales as well as oil and gas concessions.

The silence by the US government on these matters is deafening. So, too, is the blowback.

This Depression Is Just Beginning

This Depression is just beginning

By Mike Whitney

Go To Original

Too bad Pulitzers aren't handed out for blog-entries. This year's award would go to Zero Hedge for its "The 'Money on the Sidelines' Fallacy" post. This short entry shows why the economy will continue its downward slide and why the US consumer will not get off the mat and resume spending as he has in the past. The fact is the Net Wealth of US Households has "declined from a peak of $22 trillion to just under $12 trillion in early March."


The problem is compounded by the fact that Total US Household debt, as of first quarter 2009, amounts to roughly $13 trillion, and has stayed within that range for the last 3 and a half years.

Zero Hedge:

"From the end of 2007 through Q1 of 2009, household equity has declined by 94%. Is it surprising that today's GDP number would have been a complete debacle if the consumer had been left alone to prop the U.S. economy, on whom 70% of the economy is reliant? Obama pulled a Hail Mary with the stimulus: without it there would be no debate America is in a depression right now." (

What does all this mean?

It means the consumer is down-for-the-count. His credit lines have been cut, his home equity eviscerated, and his checking account swimming in red ink. That spells trouble for an economy that's 70% dependent on consumer spending for growth....which brings us to another interesting point. The uptick in GDP last quarter was almost entirely the result of the surge in government spending; ie "fiscal and monetary stimulus". How long can that go on? How long will China keep slurping up US Treasuries rather than let their currency rise? Here's a clip from the Wall Street Journal on Friday:

"Shaky auctions of Treasury notes this week reignited concerns about whether the government can attract buyers from China and elsewhere to soak up trillions in new debt.

A fuse was lit this week when traders noted China's apparent absence from direct participation in two Treasury bond auctions. While China may have bought Treasurys just before the auctions, market participants read the country's actions as a worrying sign that China and other foreign investors may be ratcheting back purchases at a time when the U.S. is seeking to fund a $1.8 trillion budget deficit.

This week alone, the U.S. deluged the bond market with more than $200 billion in record-size sales. The U.S. has had little trouble finding buyers in recent months. But that demand is fading, and the Treasury market has become volatile."

Uncle Sam is goosing the bond market just like he is the stock market. (more on that later) Take a look at Treasury's latest bit of chicanery which appeared in the back pages of the Wall Street Journal in June:

"The sudden increase in demand by foreign buyers for Treasurys, hailed as proof that the world's central banks are still willing to help absorb the avalanche of supply, mightn't be all that it seems.

When the government sells bonds, traders typically look at a group of buyers called indirect bidders, which includes foreign central banks, to divine overseas demand for U.S. debt. That demand has been rising recently, giving comfort to investors that foreign buyers will continue to finance the U.S.'s budget deficit.

But in a little-noticed switch on June 1, the Treasury changed the way it accounts for indirect bids, putting more buyers under that umbrella and boosting the portion of recent Treasury sales that the market perceived were being bought by foreigners." ("Is foreign Demand as solid as it looks, Min zeng)


So, someone doesn't want you and me to know that foreign demand has gone to the dogs. That's not encouraging. So, they move the shells around the table and "Presto"---central banks and foreign investors can't get enough of those fetid T-Bills. What a racket.

This is what happens when monetary policy is handed over to bank-vermin and Ponzi-scam artists. Anything goes!

The Zero Hedge article shows that homeowners used the equity in their homes to fuel the soaring stock market.

Zero Hedge: "Most interesting is the correlation between Money Market totals and the listed stock value since the March lows: a $2.7 trillion move in equities was accompanied by a less than $400 billion reduction in Money Market accounts!

Where, may we ask, did the balance of $2.3 trillion in purchasing power come from? Why the Federal Reserve of course, which directly and indirectly subsidized U.S. banks (and foreign ones through liquidity swaps) for roughly that amount. Apparently these banks promptly went on a buying spree to raise the all important equity market, so that the U.S. consumer who net equity was almost negative on March 31, could have some semblance of confidence back and would go ahead and max out his credit card. Alas, as one can see in the money multiplier and velocity of money metrics, U.S. consumers couldn't care less about leveraging themselves any more."

You read that right! Only $400 billion of that fantastic 6 month "green shoots" stock market rally came from money market accounts. The rest ($2.3 trillion) was laundered through the banks and other financial institutions to create the appearance of recovery and to raise equity for underwater banks rather than forcing them into receivership (which is where they belong) Bernanke probably knew that congress wouldn't approve another TARP-type bailout for dodgy mortgage-backed assets, so he settled on this shifty plan instead. The only problem is, the banks are still broke, business investment is at historic lows, consumers are on the ropes, the unemployment lines are swelling, the homeless shelters are bulging, the pawn shops are bustling, tent cities are sprouting up everywhere, and according to MarketWatch, Corporate insiders have recently been selling their companies' shares at a greater pace than at any time since the top of the bull market in the fall of 2007."

Face it; the economy is in the crapper and Bernanke's trickery hasn't done a lick of good.

It's been two years since the crisis began and nothing... NOTHING has been done to fix the banking system or force the banks to write-down their shi**y assets to market. But the losses are real and no amount of Congressionally approved accounting hanky-panky (like suspending mark-to-market) will change a bloody thing.

So, how bad will it get?

Well, it depends on whether the FDIC decides to continue to allow financial institutions like Corus and Guaranty Banks to operate with "negative Tier 1 ratio" hoping that all the green shoots happy talk can turn insolvent institutions into thriving mega-banks. "Abrakadabra".

Karl Denninger explains this latest hoax in a recent entry on his site Market Ticker:

"So what's going on here?

Simple: An enormous number of banks are holding loans at or close to "par" that really aren't. They're holding mortgages at massively-inflated values, even on defaulted properties, and this is why you are not seeing more foreclosure sales - that is, why inventory is being held back. If they sell it the accountants will force recognition of the loss, which will render them instantly insolvent, but so long as they "extend and pretend" they are marking these loans way, way above recovery value. The upshot of this is that these firms' balance sheet claims on asset values are massively inflated, regulators know it, and they're intentionally ignoring it."

Bingo! It's all 100% fakery conducted right under the nose of the Fed, the Treasury and the FDIC.

How many hundreds of banks are being kept on life-support because the FDIC is down to its last few farthings and doesn't want to ignite a panic?

Stay tuned.

The banking system is insolvent and the fact that the politically-connected big banks talked their their friends at the Fed into pumping liquidity into equities so they could access the capital markets, doesn't change matters for the hundreds of local and regional banks that will be caught in next year's downdraft. Prepare for massive consolidation with G-Sax and JPM left to pick up former competitors for pennies on the dollar.


Keep in mind that Wall Street veterans knew from the very beginning that Bernanke's quantitative easing (QE) was a load of malarkey intended to justify keeping toxic asset prices artificially high while pumping trillions into the stock market. Here's former hedge fund manager Andy Kessler's analysis way back in May:

"On March 18, the Federal Reserve announced it would purchase up to $300 billion of long-term bonds as well as $750 billion of mortgage-backed securities. Of all the Fed's moves, this "quantitative easing" gets money into the economy the fastest -- basically by cranking the handle of the printing press and flooding the market with dollars (in reality, with additional bank credit). Since these dollars are not going into home building, coal-fired electric plants or auto factories, they end up in the stock market.

A rising market means that banks are able to raise much-needed equity from private money funds instead of from the feds. .....It's almost as if someone engineered a stock-market rally to entice private investors to fund the banks rather than taxpayers." (Andy Kessler "Was it a Sucker's Rally" Wall Street Journal)

What a swindle.

Bernanke's had a good go-of-it, juicing the market through the backdoor and concealing--as much as possible--who is still buying US Treasuries. (who knows; maybe it's the Fed buying its own paper offshore?!?) But what good will it do? The US consumer is broke; the tank is on empty. Household equity has declined by 94%, jobs are scarce, personal savings are rising, and families are cutting back and hunkering down. It will take a decade or more before household debt is whittled-away to a point where people can consume at pre-crisis levels. Another stock market bubble won't change a damn thing. This Depression is just beginning.

Turning the US Army Against Americans

Turning the US Army Against Americans

An antiwar activist has been accused of spying for the US army, raising legal questions the Obama administration must answer

By Dan Kennedy

It was an odd little story, tucked well inside the front section of this past Sunday's New York Times.

An antiwar activist in the state of Washington had been exposed as an undercover informant for the US army, stationed at massive Fort Lewis, south of Tacoma. And in one of those Kafkaesque twists for which our government is renowned, the army is now investigating itself to determine how such an arrangement came to pass.

Although the Times gave no credit, the story had been broken on 28 July by Democracy Now!, a leftwing television programme co-anchored by Amy Goodman, a longtime progressive journalist. For nearly an hour, two former associates of John Towery – a civilian employee of the army – explained how they learned their fellow activist was in fact a military spy.

"We hung out," said Brendan Maslauskas Dunn, who filed the public-records request that inadvertently outed Towery, who had been going by the name John Jacob. "We gave workshops together on grassroots direct democracy and anarchist struggle. I mean, he was a friend."

Fellow activist Drew Hendricks offered a weird twist, telling Goodman that, as far back as 2007, Towery identified himself as an army employee and offered to provide Hendricks with "observations and inside knowledge of operations on Fort Lewis".

The picture that emerges is worthy of a cheap spy novel. If Maslauskas Dunn and Hendricks are correct, then Towery truthfully told antiwar activists that he worked for the army, but lied about his name and real purpose: gathering intelligence on his new associates and what threat they might have posed. (According to the Times, antiwar groups in Washington have attempted to "disrupt military shipments".)

Moreover, Towery's alleged activities would almost certainly have been illegal. According to two lawyers whom Goodman interviewed, Larry Hildes of the National Lawyers Guild and Mike German of the American Civil Liberties Union, such spying would violate the Posse Comitatus Act, which prohibits the use of American military forces for domestic law-enforcement operations. The law was weakened during the Bush years, though Hildes and German told Goodman that operations such as that attributed to Towery remain illegal.

Towery's alleged spying is yet another sign that Barack Obama's reluctance to come to terms with the legacy of George Bush and Dick Cheney's legacy is simply not tenable. By attempting to move on without accountability, Obama is becoming complicit in the very activities against which he ran.

The Bush-Cheney administration's obsession with running roughshod over constitutional and legal principles is by now well-established, with torture being just the most infamous example. Only a week ago, the New York Times revealed that Cheney had pushed hard in 2002 to send troops to suburban Buffalo in order to arrest several al-Qaida suspects. It's difficult to imagine why Cheney would want to do such a thing other than to set a precedent. In any event, Bush said no.

And as we know, Cheney, Donald Rumsfeld, Paul Wolfowitz and their fellow neoconservatives weren't above casting institutions such as the military and even the CIA as weak and unpatriotic when it suited their purposes.

General Eric Shinseki, after all, was cashiered from his position as army chief of staff after he dared to tell the truth about how many troops would be needed to carry out a successful invasion and occupation of Iraq. (Shinseki is now Obama's secretary of veterans affairs.)

And when former diplomat Joseph Wilson, on a mission for the CIA, revealed he had found no evidence that Saddam Hussein sought to purchase uranium in Niger, Team Cheney retaliated by exposing his wife, Valerie Plame Wilson, as an agency operative.

The Towery allegations are not the first time it's been reported that the goverment has infiltrated the rather impotent antiwar movement. A little more than a year ago, for instance, it was revealed that the Maryland state police had spied on peace activists in that state. But the alleged misuse of the army places this on a different level, both ethically and legally.

Not to get ahead of the story, but if the Towery story bears out, then it's difficult to imagine he was alone. In that sense this could prove to be reminiscent of Cointelpro, the FBI's secret, illegal programme, which kept tabs on dissidents from 1956 to1971. We need to know the truth about what happened during the Bush-Cheney years, and what may still be happening, with or without Obama's knowledge.

Since his inauguration more than six months ago, Obama has been half-hearted, at best, about exposing his predecessor's wrongdoing. Maybe he's right – maybe he can't investigate the Bush White House and govern the country at the same time.

But if that is the case, then Obama should quietly encourage officials like Vermont senator Patrick Leahy, who has made it clear that he'd like to conduct a no-holds-barred investigation.

Much as Obama would like to put it all behind us, he can't. And he shouldn't.

The Expiring Economy

The Expiring Economy

By Paul Craig Roberts

Go To Original

cities springing up all over America are filling with the homeless unemployed from the worst economy since the 1930s. While Americans live in tents, the Obama government has embarked on a $1 billion crash program to build a mega-embassy in Islamabad, Pakistan, to rival the one the Bush government build in Baghdad, Iraq.

Hard times have now afflicted Americans for so long that even the extension of unemployment benefits from 6 months to 18 months for 24 high unemployment states, and to 46 - 72 weeks in other states, is beginning to run out. By Christmas 1.5 million Americans will have exhausted unemployment benefits while unemployment rolls continue to rise.

Amidst this worsening economic crisis, the House of Representatives just passed a $636 billion “defense” bill.

Who is the United States defending against? Americans have no enemies except those that the US government goes out of its way to create by bombing and invading countries that comprise no threat whatsoever to the US and by encircling others--Russia for example--with threatening military bases.

America’s wars are contrived affairs to serve the money laundering machine: from the taxpayers and money borrowed from foreign creditors to the armaments industry to the political contributions that ensure $636 billion “defense” bills.

President George W. Bush gave us wars in Iraq and Afghanistan that are entirely based on lies and misrepresentations. But Obama has done Bush one better. Obama has started a war in Pakistan with no explanation whatsoever.

If the armaments industry and the neoconservative brownshirts have their way, the US will also be at war with Iran, Russia, Sudan and North Korea.

Meanwhile, America continues to be overrun, as it has been for decades, not by armed foreign enemies but by illegal immigrants across America’s porous and undefended borders.

It is more proof of the Orwellian time in which we live that $636 billion appropriated for wars of aggression is called a “defense bill.”

Who is going to pay for all of this? When foreign countries have spent their trade surpluses and have no more dollars to recycle into the purchase of Treasury bonds, when US banks have used up their “bailout” money by purchasing Treasury bonds, and when the Federal Reserve cannot print any more money to keep the government going without pushing up inflation and interest rates, the taxpayer will be all that is left. Already Obama’s two top economic advisors, Treasury Secretary Timothy Geithner and director of the National Economic Council Larry Summers, are floating the prospect of a middle class tax increase. Will Obama be maneuvered away from his promise just as Bush Sr. was?

Will Americans see the disconnect between their interests and the interests of “their” government? In the small town of Vassalboro, Maine, a few topless waitress jobs in a coffee house drew 150 applicants. Women in this small town are so desperate for jobs that they are reduced to undressing for their neighbors’ amusement.

Meanwhile, the Obama government is going to straighten out Afghanistan and Pakistan and build marble palaces to awe the locals half way around the world.

The US government keeps hyping “recovery” the way Bush hyped “terrorist threat” and “weapons of mass destruction.” The recovery is no more real than the threats. Indeed, it is possible that the economic collapse has hardly begun. Let’s look at what might await us here at home while the US government pursues hegemony abroad.

The real estate crisis is not over. More home foreclosures await as unemployment rises and unemployment benefits are exhausted. The commercial real estate crisis is yet to hit. More bailouts are coming, and they will have to be financed by more debt or money creation. If there are not sufficient purchasers for the Treasury bonds, the Federal Reserve will have to purchase them by creating checking accounts for the Treasury, that is, by debt monetization or the printing of money.

More debt and money creation will put more pressure on the US dollar’s exchange value. At some point import prices, which include offshored goods and services of US corporations, will rise, adding to the inflation fueled by domestic money creation. The Federal Reserve will be unable to hold down interest rates by buying bonds.

No part of US economic policy addresses the systemic crisis in American incomes. For most Americans real income ceased to grow some years ago. Americans have substituted second jobs and debt accumulation for the missing growth in real wages. With most households maxed out on debt and jobs disappearing, these substitutes for real income growth no longer exist.

The Bush-Obama economic policy actually worsens the systemic crisis that the US dollar faces as reserve currency. The fact that there might be no alternative to the dollar as reserve currency does not guarantee that the dollar will continue in this role. Countries might find it less risky to settle trade transactions in their own currencies.

How does an economy based heavily on consumer spending recover when so many high-value-added jobs, and the GDP and payroll tax revenues associated with them, have been moved offshore and when consumers have no more assets to leverage in order to increase their spending?

How does the US pay for its imports if the dollar is no longer used as reserve currency?

These are the unanswered questions.

The World Needs A Breather From The US.

The World Needs A Breather From The US.

And they'll get it sooner than many think

By Mike Whitney

Go To Original

We're making this way too complicated. It's simple really.

The Fed has only one tool at its disposal; to create more money. Typically, the way the Fed adds to the money supply is by lowering interest rates. When the Fed lowers rates below the rate of inflation; they're basically selling dollars for under a buck. That's a good deal, so, naturally, speculators jump on it and trigger a credit expansion. What follows is a frenzy of market activity that ends in a housing, credit, tech or equity bubble. Eventually, the bubble bursts and the economy goes into a tailspin. Then, after a period of digging-out, the process resumes again. Wash, rinse, repeat. It's always the same.

The moral is: Cheap money creates bubbles; and bubbles move wealth from workers to rich motherf**kers. It's as simple as that. That's why the wealth gap is wider now than anytime since the Gilded Age. The rich own everything.

The Federal Reserve is the policy arm of the big banks and brokerage houses. Period. Ostensibly, its mandate is to maintain "price stability and full employment". Right. Anyone notice how many jobs the Fed has created lately? How about the dollar? Is it really supposed to zig-zag like it has been for the last decade? The central task of the Fed is to shift wealth from one class to another. And it succeeds at that task admirably.

The Fed's "mandate" is public relations claptrap. Bernanke hasn't lifted a finger for homeowners, consumers or ordinary working stiffs. "Yer on yer own. Just don't expect a handout. That's socialism!" All the doe is flowing upwards...according to plan. The Fed is a social engineering agency designed to serve as the de facto government behind the smokescreen of democratic institutions. Did you really think a black, two year senator with no background in foreign policy or economics was calling the shots?

Puh-leeese! Obama is a public relations invention who's used to cut ribbons, console the unemployed, and convince Americans they live in a "post racial" society. Right. (Just take a look at the footage from Katrina again)

The Fed has complete control over monetary policy and, thus, the country's economic future. Bernanke doesn't even pretend to defer to Congress anymore. Why bother? After Lehman caved in, Bernanke invoked the "unusual and exigent" clause in the Fed's charter and declared himself czar. Now he has absolute power over the nation's purse-strings.

The $13 trillion the Fed has committed to the financial system since the beginning of the crisis --via loans and outright purchases of mortgage-backed garbage and US sovereign debt--was never authorized by Congress. In fact, the Fed stubbornly refuses to even identify which institutions got the "loans", how much the loans were worth, what kind of collateral was accepted for the loans, or when the loans have to be repaid.

In truth, the loans are not loans at all, but gifts to the industry to keep asset prices artificially high so that the entire financial system does not come crashing down. Check this out:

"In an analysis written by economist Gary Gorton for the Federal Reserve Bank of Atlanta’s 2009 Financial Markets Conference titled, "Slapped in the Face by the Invisible Hand; Banking and the Panic of 2007", the author shows that mortgage-related securities ballooned from $492.6 billion in 1996 to $3,071.1 in 2003, while asset backed securities (ABS) jumped from $168.4 billion in 1996 to $1,253.1 in 2006. All told, more than $20 trillion in securitized debt was sold between 1997 to 2007. "

$20 trillion! How much of that feces paper--which is worth just pennies on the dollar-- is sitting on the balance sheets of banks and other financial institutions just waiting to blow up as soon as the Fed asks for its money back? And the Fed will never get its money back because the prices of complex securities and derivatives will never regain their pre-crisis values. Why? Because these derivatives are linked to underlying collateral (mortgages) which have already declined 33% from their peak and are headed lower still. Also, these toxic assets were sold as risk-free (many of them were rated triple A) and have now been exposed as extremely risky or fraudulent. Because these assets were heaped together in bundles to strip out their interest rates, they cannot be easily separated which means that they are worth considerably less than the 33% that has been lost on the underlying collateral (mortgages) The securitization markets are not expected to rebound for a decade or more, which means that the Fed will have to find other more-creative way to goose the credit system to avoid a downward spiral.

But how?

Zero percent interest rates haven't worked because qualified borrowers are cutting spending and saving their disposable income, while people who need to borrow, no longer meet the banks' tougher lending standards. Bank credit is shrinking even though excess bank reserves are nearly $900 billion. When banks stop lending, the economy contracts, business activity slows, unemployment soars and growth sputters.
Presently, the economy is still contracting, but at a slower pace than before. "Less bad" is the new "good". All the recession indicators are still blinking red--income, employment, sales, and production--all down big! But it doesn't matter because it's a "Green Shoots" rally; plenty of cheap liquidity for the markets and a freeway off-ramp (for sleeping) for the unemployed.

The Fed's lending facilities are designed to pump liquidity into the system and inflate another bubble by generating more debt. Unfortunately, most people accept Bernanke's feeble defense of these corporate-welfare programs and fail to see their real purpose. An example may help to explain how they really work:

Say you bought a house at the peak of the bubble in 2005 and paid $500,000. Then prices dropped 40% (as they have in Calif) and your house is now worth $300,000. If you only put 5% down, ($25,000) then you are underwater by $175,000. Which means that you own more on the mortgage than your house is currently worth. (This is essentially what has happened to the entire financial system. The equity has vaporized, so institutions are using dodgy accounting tricks instead of reporting their real losses.) So Bernanke comes along and gives you $175,000 no interest, rotating loan to you so that no one knows that you are really busted and you can continue spending just as you had before. Not bad, eh? This is what the lending facilities are all about. It is a charade to conceal the fact that a large portion of the nation's financial institutions are insolvent and propped up by state largess.

But there's more, too.

Now that Bernanke has given you $175,000 no interest, rotating loan; you expect that eventually he will ask for his money back. Right? So your only hope of saving your home, in the long run, is to engage in risky behavior, like dabbling the stock market. It's like playing roulette, except you have nothing to lose since you are underwater anyway.

This is exactly what the financial institutions are doing with the Fed's loans. They're betting on equities and hoping they can avoid the Grim Reaper.

Here's how former hedge fund manager Andy Kessler summed it up last week in the Wall Street Journal: "By buying U.S. Treasuries and mortgages to increase the monetary base by $1 trillion, Fed Chairman Ben Bernanke didn't put money directly into the stock market but he didn't have to. With nowhere else to go, except maybe commodities, inflows into the stock market have been on a tear. Stock and bond funds saw net inflows of close to $150 billion since January. The dollars he cranked out didn't go into the hard economy, but instead into tradable assets. In other words, Ben Bernanke has been the market." (Andy Kessler, "The Bernanke Market" Wall Street Journal)

Only a small portion of the money that has gone into the stock market in the last 6 months (since the March lows) has come from money markets. The fed's loans are being laundered into stocks via financial institutions that are rolling the dice for their own survival. The uptick in the markets has helped insolvent banks raise equity in the capital markets so they don't have to grovel to Congress for another TARP bailout.

Everybody's elated with Bernanke's latest bubble except working people who have seen their wages slashed by 4.5%, their credit lines cut, the home values plunge, and their living standards sink to third world levels.

And the Fed's spending-spree is not over yet; not by a long shot. The next wave of home foreclosures (already 1.9 million in the first half of 2009) is just around the corner--the Alt-As, option arms, prime loans. The $3.5 trillion commercial real estate market is capsizing. The under-capitalized banking system will need assistance. And there will have to be another round of fiscal stimulus for ailing consumers. Otherwise, foreign holders of US Treasurys will see that the US can no longer provide 25% of global demand and head for the exits.

Bernanke's back is against the wall. The only thing he can do is print more money, shove it though the back door of the stock exchange and keep his fingers crossed. The rest is up to CNBC and the small army of media cheerleaders.

There is some truth to the theory that Bernanke saved the financial system from a Chernobyl-type meltdown. But that doesn't change the facts. Accounts must be balanced; debts must be paid.
The Fed chief has committed $13 trillion to maintain the appearance of solvency. But the system is bankrupt. The commercial paper market, money markets, trillions of dollars of toxic debt instruments, and myriad shyster investment banks and insurance companies are now backed by the "full faith and credit" of the US Treasury. The financial system is now a ward of the state. The "free market" has deteriorated into state capitalism; a centralized system where all the levers of power are controlled by the Central Bank. If Bernanke's Politburo withdraws its loans--or even if he raises interest rates too soon-- the whole system will collapse.

The economy is now balanced on the rickety scaffolding of the dollar. As the Obama stimulus wears off, the rot in the economy will become more apparent. Household red ink is at record highs, so personal consumption will not rebound. That means US assets and US sovereign debt will become less attractive. Foreign capital will flee. The dollar will fall.

The world needs a breather from the US. And they'll get it sooner than many think.

Hunger Hits Detroit's Middle Class

Hunger hits Detroit's middle class

Food has long been an issue in this city without a major supermarket. Now demand for assistance is rising, affecting a whole new set of people.

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On a side street in an old industrial neighborhood, a delivery man stacks a dolly of goods outside a store. Ten feet away stands another man clad in military fatigues, combat boots and what appears to be a flak jacket. He looks straight out of Baghdad. But this isn't Iraq. It's southeast Detroit, and he's there to guard the groceries.

"No pictures, put the camera down," he yells. My companion and I, on a tour of how people in this city are using urban farms to grow their own food, speed off.

In this recession-racked town, the lack of food is a serious problem. It's a theme that comes up again and again in conversations in Detroit. There isn't a single major chain supermarket in the city, forcing residents to buy food from corner stores. Often less healthy and more expensive food.

As the area's economy worsens --unemployment was over 16% in July -- food stamp applications and pantry visits have surged.

Detroiters have responded to this crisis. Huge amounts of vacant land has led to a resurgence in urban farming. Volunteers at local food pantries have also increased.

But the food crunch is intensifying, and spreading to people not used to dealing with hunger. As middle class workers lose their jobs, the same folks that used to donate to soup kitchens and pantries have become their fastest growing set of recipients.

"We've seen about a third more people than before," said Jean Hagopian, a volunteer at the New Life food pantry, part of the New Life Assembly of God church in Roseville, a suburb some 20 miles northeast of Detroit. Hagopian said many of the new people seeking assistance are men, former breadwinners now in desperate need of a food basket.

Hagopian is an 83-year old retired school teacher. She works at the pantry four days a week, spending two of those days driving her own minivan around town collecting food from local distributors.

The pantry, housed in the church basement, gives away boxes of food that might feed a family of four for a week. It includes dry and packaged goods like cereals and pasta, peanut butter, canned fruits and vegetables, 7 or 8 pounds of frozen meat (usually chicken or hot dogs), and eight pan pizzas donated from a local Pizza Hut. Most of the other food is purchased from a distributor or donated by the county food program. Last month they gave out 519 boxes.

Hagopian hopes the demand for food doesn't get much worse.

"I hope we're at the top of it because we'll run out of food, and then we'll have to go out and find some more," she said.

She should brace for the worst. Across metro Detroit, social service agencies are reporting a huge spike in demand for food assistance.

Gleaners, an agency that distributes excess food donated from food processors, says their distribution is up 18% from last year. Michigan Department of Human Services, which handles federal food assistance like food stamps, WIC checks and such, has seen a 14% spike in applications since October. Calls to the United Way's help line have tripled in the last year.

"Given the resources, we could double our numbers," said Frank Kubik, food program manager for Focus:Hope, a Detroit aid organization that fed 41,000 mostly elderly people last year. Kubik said his program is restricted by charter and budget from serving more than its current number of clients. But if that were changed, he could certainly serve up more meals.

"There's no doubt about it, there's just so many out there that are really struggling right now," he said.

The changing face of hunger

There have been plenty of people struggling in Detroit for a long time. What makes this recession different is the type of people coming in. It's no longer just the homeless, or the really poor.

Now it's middle class folks who lost their $60,000-a-year auto job, or home owners who got caught on the wrong side of the real estate bubble.

Many of these people have never navigated the public assistance bureaucracy before, and that makes getting aid to them a challenge.

"They have no idea where the DHS office is," said DeWayne Wells, president of Gleaners, the food distributor.

To assist these newly hungry, Wells pointed to the United Way's 211 program, where people can call the hotline and speak to an operator that guides them through a wide range of available social services.

The Michigan Department of Human Services is going digital, rolling out a program where people can apply for food stamps via the Web.

That may help ease another challenge in getting aid to the middle class: pride. Many people feel so bad about having to ask for help that they just don't, or they have issues with it once they do.

"They'll say things like 'I've never had to do this before' and they feel a little uncomfortable," said Hagopian, the retired school teacher. But she says times have changed, the good union jobs are disappearing and it's harder and harder to find work.

"I just tell them society is not what it used to be," she said.

Detroit responds

Actually running out of food doesn't seem to be a problem, so far. In fact, because more people are being affected the response seems to be greater.

"A few years ago it was someone you saw a profile of on TV," said Wells. "Now it's your brother in-law, or the people your kid plays soccer with."

Wells said volunteers are up at Gleaners, as is general community awareness.

The Feds have helped too. Food stamp allowances were increased 14% nationwide under the stimulus plan.

Detroiters are also helping themselves in smaller ways. Thanks to the dearth of big supermarkets in Detroit proper - a phenomenon largely attributed to lack of people - and plenty of vacant land, community gardening has caught on big.

It's not so much that these gardens are going to feed the city, although they certainly help. It's more that they can be used to teach people, especially children, the value of eating right.

"I use vegetables every day," said one child at an after school gardening program run by Earthworks Urban Farm, near the heart of the city. "Last night, an onion I picked from here, I had in my potatoes."

Hearing that is good news to people like Dan Carmody, president of Eastern Market Corp., a century-old public market selling fresh produce and other foodstuffs near downtown Detroit.

Carmody is part of a group of people trying to bring healthy food to town. The efforts include setting up mobile produce stands around the city, working with convenience store owns to stock better produce, and trying to set up a program that allows food stamp recipients to spend twice as much money if they buy from a local farmer.

He says the food situation in Detroit is particularly depressing because the surrounding areas are chock full with some of the best eats around: Michigan grows some of the most varied crops in the nation, everything from apples and cantaloupes to peaches and watermelon. Windsor, just across the bridge, is the hydroponics capital of Canada. Artisan Amish farms are also close by in Ohio and Pennsylvania.

Getting this food to Detroit, and getting Detroiters to buy it is the challenge. That's where the urban farms come in.

"Once kids start seeing where their food comes from," he said, "it changes the whole approach to how they eat."

Faulty Forecasting

Faulty Forecasting

By Ralph Nader

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Companies that specialize in stock market forecasting and trading—such as Goldman Sachs, Citigroup, Morgan Stanley, and JPMorgan Chase—pay very high salaries to their employee-vendors. New York Attorney General Andrew Cuomo just released data showing that these and other large banks are giving each of their 5000 trader-forecasters bonuses of at least one million dollars.

In return, these fat cats are very frequently wrong in their recommendations and decidedly unprofessional in their fiduciary relationships with the clueless, trusting clients who rely on them. Win or lose, they get their fees.

These firms and brokers are making money largely from other people’s money—pensions, savings and investments. Overall many produce little more than gambling tips. When these moneyboys try to justify their doings as providing liquidity, hedging against risk, assembling capital for productive investment, listeners are permitted to robustly laugh. This is especially so now during Wall Street’s massive, self-inflicted financial collapse. The economy, and taxpayers, are paying for this reckless speculation.

Meanwhile, outside this paper economy, people are producing for the real economy—manufacturing, repairing and maintaining products and structures, offering needed services for consumers. These people are far lower on the income ladder. Unlike their speculating counterparts, if the workers in the real economy stayed home, the economy would stop cold.

I was rummaging recently through some old publications and randomly came across the March 24, 2008 issue of Barron’s, a leading financial weekly. Its contributors and interviewees are supposed to be among the savviest around. Here are some samples of their perspicacity.

The cover story asserts that “the financial sector’s strongest players probably don’t have further to sink, even with the ongoing pressure of negative news. Stocks of the industry’s strongest players could climb by 10% to 20% over the next year as panic recedes, earnings improve and price-to-earnings multiples expand.”

The author, Jacqueline Doherty, got specific. She cited Merrill Lynch, Citigroup, Bank of America, Washington Mutual, among others, for the predicted upswing. At the time (March 24, 2008), Merrill stock was selling for $46.85. Before the year’s end, the stock was worthless and Merrill was swallowed by Bank of America. Washington Mutual, the nation’s largest savings bank, saw its stock, selling at $11.70, go to zero as it was absorbed by JPMorgan Chase in September 2008. Citigroup was selling at $22.50 per share. Now, it has climbed just above $3 per share, and Citigroup narrowly avoided bankruptcy due to a huge federal bailout.

Leafing through Barron’s pages of that week of March 24, 2008, I read a prediction by James Finucane—who is described as a “talented strategist—that the Dow would reach 20,000 within a year. A year later in late March 2009, the Dow was below 8000. Even James Glassman, who loudly predicted in 1999 that the Dow would go to 36,000 by 2005, has been mercifully quiet.

Unlike sloppy plumbers and carpenters who pay a price for their mistakes, Wall Street forecasters seem to be paid very well despite being chronically wrong.

A few Barron’s pages later, columnist Eric J. Savitz was writing that worries about NVIDIA were overblown. The computer chip company stock having peaked in October 2007 at just under $40 a share, was selling for $18.52 when Mr. Savitz was touting its prospects. On August 4, 2009, NVIDIA closed at $13.37 per share.

And so it goes week after week in the financial world of pundits. Do you know of any other profession that can be so wrong so often and be rewarded so well again and again? On their behalf, they say that they cannot guarantee against risk and that they rely on cues from the watchdogs.

The first defense is unrebuttable because it shifts all risk away from the purportedly knowledgeable minds and onto market imponderables. Then why be so cocksure of what you urge investors to buy?

Second, they know that the watchdogs are paid to look the other way and let avarice and deception prevail. These “watchdogs” include the boards of directors, the large law firms, the major accounting firms, and the ratings companies like Moody’s and Standard and Poor’s.

Looking the other way also pays for most state and federal legislators and the regulators. The former solicit campaign contributions and the latter are looking forward to cushy positions in the industries they failed to regulate as government servants.

The forecasters’ excuse is that the watchdogs weren’t barking to alert them. Come on! These forecasters weren’t born yesterday.

veteran columnist Alan Abelson is a sharp pen hedger who calls his weekly commentary “Up and Down Wall Street”. Abelson is a wry, irreverent free-thinker on the conservative side, but he sometimes offers useful insights. Maybe he can break his remaining taboo and apply his mordant, satirical style to review a year of Barron’s recommendations and see whether short sellers made more money than investors did who bought on the suspect advice.

It could be that the fog at Barron’s is lifting; it just recently offered a year’s subscription for $52, a sharp discount from its $260 yearly newsstand cost of $5 per copy. Now that’s a realistic price worth paying at least if you like comedic doses of illusion and the fullest stock tables on paper west of the Pecos.

Ralph Nader is a consumer advocate, lawyer, and author.

Honduras is Only Part of the Story

The Conservative Counter-Attack in Latin America


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I would submit that events in Honduras are not isolated, but rather part of a conservative counterattack taking shape in Latin America. For some time, the right has been rebuilding in Latin America; hosting conferences, sharing experiences, refining their message, working with the media, and building ties with allies in the United States. This is not the lunatic right fringe, but rather the mainstream right with powerful allies in the middle class that used to consider themselves center, but have been frightened by recent left electoral victories and the rise of social movements. With Obama in the White House and Clinton in the State Department they have now decided to act. Bush/Cheney and company did not give them any coverage and had become of little use to them. A "liberal" in the White House, gives conservative forces the kind of coverage they had hoped for. It is no coincidence that Venezuelan opposition commentators applauded the naming of Clinton to the State Department claiming that they now had an ally in the administration. The old cold-warrior axiom that the best antidote against the left is a liberal government in Washington gains new meaning under Obama with Clinton at the State Department.

Coup leaders in Honduras and their allies continue to play for time. Washington's continuing vacillation is allowing them to exhaust this option, but so are right-wing governments in Colombia, Mexico, Panama and Peru. After all, this coup is not just about Honduras but also about left success in Latin America, of which Honduras was the weakest link. It is increasingly becoming obvious that there is no scenario under which elites in Honduras will accept Zelaya back. I do not think that they have a plan "B" on this matter and this speaks to the kind of advice they are getting from forces in the U.S. and the region. If Zelaya comes back, the Supreme Court, the Congress, the military and the church all-loose credibility and it opens the door for the social and political movements in Honduras to push for radical change that conservative forces would find more difficult to resist.

But Honduras is only part of the equation. Colombia's decision to accept as many as 7 new U.S. military bases (3 airbases, including Palanquero, 2 army bases, and 2 naval bases one on the Pacific and one on the Caribbean), dramatically expands the U.S. military's role in the country and throughout the region. The Pentagon has been eyeing the airbase at Palanquero with its complex infrastructure and extensive runway for some time. This is a very troubling sign that will alter the balance of forces in the region, and speaks volumes about how the Obama administration plans to respond to change in Latin America. A possible base on the Caribbean coast of Colombia would also offer the recently reactivated U.S. Fourth Fleet, a convenient harbor on the South American mainland. In short, Venezuela would be literally encircled. However, Venezuela is not the only objective. It also places the Brazilian Amazon and all its resources within striking distance of the U.S. military, as well as the much sought after Guarani watershed. After public criticism from Bachalet of Chile, Lula of Brazil and Chávez of Venezuela, Uribe refused to attend the 10 August meeting of UNASUR, the South American Union, where he would be expected to explain the presence of the U.S. bases. The meeting of the UNASUR security council was scheduled to take up the issue of the bases and Bolivia's suggestion for a unified South American response to drug trafficking. Instead, Uribe has launched his own personal diplomacy traveling to 5 different countries in the region to explain his actions. In addition, Obama's National Security Advisor James Jones is in Brazil trying to justify the U.S. position on the bases.

The recent media war launched by Uribe against Ecuador and Correa once again claiming financing of the FARC and the more recent offensive against Venezuela concerning 30 year old Swedish missiles, that like, the Reyes computers, cannot be independently verified, have filled the airwaves in Venezuela, Colombia and the region. The current Colombian media campaign was preceded by Washington's own efforts to condemn Venezuela for supposed non-compliance in the war against drug trafficking. In addition, Israel's foreign minister Avigdor Liberman also travelled throughout Latin America in July claiming that Venezuela is a destabilizing force in the region and in the Middle East.

Lost in all this, is the fact that Uribe is still considering a third term in office and his party has indicated it will push for a constitutional reform. So conflicts with Ecuador and Venezuela serves to silence critics in Colombia and keep Uribe's electoral competitors at bay. All we need now is for Uribe to ask the Interpol to verify the missiles origins and director Ron Noble to give another press conference in Bogota. Déjà vu all over again!

The right and its allies in the U.S. are also emboldened by the electoral victory in Panama and the very real prospects of leftist defeats this year in Chile and even Uruguay. Obviously they are also encouraged by the humiliating defeat of the Fernández / Kirchner's in Argentina. These developments could begin to redraw the political map of the region. Correa of Ecuador has already expressed concern about being the target of a coup and Bolivia will undoubtedly come under intense pressure as they are also preparing for an election later this year.

All this is occurring with an increased U.S. military commitment in Mexico with Plan Mérida which seeks to build on the lessons of Colombia; maintain in power a president whose economic and social policy are highly unpopular, but who relies on conflict, in this case the so-called war on the drug cartels, to maintain popularity. Parts of Mexico are literally under siege including, Michoacán, Ciudad Juarez, and Tijuana. The backdrop for this is a divided left, the PRD was the biggest looser in recent midterm elections, and social movements remains localized and unable to mount a national challenge.

None of these developments are forgone conclusions, but they nonetheless speak to the fact that conservative forces in Latin America and their allies in the U.S. are mounting a concerted counter offensive that could increase the potential for conflict in the region.

Perpetual War for Perpetual War

Perpetual War for Perpetual War

Get ready for a “lasting military presence” in Iraq

By Jeff Huber

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U.S. Army Col. Timothy R. Reese says it’s time for the U.S. to “declare victory” in Iraq and “go home.” It was time to declare victory and go home in January 2007, when the Bush administration decided to ignore the recommendations of the Iraq Study Group and charged off on its cockamamie “surge” strategy.

The original stated objective of the surge was political reconciliation in Iraq. By September 2007, when it was clear that the political objective was not in sight, Gen. David Petraeus pulled a bait-and-switch and announced that the military objectives of the surge were being met. Petraeus hagiographer Thomas E. Ricks slipped Freudian in February 2009 when he confessed that Petraeus’s goal was never to end the Iraq conflict but to trick Congress and the American public into extending it indefinitely by achieving short-term results though bribing Iraq’s militias.

According to Colonel Reese, chief of the Baghdad Operations Command Advisory Team, the surge’s real objectives still haven’t been met and never will be. In a recent memorandum, Reese asserts that “the ineffectiveness and corruption” of Iraq’s government ministries is “the stuff of legend.” The government is “failing to take rational steps to improve its electrical infrastructure and to improve their oil exploration, production and exports.” There is “no progress towards resolving the Kirkuk situation,” transition the Sons of Iraq into the Iraqi Security Forces “is not happening” and “the Kurdish situation continues to fester.” Violent political intimidation is “rampant.” Iraq’s security forces are a disaster. The officer corps is corrupt. Enlisted men are neglected and mistreated. Cronyism and nepotism are rampant. Laziness, lack of initiative, and absence of basic military discipline are endemic. Iraq’s military leadership is incapable of leading; it can’t plan ahead, it can’t stand up to the Shiite political parties, it can’t stick to its agreements.

The U.S. military in Iraq has accomplished “all that can be expected,” Reese says.

Gen. Ray Odierno’s propaganda officer, Lt. Col. Josslyn Aberlem, told the New York Times that Reese’s memo “does not reflect the official stance of the U.S. military.” The memo “Reflects one person’s personal view at the time we were first implementing the Security Agreement post-30 June,” Abaelem said. “Since that time many of the initial issues have been resolved and our partnerships with Iraqi Security Forces and [government of Iraq] partners now are even stronger than before 30 June.”

Right. We shaved our monkey in Iraq for six years and change, but since June 30 everything’s gone hunky dory.

Oddly enough, Defense Secretary Robert Gates said on July 29 that the relatively low levels of violence in Iraq might allow commanders to “moderately accelerate” troops reductions. He added, though, that Odierno would have to recommend speeding up the withdrawal before any decision is made. That pretty much tells you how things work in the Department of Defense. Gates isn’t in charge of his four-stars; they’re in charge of him.

Odie is on record as wanting to keep 35,000 U.S. troops in Iraq through 2015, so, predictably enough, on August 4 he rejected the idea of an accelerated pullout, saying that the surge hasn’t reached its goals yet and we need to “stay the course.” (Yes, he really used that moronic Bush-era mantra.) The Desert Ox doesn’t seem particularly concerned about the Status of Forces Agreement that requires all U.S. troops to leave Iraq by the end of 2011. Iraqi President Nuri al-Maliki doesn’t appear to be overly committed to the agreement either. In a July 23 appearance at the United States Institute of Peace in Washington, Maliki opened the door for indefinite U.S. presence in his country, saying, “If Iraqi forces need more training and support, we will reexamine the agreement at that time, based on our own national needs.”

Even Reese isn’t all that committed about U.S. forces leaving Iraq. In his memo, he says that during the withdrawal period the U.S. and Iraqi governments “should develop a new strategic framework agreement that would include some lasting military presence at 1-3 large training bases, airbases, or key headquarters locations.”

Lasting military presence. That’s been the objective of the neoconservatives all along. In their September 2009 manifesto Rebuilding America’s Defenses Cheney’s pals at the infamous Project for the New American Century argued, “While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.” The neocons’ Pax Americana vision has translated into the Pentagon’s “long war,” a strategy that does not seek to win wars but rather to create a sequel to the Cold War in which Islamofacism substitutes for communism and puny Iran, whose defense budget is less than one percent of ours, replaces the Soviet juggernaut.

That might be justified if military applications overseas were making us safer from terrorism, but they are not. In 2008 the highly respected national security analysts at Rand Corporation released a report titled How Terrorist Groups End. The study involved a comprehensive analysis of terror organizations that existed worldwide between 1968 and 2006. 83 percent of the groups ended as a result of policing and political action. Military force accounted for a mere 7 percent of success against terrorists. Rand analysts recommend that the best course of counterterrorism actions should involve “a light U.S. military footprint or none at all.” We’re almost certainly, as Donald Rumsfeld suspected in 2004, making multiple new terrorists for every one we capture or kill. We have discovered a new style of warfare: reverse attrition. The more enemy we attrite the more enemy we have.

All the talk about withdrawing from Iraq is an Orwellian card trick. Reese says our “lasting military presence” should not “include the presence of any combat forces save those for force protection needs or the occasional exercise.” Why would we need to leave noncombat forces behind? So they can cook and clean for the combat forces that provide them force protection? The exercises we might do with the Iraqis would involve practicing for the invasions of Iran and Syria, which is the real reason the warmongery wants to keep an enduring base of operations in Iraq. There’s no need to conduct defensive exercises. None of Iraq’s neighbors is capable of invading and occupying it or crazy enough to try.

President Obama’s promise to remove all U.S combat troops from Iraq by August 2010 was also a see-through canard. As Gareth Porter revealed in March, the “advisory and assistance brigades” that will remain after that date will in fact be combat brigades augmented by a handful of advisers and assistants. The Cold War justified defense spending for a half-century. Now, the Pentagon is trying to validate its existence with another long war in the Middle East.

Sun Tzu famously said, “No nation ever profited from a long war.” The 27- year Peloponnesian War ended Athens’ reign as a superpower. The Thirty Years’ War Balkanized the Holy Roman Empire, dividing German power among multiple smaller states. The 46-year Cold War forced the Soviet Union to change its name back to Russia.

Don’t expect us to withdraw from Iraq or the Bananastans any time soon. The American warmongery, a confluence of Big War, Big Energy, Big Jesus, Big Israel, Big Brainwash, and Big Brother, is trying to entangle us in a state of constant armed conflict that will carry on into the next American century. There’s no need for anyone to challenge our hegemony; all they have to do is sit back and watch us collapse under the weight of our own stupidity.

Commander Jeff Huber, U.S. Navy (Retired) writes at Pen and Sword. Jeff’s novel Bathtub Admirals(Kunati Books), a lampoon on America’s rise to global dominance, is on sale now.

Copyright © 2008 The American Conservative

The Cheney-Like Secrecy of the Obama White House

The Cheney-Like Secrecy of the Obama White House

By John Nichols

Those of us who proposed the impeachment of Vice President Dick Cheney for violating his oath of office and engaging in a Nixon-on-steroids spree of high crimes and misdemeanors began to recognize the abusive nature of the previous administration when Cheney refused to release details of the industry insiders with whom he met to craft energy policies.

The refusal of the Bush-Cheney administration to permit public review of White House visitor logs detailing who was meeting with the vice president's energy task force during the very first weeks of their tenure was a deliberate decision made to cloak dirty dealing by officials who were determined to serve corporate rather than public interests.

It also provided an early indicator that darker and dirtier deeds would eventually be done by Cheney and his compatriots. And they were.

So what should we make of the news that the Obama administration is now refusing to release White House visitor logs that detail meetings between members of the new administration and health-care industry insiders?

As Sharon Theimer, of The Associated Press, notes:

(The) administration's multibillion-dollar deals with hospitals and pharmaceutical companies have been made in private, and the results were announced after the fact. Both industries promised Obama cost savings in return for an expanded base of insured patients; beyond that, the public is in the dark about details.

In some ways, it resembles what his party criticized President George W. Bush for doing with oil and gas companies as Vice President Dick Cheney wrote a national energy plan in the early days of the Bush administration.

As the Bush White House did, the Obama White House is refusing to release visitor logs that would let people see everyone going in and out during the thick of discussions over major national policies.

There is a lot of talk about the fact that Obama has broken a campaign promise.

That's serious.

But far more serious is the perpetuation of practices of official secrecy that characterized the Bush-Cheney den of iniquity.

When administrations begin to enjoy the benefits of operating in the dark, they become disinclined to end the practice. They also begin to buy into the fantasy that keeping details from Congress and the people is the only way to get things done, as did Obama White House spokesman Reid Cherlin when he tried to explain away a lack of transparency by saying: "Here's what's happening: Groups that have steadfastly opposed reform in the past are coming to the table and making concessions -- because they know we can't wait another year to pass health insurance reform."

Actually, bad players are embracing bad compromises because they have made bad deals with the White House.

And, make no mistake, more bad things will happen.

Only whack jobs who believe that Barack Obama was birthed in Jakarta could imagine that this administration might ever be as corrupt as its predecessor. Bush and Cheney achieved Warren Harding levels of official crookedness.

However, bad-but-not-quite-Cheney-bad is an unacceptable standard.

Official secrecy, especially when it involves meetings by White House aides and representatives of corporate interests that face government regulation, is corrosive. It warps the official agenda and undermines the system of checks and balances -- making the legislative branch a weak second to a unitary executive.

Barack Obama promised when he sought the presidency to usher in a new era of openness and transparency. "We'll have the negotiations televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies," candidate Obama declared at a Pennsylvania campaign stop two months before the 2008 election.

Now, he is doing the opposite.

Worse yet, he is perpetuating the foul practices of the most corrupt administration in American history.

Economic collapse imminent

US cities criminalize homelessness

US cities criminalize homelessness

By Ali Ismail

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As the economic crisis continues to intensify, scores of US cities are enacting undemocratic laws that criminalize homelessness and trample on the rights of the growing number of homeless individuals and families who reside in these cities, according to a report released last month.

The level of homelessness has been increasing rapidly since 2007, and attacks on the democratic rights of homeless individuals are also on the increase, according to the report entitled, “Homes Not Handcuffs,” which was issued on July 13 by the National Law Center on Homelessness and Poverty (NLCHP) in coordination with the National Coalition for the Homeless (NCH).

In Denver and Atlanta, for example, 30 percent of the homeless populations are newly homeless. The report notes that 19 out of the 25 cities surveyed by the US Conference of Mayors for its annual Hunger and Homelessness study reported an increase in homelessness from 2007 to 2008, with the average increase around 12 percent. Home foreclosures and the economic crisis in general are contributing to skyrocketing levels of homelessness in many US cities, the report notes.

Based on data collected in 2007 and 2008, the law center demonstrates how homelessness is being criminalized in cities across United States. The report provides detailed summaries of how cities use undemocratic measures targeted specifically against homeless individuals.

Several of the most commonly used tactics to force homeless individuals off the streets are highlighted. These tactics include:

“Enactment and enforcement of legislation that makes it illegal to sleep, sit, or store personal belongings in public spaces in cities where people are forced to live in public spaces.

“Selective enforcement of more neutral laws, such as loitering, jaywalking, or open container laws, against homeless persons.

“Sweeps of city areas in which homeless persons are living to drive them out of those areas, frequently resulting in the destruction of individuals’ personal property such as important personal documents and medication.

“Enactment and enforcement of laws that punish people for begging or panhandling in order to move poor or homeless persons out of a city or downtown area.

“Enforcement of a wide range of so-called ‘quality of life’ ordinances related to public activities and hygiene (i.e. public urination) when no public facilities are available to people without housing.”

The report also notes the prevalence of city ordinances that criminalize homelessness. Of the 235 cities surveyed, 33 percent prohibit “camping” in certain city areas and 17 percent prohibit “camping” all together. Nearly 50 percent of cities prohibit loitering or begging in public places, and in 23 percent of cities, begging is prohibited anywhere within city limits.

Ten US cities that are particularly hostile towards homeless persons were listed in the “10 Meanest Cities” section of the report. These cities include Los Angeles, which was ranked in first place for the ruthless way in which the rights of homeless individuals and families are routinely violated. Orlando, Florida, Atlanta, Georgia, Honolulu, Hawaii, and Kalamazoo, Michigan were also in the top 10 list.

According to University of California Los Angeles (UCLA), Los Angeles was spending $6 million a year up until 2007 to employ extra police officers to patrol the city’s Skid Row area which has a substantial homeless population. This came at a time when the city allocated only $5.7 million for homeless services. The city also spent $3.6 million in 2007 on arresting and prosecuting 24 persons in the Skid Row area for “crimes” such as jaywalking which the report notes are rarely enforced in other parts of the city. The report notes the same amount of money could have been used to house over 200 homeless individuals. The homeless in Los Angeles have frequently suffered from police brutality as well.

“Police brutality against homeless people intensified during the crackdown on crime in Skid Row. In June 2007, the Los Angeles County Community Action Network reported one example: two L.A. Police officers attacked a petite homeless woman, who may have been mentally disabled, with clubs and pepper spray. Police reportedly beat her and tied her down.

“Though many business owners in the Skid Row area believe that the streets are cleaner and safer due to the Safer City Initiative, the changes come at a substantial cost to the homeless population. Advocates believe homeless residents have dispersed to areas without services. According to an Associated Press article, in January 2006, an estimated 1, 345 people were living on the streets in Skid Row. A year later, only 875 people remained.

“Moving homeless individuals from Skid Row not only takes them away from a familiar area, but also moves them farther from service providers. Around the time of the police crackdown on Skid Row the providers in surrounding neighborhoods, such as Santa Monica and Hollywood, noticed an increase in their homeless populations, a problem for which they were unprepared. Richard, a homeless man interviewed by Tidings Online, described the problem: ‘Unless you get [the homeless] a place to go, they’ve got to go somewhere... They’re going to disperse.’ You hit a bunch of marbles in the middle, they splatter.”

.In Orlando, the City Council passed a law prohibiting the sharing of food with 25 people or more in parks in the downtown area of the city.

“Shortly after the ordinance was passed, the ACLU sued the city on behalf of First Vagabonds Church and Orlando Food Not Bombs, two groups that share food with homeless individuals on a weekly basis ... While the litigation was ongoing, Eric Montanez of Food Not Bombs was arrested for serving ‘30 unidentified people food from a large pot utilizing a ladle.’ After being held for three hours, he was released on $250 bond and continued serving food. He explained that the government’s inability to provide for homeless people is the reason Food not Bombs and other organizations are helping homeless and hungry individuals. He believes the community should fill in the gaps the government leaves until the government takes on the responsibility. Montanez was eventually acquitted at trial.”

The law against sharing food can only be seen as a direct attack against the democratic rights of homeless individuals as there is no conceivable purpose for it other than to make life even more difficult for people living on the streets.

The situation confronting the homeless population in Atlanta isn’t any better.

“On August 2nd 2008, police officers in Atlanta began dressing as tourists in order to catch people ‘aggressively begging’ for money. This undercover effort was part of a ‘30-day crackdown’ conceived and implemented by the commander of the police, Maj. Khirus Williams, who, according to the Atlanta Journal-Constitution, had ‘received letters from visitors who said the begging was so bad that they were never going to come back to Atlanta.’

“The newspaper noted that while under normal circumstances a tourist typically did not return to testify in court against the defendant, Maj. Williams expressed hope that ‘having officers pose as tourists or office workers’ would result in more convictions because the officers were certain to testify. By August 22, 2008, the officers arrested 44 people for panhandling and warned another 51. The Washington Post reported in October 2008 that the sting resulted in 50 arrests.”

Not surprisingly, city officials are preoccupied with maintaining the profitability of Atlanta’s tourism industry rather than with alleviating the problems facing homeless individuals and families, or at least respecting their fundamental rights.

Kalamazoo, Michigan was also included in the “10 Meanest Cities” section of the report. The state of Michigan has undoubtedly been battered by the economic crisis. It currently has the highest official rate of unemployment in the US at over 15 percent. The report notes the homeless population of Kalamazoo has been subjected to targeted arrests and other methods used by officials to remove homeless individuals from public view.

“In the summer of 2007, several members of Michigan People’s Action were arrested for

sleeping in public parks following the enactment of an ordinance prohibiting such activities. In addition, homeless individuals who have been ticketed for sleeping in public parks have been unable to obtain housing. Those homeless individuals and Michigan People’s Action members who were ticketed or arrested for sleeping in public parks challenged their arrests in court. By early September 2008, all charges had been dropped against the homeless individuals and activists.

“During the same period, homeless advocates and homeless persons began having difficulty accessing the Kalamazoo Transportation Center (a public transportation bus station). Public Safety Chief James Mallery said that due to a large number of calls regarding drugs, fights, loitering, and panhandling, they were attempting to move people out of there that did not appear to be using the buses. However, Michigan People’s Action claimed that law enforcement was particularly targeting people who appeared to be homeless. Michigan People’s Action said that homeless people were being harassed at the Transportation Center by officers who asked for their identification and proof that they were waiting for a bus to arrive.

“Even after being urged by Michigan People’s Action to stop the police sweeps at the Transportation Center, the police continued to do so and arrested and jailed dozens of homeless people and activists for violation of the local anti-loitering law. Activists and the homeless individuals arrested in the Transportation Center challenged the arrests in court arguing the loitering law used to arrest them is unconstitutionally vague. Those charges were eventually dismissed. Kalamazoo has instituted a new set of transportation center rules. Michigan People’s Action is concerned these new rules will be used to continue to target people who appear to be homeless.”

The report discusses the how many of the laws enacted against homeless individuals violate their constitutional rights. Laws that prohibit begging, panhandling, or sharing food in public places often violate the right to free speech guaranteed by the First Amendment. Laws that prohibit sleeping in public spaces in cities where there are no alternatives for homeless individuals have been found by some courts to be in violation of the Eighth Amendment because it constitutes cruel or unusual punishment.

Sweeps on homeless persons that result in loss of property are rightfully considered by many to be an infringement on the right to be free from warrantless search and seizures. Many laws are also in violation of international laws related to human rights, including the right to freedom of movement.

The attack on the democratic rights of homeless individuals is part and parcel of the ruling elite’s assault on the democratic rights of the working class as a whole. By making homelessness a punishable offense, the capitalists have once again proven that they have no interest in addressing the root causes of homelessness-unemployment, poverty, mental illness, and addiction. As the economic crisis continues to escalate, even more people will be left without a home and treated like criminals rather than victims of American capitalism and its relentless focus on profit at the expense of human need.