Wednesday, March 13, 2013

How the US Public was Defrauded by the Hidden Cost of the Iraq War

George Bush sold the war as quick and cheap; it was long and costly. Even now, the US is paying billions to private contractors

When the US invaded Iraq in March 2003, the Bush administration estimated that it would cost $50-60bn to overthrow Saddam Hussein and establish a functioning government. This estimate was catastrophically wrong: the war in Iraq has cost $823.2bn between 2003 and 2011. Some estimates suggesting that it may eventually cost as much as $3.7tn when factoring in the long-term costs of caring for the wounded and the families of those killed.

The most striking fact about the cost of the war in Iraq has been the extent to which it has been kept "off the books" of the government's ledgers and hidden from the American people. This was done by design. A fundamental assumption of the Bush administration's approach to the war was that it was only politically sustainable if it was portrayed as near-costless to the American public and to key constituencies in Washington. The dirty little secret of the Iraq war – one that both Bush and the war hawks in the Democratic party knew, but would never admit – was that the American people would only support a war to get rid of Saddam Hussein if they could be assured that they would pay almost nothing for it.

The most obvious way in which the true cost of this war was kept hidden was with the use of supplemental appropriations to fund the occupation. By one estimate, 70% of the costs of wars in Iraq and Afghanistan between 2003 and 2008 were funded with supplemental or emergency appropriations approved outside the Pentagon's annual budget. These appropriations allowed the Bush administration to shield the Pentagon's budget from the cuts otherwise needed to finance the war, to keep the Pentagon's pet programs intact and to escape the scrutiny that Congress gives to its normal annual regular appropriations.

With the Iraq war treated as an "off the books" expense, the Pentagon was allowed to keep spending on high-end military equipment and cutting-edge technology. In fiscal terms, it was as if the messy wars in Afghanistan and Iraq were never happening.

More fundamentally, the Bush administration masked the cost of the war with deficit spending to ensure that the American people would not face up to its costs while President Bush was in office. Despite their recent discovery of outrage over the national debt, the Republicans followed the advice of Vice-President Dick Cheney that "deficits don't matter" and spent freely on domestic programs throughout the Bush years. The Bush administration encouraged the American people to keep spending and "enjoy life", while the government paid for the occupation of Iraq on a credit card they hoped never to have to repay.

Most Americans were not asked to make any sacrifice for the Iraq war, while its real costs were confined to the 1% of the population who fought and died there. As a result, the average American was never forced to confront whether pouring money borrowed from China into the corrupt Iraqi security services was worth it, or whether it made more sense to rebuild infrastructure in Diyala, rather than, say, Philadelphia.

One consequence of the way that the true costs of the Iraq war was hidden from the American people was an explosion of fraud, waste and abuse. The recent final report of the Special Inspector General for Iraq Reconstruction (Sigir) estimates that the US lost to corruption or waste at least $8bn of the $60bn devoted to reconstructing Iraq.

Much of the reconstruction expense had no useful political effect: as Spencer Ackerman has pointed out, Iraqi officials cannot point to a single completed project that the US managed during the course of the occupation. The hundreds of ill thought-out projects and half-baked ideas that marred the American reconstruction effort provides a powerful explanation for why the US campaign for "hearts and minds" never worked, and why Iraq is hardly a pro-American bastion in the Middle East today.

An occupation conducted through under-scrutinized emergency appropriations enabled dozens, if not hundreds, of private companies to act like pigs at the trough – wasting taxpayer dollars on frivolous expenses while the insurgency raged around them. These private companies were able to behave so rapaciously because they were so desperately needed by the US government to run the Iraq war without revealing its true cost to the American public.

Another factor that was kept hidden from the American public was the skyrocketing costs of deploying US troops abroad. According to a Congressional Research Service estimate (pdf), the average annual operational cost per US soldier in Iraq was $462,000 between 2005 and 2009. To control costs and avoid imposing a draft, the US resorted to a parallel army of private contractors, numbering 100,000 people or more at the height of the war.

Yet, this policy backfired, as private contractors cost nearly as much and wasted millions – by one estimate, losing $12m a day between the wars in Iraq and Afghanistan. The only advantage they had was that they allowed the American people to be lulled into thinking that the Iraq war had cost them nothing.

The extent to which the US hid the costs of the war by relying on private contractors has left a disastrous legacy within Iraq itself. Many of these contractors behaved recklessly; sometimes, they even shot at crowds when they felt trapped or threatened. Thus private military contracting help to turn the population even more against the US and the occupation.

Even after the US withdrawal, Iraq has had to contend with dozens of private security companies, many still under US contract, running operations in contravention of Iraqi law. An estimate in February 2012 revealed there were 109 separate private security companies, with 36,000 men under arms, still operating in Iraq months after the American army had gone home. While US attention has drifted from Iraq, the costs of this reckless war are still being incurred. The American embassy in Baghdad remains a heavily-armed fortress: a relic of the imperial ambitions that the US had in that country.

Through 2012, the US is projected to have spent $17.7bn (pdf) on police training and civilian reconstruction projects in Iraq. This at a time when hundreds of states and towns across the US face harsh budget cuts in essential services and care for their poor and sick.

The Iraq war provides many lessons, but among the most important is that the promise of a cheap and easy war never turns out to be true. The Bush administration sold the American people a bill of goods with Iraq, offering them a short and glorious war while secretly running up a tab that future generations will be left with. Along with Afghanistan, the war in Iraq added $1.4tn to the national debt.

The dishonesty of this approach is due to a fundamental fact about the United States: that while its leaders may have grand international ambitions, most Americans have no appetite for, or interest in, nation-building abroad. This mismatch between our leaders and ourselves means that our politicians will lie to us about running their wars on the cheap while finding ways to pass on the costs to those not yet born. That lesson should be remembered by any American who sees a future president promise, as George Bush did, that such embarking on such a conflict today will "lift a terrible threat from the lives of our children and grandchildren".

Staring Armageddon In The Face But Hiding It With Official Lies

According to the Bureau of Labor Statistics, the US economy created 236,000 new jobs in February. If you believe that, I have a bridge in Brooklyn that I’ll let you have at a good price.

Where are these alleged jobs? The BLS says 48,000 were created in construction. That is possible, considering that revenue-starved real estate developers are misreading the housing situation. [1]

Then there are 23,700 new jobs in retail trade, which is hard to believe considering the absence of consumer income growth and the empty parking lots at shopping malls.

The real puzzle is 20,800 jobs in motion picture and sound recording industries. This is the first time in the years that I have been following the jobs reports that there has been enough employment for me to even notice this category.

The BLS lists 10,900 jobs in accounting and bookkeeping, which, as it is approaching income tax time, is probably correct; 21,000 jobs in temporary help and business support services; 39,000 jobs in health care and social assistance; and 18,800 jobs in the old standby–waitresses and bartenders.

That leaves about 50,000 jobs sprinkled around the various categories, but not in numbers large enough to notice.

The presstitute media attributed the drop in the headline unemployment rate (U3) to 7.7% from 7.9% to the happy jobs report. But Rex Nutting at Market Watch says that the unemployment rate fell because 130,000 unemployed people who have been unable to find a job and became discouraged were dropped out of the U3 measure of unemployment. The official U6 measure which counts some discouraged workers shows an unemployment rate of 14.3%. Statistician John Williams’ measure, which counts all discourage workers (people who have ceased looking for a job), is 23%.

In other words, the real rate of unemployment is 2 to 3 times the reported rate.

Nutting believes that the U3 unemployment rate has become too politicized to have any meaning. He suggests using instead the work force participation rate. This rate is falling substantially, reflecting the discouragement that occurs from inability to find jobs.

John Williams ( says that distortions in seasonal factor adjustments overstate monthly payroll employment by about 100,000 jobs. The jobs data that is not seasonally adjusted shows about 1.5 million fewer jobs in the economy.

In a recent communication, statistician John Williams ( reports that the rigged official annual rate of consumer inflation (CPI) of 1.6% is in fact, as measured by the official US government methodology of 1990, 9.2%. In other words, the rate of inflation is 5.75 times greater than the reported rate. If Williams is correct, the interest rate on bonds is extremely negative.

Over the years the official measure of inflation has been altered in two ways. One is the introduction of substitution for what formerly was a constant weighted basket of goods. In the former measure, if a price of an item in the basket (index) rose, the CPI rose by the weight of that item in the basket.

In the substitution-based measure, if a price of an item in the basket goes up, the item is removed from the basket, and a cheaper item is put in its place. For example, if the price of New York strip steak rises, the new CPI will substitute the price of a cheaper cut.

In this new measure, inflation is held down by measuring not a fixed standard of living but a declining standard of living.

The other adjustment used to restrain the measure of inflation is to re-classify many price rises as “quality improvements.” Price rises declared to be quality improvements do not translate into a higher measure of inflation. In other words, if a product rises in price, the price increase or some portion of it can be assigned to improved quality, not to a rise in component or energy costs. As the incentive is to hold down the inflation measure in order to save money for the government on Social Security cost-of-living-adjustments, quality improvements are over-estimated.

Consumers have to pay the higher prices, and as incomes, except for the 1 percent, are not growing, higher product prices, regardless of whether they are or are not quality improvements, mean a lower standard of living for the 99 percent.

The understated new measure of inflation allows the government to show real GDP growth and thus the end of the December 2007 recession, and it allows the government to show in the latest report real retail sales again matching the pre-recession level. However, when measured correctly, as by statistician John Williams, the true picture of retail sales shows a steep decline from 2007 through 2009 and bottom bouncing since.

The reason real retail sales cannot recover is that real average weekly earnings continues its downward path. Earlier in this new century, the lack of income growth for the bulk of the US population was masked by a rise in consumer debt. Americans borrowed to spend, and this kept the economy going until the point was reached that consumers had more debt than they could service.

John Williams report of real average weekly earnings shows that Americans are taking home less purchasing power than they did in the 1960s and 1970s.

Reflecting the dollar’s loss of purchasing power, the price of gold and silver in dollars has risen dramatically during the Bush and Obama regimes.

For the last year or two the Federal Reserve and its dependent banks have operated to cap the price of gold at around $1,750. They do this by selling naked shorts in the paper speculative gold market.

There are two gold markets. One is a market for physical possession by individuals and central banks. The rising demand in the physical bullion market points to a rising price for gold.

The other market is the speculative paper market in which financial institutions bet on the future gold price. By placing large amounts of shorts, this market can be used to suppress price rises in the physical market. The Federal Reserve, which can print money without limit, can cover any losses on its agents’ paper contracts.

It is important to the Federal Reserve’s low interest rate policy to suppress the bullion price. If the prices of gold and silver continue to rise relative to the US dollar, the Fed cannot keep the prices of bonds high and interest rates low. If the dollar is widely perceived to be declining in value in relation to gold, the price of dollar-denominated assets will also decline, including bonds. If the dollar loses value, the Fed loses control over interest rates, and the US financial bubble pops, with hell to pay.

To forestall armageddon, the Fed and its dependent banks cap the price of gold.

The Fed’s fix is temporary, and as the Fed continues to create ever more dollars, the price of gold will eventually escape the Fed’s control as will interest rates and inflation.

The Fed has produced a perfect storm that could consume the US and perhaps the entire Western world.

Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week, and the Scripps Howard News Service. He has had numerous university appointments. His latest book, The Failure Of Laissez Faire Capitalism And Economic Dissolution Of The West [2], is available online.

The Chart That Proves That The Mainstream Media Is Lying To You About Unemployment

Go To Original

The mainstream media is absolutely giddy that the U.S. unemployment rate has hit a "four-year low" of 7.7 percent.  But is unemployment in the United States actually going down?  After all, you would think that it should be.  The Obama administration has "borrowed" more than 6 trillion dollars from future generations of Americans, interest rates have been pushed to all-time lows, and the Federal Reserve has been wildly printing more money in a desperate attempt to "stimulate" the economy.  So have those efforts been successful?  Well, according to the mainstream media, the U.S. unemployment rate is falling steadily.  Headlines all over the nation boldly declared that "236,000 jobs" were added to the economy in February, but what they didn't tell you was that the number of Americans "not in the labor force" rose by 296,000.  And that is how they are getting the unemployment rate to go down - by pretending that huge numbers of unemployed Americans don't want jobs.  Sadly, as you will see below, the truth is that the percentage of working age Americans that have a job is just 0.1% higher than it was exactly three years ago.  And we have not even come close to getting back to where we were before the last economic crisis.  For example, more than 146 million Americans were employed back in 2007.  But today, only 142.2 million Americans have a job even though our population has grown steadily since then.  So where in the world is this "economic recovery" that they keep talking about?

At this point, the "unemployment rate" has become so meaningless that it really isn't even worth paying much attention to.  If you really want to know what the employment picture looks like in the United States, you need to look at the employment-population ratio.

As Wikipedia tells us, many economists consider the employment-population ratio to be far superior to other measurements of employment...

The Organization for Economic Co-operation and Development defines the employment rate as the employment-to-population ratio. The employment-population ratio is many American economist's favorite gauge of the American jobs picture. According to Paul Ashworth, chief North American economist for Capital Economics, "The employment population ratio is the best measure of labor market conditions." This is a statistical ratio that measures the proportion of the country's working-age population (ages 15 to 64 in most OECD countries) that is employed. This includes people that have stopped looking for work.
A chart of the employment-population ratio in the United States over the past several years is posted below...

Employment-Population Ratio 2013

As you can see, the percentage of Americans with a job fell from about 63 percent to below 59 percent during the last economic crisis.  Since that time, it has not risen back above 59 percent.  This is the first time in the post-World War II era that we have not seen the employment rate bounce back following a recession.  At this point, the employment-population ratio has been below 59 percent for 42 months in a row.

Yes, we should be thankful that things have stabilized, but as you can see there has been no recovery.  The percentage of Americans with a job is essentially exactly where it was three years ago.  Despite the trillions of dollars that the U.S. government has borrowed, and despite the reckless money printing that the Federal Reserve has been doing, the employment situation in the U.S. has not turned around.

Data for the employment-population ratio from the beginning of 2008 is posted below...

2008-01-01 62.9

2008-02-01 62.8

2008-03-01 62.7

2008-04-01 62.7

2008-05-01 62.5

2008-06-01 62.4

2008-07-01 62.2

2008-08-01 62.0

2008-09-01 61.9

2008-10-01 61.7

2008-11-01 61.4

2008-12-01 61.0

2009-01-01 60.6

2009-02-01 60.3

2009-03-01 59.9

2009-04-01 59.8

2009-05-01 59.6

2009-06-01 59.4

2009-07-01 59.3

2009-08-01 59.1

2009-09-01 58.7

2009-10-01 58.5

2009-11-01 58.6

2009-12-01 58.3

2010-01-01 58.5

2010-02-01 58.5

2010-03-01 58.5

2010-04-01 58.7

2010-05-01 58.6

2010-06-01 58.5

2010-07-01 58.5

2010-08-01 58.5

2010-09-01 58.5

2010-10-01 58.3

2010-11-01 58.2

2010-12-01 58.3

2011-01-01 58.3

2011-02-01 58.4

2011-03-01 58.4

2011-04-01 58.4

2011-05-01 58.4

2011-06-01 58.2

2011-07-01 58.2

2011-08-01 58.3

2011-09-01 58.4

2011-10-01 58.4

2011-11-01 58.5

2011-12-01 58.6

2012-01-01 58.5

2012-02-01 58.6

2012-03-01 58.5

2012-04-01 58.5

2012-05-01 58.6

2012-06-01 58.6

2012-07-01 58.5

2012-08-01 58.4

2012-09-01 58.7

2012-10-01 58.7

2012-11-01 58.7

2012-12-01 58.6

2013-01-01 58.6

2013-02-01 58.6

So is there anyone out there that still wants to insist that the employment picture in the United States is getting significantly better?

Anyone that wants to claim that "unemployment is going down" should at least wait until the unemployment-population ratio gets back up to 59 percent.  Otherwise they just look foolish.

Yes, the Dow is at an all-time high right now.  But a bubble is always the biggest right before it bursts.

Most Americans understand that the Dow has been pumped up with all of the funny money that the Fed has been printing.  Most Americans understand that the stock market really does not accurately reflect the health of the U.S. economy as a whole.

Just consider these numbers...

-The number of homeless people sleeping in homeless shelters in New York City has increased by 19 percent over the past year.

-The number of Americans on food stamps has risen from 32 million to 47 million while Barack Obama has been in the White House.

-According to the U.S. Census Bureau, more than 146 million Americans are either "poor" or "low income" at this point.

-Median household income in the United States has fallen for four consecutive years.

No, the truth is that everything is most definitely not fine.

If everything is fine, then why did the Federal Reserve inject another 100 billion dollars into foreign banks during the last full week of February?

The U.S. government and the Federal Reserve are desperately trying to prop up the entire global economy.  Unfortunately, the global financial system has been built on a foundation of sand and the tide is coming in.

Back in 2008, a derivatives crisis was one of the primary causes of the worst financial panic since the Great Depression.

So did we learn our lesson?

No, the boys on Wall Street are back at it again as a recent article by Jim Armitage described...

Historically, stock markets, being driven by humans, have tended to have a similar length memory of catastrophes, before making the same dumb mistakes again.

But it hasn't even been five years since derivatives (on that occasion based on daft mortgages) blew up the world, and yet these exotic creatures have already returned. With a vengeance.

Research from Thomson Reuters declared that banks were creating more derivatives known as asset-backed securities than at any time since before the Lehman Brothers crash. Of those, 22 percent were made up of – and forgive me the alphabet soup here – CDOs and CLOs. The very type of derivatives that exploded last time. At this stage last year, only 6 percent fell into those categories.

In other words, banks are creating more of the riskiest types of the riskiest products.
At some point, we will have another derivatives crisis even worse than the last one.

When that happens, financial markets all over the globe will crash, economic activity will grind to a standstill and unemployment will go skyrocketing once again.

But as you saw above, we have never even come close to recovering from the last crisis.

So you can believe the mind-numbing propaganda that the mainstream media is trying to feed you if you want.  Unfortunately, the reality of the matter is that we have not recovered from the last major economic crisis, and another one is rapidly approaching.

I hope that you are getting ready.

How Deregulation Resurrected American Economic Insecurity

The US might not be in a Great Depression, but economic insecurity has nevertheless returned to America.

John N. Gray, a distinguished intellect and retired professor of intellectual history at the London School of Economics, disagrees with the view that “the end of history” has placed humanity on a course of ethical and economic progress. History, Gray believes, is not progressing to a higher stage. Instead, humanity is repeating the same follies and is destined to endure the same disasters. It is the Enclosures, the Repeal of the Corn Laws, and the Poor Law Act of 1834 all over again.

The problem is humans themselves. They are not questioning beings. “Human beings use the power of scientific knowledge to assert and defend the values and goals they already have.” Instead of ethics and politics having advanced with the growth of knowledge, we are experiencing today state terror and murder on unprecedented scale as Washington kills people with drones and invasions in seven countries and threatens others. The US claims to be the democratic “light unto the world,” the “indispensable nation,” but it has resurrected in violation of its own law and international law the torture dungeons of the unaccountable governments of medieval Europe.

Few people see the disconnect between the propaganda about the goodness of America and the evil that its government practices. Torture was banned. Its practice was made the act of a war criminal government. But the Bush and Obama regimes have resurrected torture as a defense of the state against citizens who reveal its crimes and against those who resist its aggression.

The CIA official who revealed that the US government was torturing detainees in violation of US and international law, John Kiriakou, was subjected to wrongful prosecution and sentenced to prison. The elected officials who approved the torture and those who conducted the torture remain free of all charges to torture again.

Bradley Manning, the US soldier who did his duty under the military code and revealed US war crimes that were ignored by his superiors had all of his constitutional rights violated and is now being tried on trumped-up and false charges. The US government claims that by telling the truth Manning aided the “enemies of the United States.”

The US government is so corrupt that it doesn’t realize the self-damnation of declaring the truth to be against it. Some “light unto the world” Washington is.

The myths to which Americans subscribe are resulting in their social, political, and economic destruction. In False Dawn: The Delusions Of Global Capitalism [1], John Gray lays out the destructive consequences of the free market ideology.

Gray demonstrates that the libertarian belief that free markets are something that the government suppresses and takes away from us is contradicted by the historical fact that “free markets are creatures of state power, and persist only so long as the state is able to prevent human needs for security and the control of economic risk from finding political expression.”

Free unregulated markets have existed only during short periods of history when state power and economic conditions were conducive to the imposition of unregulated markets. Unregulated markets existed for awhile in Victorian England, and Clinton, Bush, Obama, Thatcher and politicians in Australia, and New Zealand have removed regulation from various economic activities from the 1980s through the present.

The evidence is in and piles up daily. Instability is on the rise, and with it has come economic insecurity. Homelessness is increasing. In the last decade, New York City has experienced a 73 percent increase in homelessness, while the net worth of the city’s mayor has risen to $27 billion. [2] Deregulation of the financial system produced such massive instability that the Federal Reserve had to lend the banks $16 trillion (a sum equal to US national debt). The Federal Reserve is in the fourth year of monetizing $1 trillion annually of US debt, raising the specter of dollar devaluation and inflation. Once great manufacturing cities, such as Detroit, are in steep decline. Real interest rates are negative, depriving retirees of interest income. The high unemployment rate of recent university graduates, despite an alleged economic recovery, proves that education is no longer the answer. Millions of jobs have disappeared. Unemployment is high. Poverty has increased as has the number of Americans on food stamps. The once vibrant American middle class is disappearing. The blue-collar working class is being proletarianized. Labor arbitrage across national borders has destroyed millions of US manufacturing and professional service jobs such as software engineering. What was formerly the incomes of millions of Americans was turned into incomes for Chinese, Indians, and into capital gains for shareholders and mega-million dollar bonuses for the corporate CEOs who offshored the Americans’ jobs and banked the lower labor costs as profits. One result has been a massive increase in US income and wealth inequality. The US now has the worst economic inequality of all developed countries and one of the worst in the entire world. This 6 minute video will give you a visual picture: [3] Another result has been the shrinking of the American consumer market and the reliance on debt instead of income gains to keep the economy going, an expedient now exhausted by the high debt levels of American households.

The lost tax revenues from offshoring now threaten social institutions put in place decades ago in order to reduce economic insecurity and improve social cohesion. Social Security and Medicare are under attack, but not the wars that are the vehicle for spreading US hegemony and “democratic capitalism.” Even the concept of a career is vanishing as the pace of economic instability forces people into ever different jobs if they can find replacements for the ones they lose. Free unregulated markets disconnect economic activity from human well-being. As Gray says, markets are supposed to serve man, not man the market.

The neoconservative belief that America possesses the only true way–”democratic capitalism”–is a delusion. Gray shows that “democracy and the free market are rivals, not allies.” Free markets are not sustainable in a democracy, because free markets erode stability, security, and social cohesion. Free markets existed for a short time in Victorian England, because “the franchise was small and the overwhelming majority of the population was excluded from political participation.” Gray concludes that the American project of constructing a worldwide free market in an age of democratic government requires the instabilities and insecurities that free markets create to be protected from democratic politics and insulated from correction and reform.

We see everywhere in the West the effort to insulate the political process from the people it governs. In the US, the two political parties represent the few powerful private interests that supply their campaign funds. In the EU, Brussels is using the sovereign debt crisis to compromise the sovereignty of the member countries and remove their accountability to the people. In the US, Homeland Security has purchased a billion rounds of ammunition and 3,000 tanks. These purchases are not directed at the rare or nonexistent terrorist, but at the US population. They are Washington’s response to the social and political instability for which deregulation has set the stage.

Gray concludes that a global free market is a project destined to fail, and its casualty list will be long. Insecurities will rise everywhere as globalism sets countries against one another in geo-political struggles to control dwindling natural resources that no country or institution has any responsibility to conserve. History is returning, and the neoconservatives will be remembered, if at all, as another utopian movement, a collection of bloody fools.

Gray’s conclusion is consistent with the trends that Gerald Celente forecasts: currency wars, trade wars, political upheavals, and hot wars.

Libertarians will be the last to comprehend that the return of crony capitalism, robber barons, and economic insecurity is the direct consequence of a quarter century of deregulation. As I show in my new book, The Failure of Laissez Faire Capitalism And Economic Erosion Of The West [4], it is the failure of the latest laissez faire experiment that has saddled us with crony capitalism. Monopoly concentration and rule by the few, not Libertarian nirvana, is what deregulation and unbridled greed produce.

New York's Homelessness Worst Since The Great Depression

State and local governments nationwide have struggled to accommodate a homeless population that has changed in recent years - now including large numbers of families with young children. As the WSJ reports, more than 21,000 children - an unprecedented 1% of the city's youth - slept each night in a city shelter in January, an increase of 22% in the past year; as homeless families now spend more than a year in a shelter, on average, for the first time since 1987. New York City has seen one of the steepest increases in homeless families in the past decade, advocates said, growing 73% since 2002, and "is facing a homeless crisis worse than any time since the Great Depression."

Homeless advocates said the Obama administration has focused on more visible problems, such as those sleeping on the streets, taking resources away from families. The steep rise has reignited questions about whether New York's economic turnaround of the past two decades has helped the city's poorest residents as they note (despite today's Dow record highs), "the economy is nowhere near where it was."

The blame apparently lies at the cessation of 'entitlements' as the DHS adds, since the end - in Spring 2011 - of a state-funded program that subsidized rent for people leaving shelters; homeless families have gone up 35%; but they also added that the city was working to find employment for the homeless, "a long-term solution." Boston and Washington DC are also seeing homeless numbers surge.

Via WSJ,
An average of more than 50,000 people slept each night in New York City's homeless shelters for the first time in January, a record that underscores an unsettling national trend: a rising number of families without permanent housing.

Families have become a larger share of the nation's homeless population, growing 1.4% from 2011 to 2012, after their numbers fell as the economy emerged from recession.


More than 21,000 children—an unprecedented 1% of the city's youth—slept each night in a city shelter in January, an increase of 22% in the past year, the report said, while homeless families now spend more than a year in a shelter, on average, for the first time since 1987. In January, an average of 11,984 homeless families slept in shelters each night, a rise of 18% from a year earlier.

"New York is facing a homeless crisis worse than any time since the Great Depression," said Mary Brosnahan, president of the Coalition for the Homeless.


New York City has seen one of the steepest increases in homeless families in the past decade, advocates said, growing 73% since 2002.


The steep rise has reignited questions about whether New York's economic turnaround of the past two decades has helped the city's poorest residents.


"The economy is nowhere near where it was," said Seth Diamond, commissioner of the city's Department of Homeless Services. He pointed to the end of a state-funded program that subsidized rent for people leaving shelters, which ended in spring 2011; homeless families have gone up 35% since, according to shelter records.


Wholesale Foreclosure Sales Planned

The U.S. federal government is making plans to sell more than 250,000 foreclosure homes at wholesale prices in bulk to a series of investor-backed firms in an effort to speed up the recovery of the housing market and artificially push home prices higher.

The plan comes on the heals of a pilot program that sold homes to investor led groups in a half a dozen states, most seriously damaged by the real estate collapse. The government has made a series of efforts to aid the housing market, including efforts to refinance underwater homeowners without regard to loan to value levels, but few of the programs has actually shown much success to aid the market, which has seen home prices decline for seven years in most areas of the country until recently.

The Fannie Mae program will be implemented to sell off assets in the form of either pool sales or joint ventures. Realtors are criticizing the Federal Housing Finance Agency (FHFA) in its quiet effort to sell foreclosed homes in package deals. The REO properties, like those that have already been sold to investor groups, will have to be rented and not resold for a period of time and may not be immediately “flipped” for a profit.

A large scale sell-off of foreclosures held by Fannie Mae would reduce the number of vacant and foreclosed homes waiting to be sold throughout the country, and could also act to artificially push home values higher as a result of fewer homes listed for consumers in the general marketplace. However, it would come at an expensive price as the Federal Reserve buys home mortgages that have defaulted.

The FHFA says that an excessive inventory of distressed homes reduces home values and damages the housing market. Fannie Mae and Freddie Mac jointly completed 134,2000 foreclosure preventions in the third quarter of last year to bring the total to more than 2.5 million since the government took over both of the nation’s largest mortgage lenders in September 2008. However, more than 7-million homes have been foreclosed and millions more are expected to lose their homes in coming years.

Foreclosure actions were filed against 1,836,634 U.S. residential properties in 2012, a 3% drop from 2011 and a 36% decline since the foreclosure crisis peak at 2.9 million homes in 2010, according to RealtyTrac. The drop off in foreclosure actions, however, is still higher than at any other time in the nation’s history and is projected to continue until the U.S. economy improves. Foreclosure activity increased in 25 states during the year and dropped in the other 25 states. Foreclosures increased in New Jersey the most, 55%, and Florida, 53%, but fell by more than half in Nevada, 57%, because of a new law that went into effect barring lenders from filing foreclosure paperwork without proof of holding title to the property.

Mission Unaccomplished: End Times for the American Empire

 Why the Invasion of Iraq Was the Single Worst Foreign Policy Decision in American History

Go To Original

I was there. And “there” was nowhere. And nowhere was the place to be if you wanted to see the signs of end times for the American Empire up close. It was the place to be if you wanted to see the madness -- and oh yes, it was madness -- not filtered through a complacent and sleepy media that made Washington’s war policy seem, if not sensible, at least sane and serious enough. I stood at Ground Zero of what was intended to be the new centerpiece for a Pax Americana in the Greater Middle East.
Not to put too fine a point on it, but the invasion of Iraq turned out to be a joke. Not for the Iraqis, of course, and not for American soldiers, and not the ha-ha sort of joke either. And here’s the saddest truth of all: on March 20th as we mark the 10th anniversary of the invasion from hell, we still don’t get it. In case you want to jump to the punch line, though, it’s this: by invading Iraq, the U.S. did more to destabilize the Middle East than we could possibly have imagined at the time. And we -- and so many others -- will pay the price for it for a long, long time.

The Madness of King George

It’s easy to forget just how normal the madness looked back then. By 2009, when I arrived in Iraq, we were already at the last-gasp moment when it came to salvaging something from what may yet be seen as the single worst foreign policy decision in American history. It was then that, as a State Department officer assigned to lead two provincial reconstruction teams in eastern Iraq, I first walked into the chicken processing plant in the middle of nowhere.

By then, the U.S. “reconstruction” plan for that country was drowning in rivers of money foolishly spent. As the centerpiece for those American efforts -- at least after Plan A, that our invading troops would be greeted with flowers and sweets as liberators, crashed and burned -- we had managed to reconstruct nothing of significance. First conceived as a Marshall Plan for the New American Century, six long years later it had devolved into farce.

In my act of the play, the U.S. spent some $2.2 million dollars to build a huge facility in the boondocks. Ignoring the stark reality that Iraqis had raised and sold chickens locally for some 2,000 years, the U.S. decided to finance the construction of a central processing facility, have the Iraqis running the plant purchase local chickens, pluck them and slice them up with complex machinery brought in from Chicago, package the breasts and wings in plastic wrap, and then truck it all to local grocery stores. Perhaps it was the desert heat, but this made sense at the time, and the plan was supported by the Army, the State Department, and the White House.

Elegant in conception, at least to us, it failed to account for a few simple things, like a lack of regular electricity, or logistics systems to bring the chickens to and from the plant, or working capital, or... um... grocery stores. As a result, the gleaming $2.2 million plant processed no chickens. To use a few of the catchwords of that moment, it transformed nothing, empowered no one, stabilized and economically uplifted not a single Iraqi. It just sat there empty, dark, and unused in the middle of the desert. Like the chickens, we were plucked.

In keeping with the madness of the times, however, the simple fact that the plant failed to meet any of its real-world goals did not mean the project wasn't a success. In fact, the factory was a hit with the U.S. media. After all, for every propaganda-driven visit to the plant, my group stocked the place with hastily purchased chickens, geared up the machinery, and put on a dog-and-pony, er, chicken-and-rooster, show.

In the dark humor of that moment, we christened the place the Potemkin Chicken Factory. In between media and VIP visits, it sat in the dark, only to rise with the rooster’s cry each morning some camera crew came out for a visit. Our factory was thus considered a great success. Robert Ford, then at the Baghdad Embassy and now America's rugged shadow ambassador to Syria, said his visit was the best day out he enjoyed in Iraq. General Ray Odierno, then commanding all U.S. forces in Iraq, sent bloggers and camp followers to view the victory project. Some of the propaganda, which proclaimed that “teaching Iraqis methods to flourish on their own gives them the ability to provide their own stability without needing to rely on Americans,” is still online (including this charming image of American-Iraqi mentorship, a particular favorite of mine).

We weren’t stupid, mind you. In fact, we all felt smart and clever enough to learn to look the other way. The chicken plant was a funny story at first, a kind of insider’s joke you all think you know the punch line to. Hey, we wasted some money, but $2.2 million was a small amount in a war whose costs will someday be toted up in the trillions. Really, at the end of the day, what was the harm?

The harm was this: we wanted to leave Iraq (and Afghanistan) stable to advance American goals. We did so by spending our time and money on obviously pointless things, while most Iraqis lacked access to clean water, regular electricity, and medical or hospital care. Another State Department official in Iraq wrote in his weekly summary to me, “At our project ribbon-cuttings we are typically greeted now with a cursory ‘thank you,’ followed by a long list of crushing needs for essential services such as water and power.” How could we help stabilize Iraq when we acted like buffoons? As one Iraqi told me, “It is like I am standing naked in a room with a big hat on my head. Everyone comes in and helps put flowers and ribbons on my hat, but no one seems to notice that I am naked.”

By 2009, of course, it should all have been so obvious. We were no longer inside the neocon dream of unrivaled global superpowerdom, just mired in what happened to it. We were a chicken factory in the desert that no one wanted.

Time Travel to 2003

Anniversaries are times for reflection, in part because it’s often only with hindsight that we recognize the most significant moments in our lives. On the other hand, on anniversaries it’s often hard to remember what it was really like back when it all began. Amid the chaos of the Middle East today, it’s easy, for instance, to forget what things looked like as 2003 began. Afghanistan, it appeared, had been invaded and occupied quickly and cleanly, in a way the Soviets (the British, the ancient Greeks…) could never have dreamed of. Iran was frightened, seeing the mighty American military on its eastern border and soon to be on the western one as well, and was ready to deal. Syria was controlled by the stable thuggery of Bashar al-Assad and relations were so good that the U.S. was rendering terror suspects to his secret prisons for torture.

Most of the rest of the Middle East was tucked in for a long sleep with dictators reliable enough to maintain stability. Libya was an exception, though predictions were that before too long Muammar Qaddafi would make some sort of deal. (He did.) All that was needed was a quick slash into Iraq to establish a permanent American military presence in the heart of Mesopotamia. Our future garrisons there could obviously oversee things, providing the necessary muscle to swat down any future destabilizing elements. It all made so much sense to the neocon visionaries of the early Bush years. The only thing that Washington couldn’t imagine was this: that the primary destabilizing element would be us.

Indeed, its mighty plan was disintegrating even as it was being dreamed up. In their lust for everything on no terms but their own, the Bush team missed a diplomatic opportunity with Iran that might have rendered today’s saber rattling unnecessary, even as Afghanistan fell apart and Iraq imploded. As part of the breakdown, desperate men, blindsided by history, turned up the volume on desperate measures: torture, secret gulags, rendition, drone killings, extra-constitutional actions at home. The sleaziest of deals were cut to try to salvage something, including ignoring the A.Q. Khan network of Pakistani nuclear proliferation in return for a cheesy Condi Rice-Qaddafi photo-op rapprochement in Libya.

Inside Iraq, the forces of Sunni-Shia sectarian conflict had been unleashed by the U.S. invasion. That, in turn, was creating the conditions for a proxy war between the U.S. and Iran, similar to the growing proxy war between Israel and Iran inside Lebanon (where another destabilizing event, the U.S.-sanctioned Israeli invasion of 2006, followed in hand). None of this has ever ended. Today, in fact, that proxy war has simply found a fresh host, Syria, with multiple powers using “humanitarian aid” to push and shove their Sunni and Shia avatars around.

Staggering neocon expectations, Iran emerged from the U.S. decade in Iraq economically more powerful, with sanctions-busting trade between the two neighbors now valued at some $5 billion a year and still growing. In that decade, the U.S. also managed to remove one of Iran’s strategic counterbalances, Saddam Hussein, replacing him with a government run by Nouri al-Malaki, who had once found asylum in Tehran.

Meanwhile, Turkey is now engaged in an open war with the Kurds of northern Iraq. Turkey is, of course, part of NATO, so imagine the U.S. government sitting by silently while Germany bombed Poland. To complete the circle, Iraq’s prime minister recently warned that a victory for Syria's rebels will spark sectarian wars in his own country and will create a new haven for al-Qaeda which would further destabilize the region.

Meanwhile, militarily burnt out, economically reeling from the wars in Iraq and Afghanistan, and lacking any moral standing in the Middle East post-Guantanamo and Abu Ghraib, the U.S. sat on its hands as the regional spark that came to be called the Arab Spring flickered out, to be replaced by yet more destabilization across the region. And even that hasn’t stopped Washington from pursuing the latest version of the (now-nameless) global war on terror into ever-newer regions in need of destabilization.

Having noted the ease with which a numbed American public patriotically looked the other way while our wars followed their particular paths to hell, our leaders no longer blink at the thought of sending American drones and special operations forces ever farther afield, most notably ever deeper into Africa, creating from the ashes of Iraq a frontier version of the state of perpetual war George Orwell once imagined for his dystopian novel 1984. And don’t doubt for a second that there is a direct path from the invasion of 2003 and that chicken plant to the dangerous and chaotic place that today passes for our American world.

Happy Anniversary

On this 10th anniversary of the Iraq War, Iraq itself remains, by any measure, a dangerous and unstable place. Even the usually sunny Department of State advises American travelers to Iraq that U.S. citizens “remain at risk for kidnapping... [as] numerous insurgent groups, including Al Qaida, remain active...” and notes that “State Department guidance to U.S. businesses in Iraq advises the use of Protective Security Details.”

In the bigger picture, the world is also a far more dangerous place than it was in 2003. Indeed, for the State Department, which sent me to Iraq to witness the follies of empire, the world has become ever more daunting. In 2003, at that infamous “mission accomplished” moment, only Afghanistan was on the list of overseas embassies that were considered “extreme danger posts.” Soon enough, however, Iraq and Pakistan were added. Today, Yemen and Libya, once boring but secure outposts for State’s officials, now fall into the same category.

Other places once considered safe for diplomats and their families such as Syria and Mali have been evacuated and have no American diplomatic presence at all. Even sleepy Tunisia, once calm enough that the State Department had its Arabic language school there, is now on reduced staff with no diplomatic family members resident. Egypt teeters.

The Iranian leadership watched carefully as the American imperial version of Iraq collapsed, concluded that Washington was a paper tiger, backed away from initial offers to talk over contested issues, and instead (at least for a while) doubled-down on achieving nuclear breakout capacity, aided by the past work of that same A.Q. Khan network. North Korea, another A.Q. Khan beneficiary, followed the same pivot ever farther from Washington, while it became a genuine nuclear power. Its neighbor China pursued its own path of economic dominance, while helping to “pay” for the Iraq War by becoming the number-one holder of U.S. debt among foreign governments. It now owns more than 21% of the U.S. debt held overseas.

And don’t put away the joke book just yet. Subbing as apologist-in-chief for an absent George W. Bush and the top officials of his administration on this 10th anniversary, former British Prime Minister Tony Blair recently reminded us that there is more on the horizon. Conceding that he had “long since given up trying to persuade people Iraq was the right decision,” Blair added that new crises are looming. “You’ve got one in Syria right now, you’ve got one in Iran to come,” he said. “We are in the middle of this struggle, it is going to take a generation, it is going to be very arduous and difficult. But I think we are making a mistake, a profound error, if we think we can stay out of that struggle.”

Think of his comment as a warning. Having somehow turned much of Islam into a foe, Washington has essentially assured itself of never-ending crises that it stands no chance whatsoever of winning. In this sense, Iraq was not an aberration, but the historic zenith and nadir for a way of thinking that is only now slowing waning. For decades to come, the U.S. will have a big enough military to ensure that our decline is slow, bloody, ugly, and reluctant, if inevitable. One day, however, even the drones will have to land.

And so, happy 10th anniversary, Iraq War! A decade after the invasion, a chaotic and unstable Middle East is the unfinished legacy of our invasion. I guess the joke is on us after all, though no one is laughing.

“Sequester Facts” on US Policy Manipulations You Should Know

Right now, the American people are like frogs in warm sequester water.  For some, inundated with all the corporate media talk about out-of-control spending, the cuts to the deficit feel good right now. But as the sequester takes hold and federal spending is pulled from the economy, those views are likely to change. 

US elected officials seem to be focused primarily on making sure the other party is to blame, when in fact both are to blame, and on measuring the political fallout.  In many ways, this is part of the battle to determine which arm of the corporate duopoly will have a majority in Congress after the 2014 year elections.

But for the rest of us, a large spending cutback by government in the midst of a jobs crisis and shrinking GDP is exactly the wrong policy for the economy.  The US economy is likely to find itself in a recessionshedding more jobs in 2013 with an increased deficit to GDP level in part because of the sequester, but also because the federal government was already in austerity, shrinking at a very fast rate (despite what the corporate media, pundits and politicians say). Thus the road to a double-dip recession has sped up due to the sequestration. Here are some facts you should know.

In fact, Zero Hedge published a disconcerting list of twelve recent events that show the next economic collapse may almost be upon us. And, they point out that the sequester will make things worse.  Less money in the economy when big business is not spending is a sure sign of economic disaster, potentially even deflation which could lead to worse than a recession.

Federal Government Spending Percentage Change

The sequester will cut $85 billion in government spending from March 1 to September 30. It is a 5% cut for most federal spending, but because the fiscal year began on October 1, 2012, five months have already passed and thus the one year cut is jammed into 7 months. Some agencies, like those providing unemployment benefits have been unable to prepare so there are likely to be 10% or so cuts in checks to the unemployed. Other agencies have been able to prepare somewhat by not filling vacancies and taking other budgetary actions since last October. And others, which give out grants for research, will be giving out fewer funds in grants.  How the sequester will impact agencies will vary from program to program.

It will also vary from state to state. States like, Virginia, New Mexico, Alabama and South Carolina, with high federal spending will face more severe cutbacks, while states like, New York, Ohio, Illinois and Oregon, with less federal spending will face less. But there will be budgetary pain all across the nationin health care, housing, education, security and immigration, among others.
The sequester does not seem to bother Wall Street, as the stock market approaches record highs, but then Wall Street has always desired cuts rather than the kinds of job program spending that the economy needs. Big business made its money in large part by increasing production and shrinking wages.  A hungry, desperate unemployed and underemployed work force is good news for them – and that is very likely what the sequester will produce. (But check #1 on this list of 12 recent events. It may be the Wall Sreet bubble is about to burst.)

In fact, probably the best comment on the sequester came from Chris Hayes who pointed out that if the White House and Congress really want to scare themselves, the next threat should be a trillion dollar spending program, half to create government jobs and half to pay-off peoples debts!
Check out the new OccuCard to learn more about Austerity. Hand them out to educate others. Visit

There is more than the sequester happening in the US economy.  Here are some key stories of the last week:

We can’t say it enough: It’s important to know the facts so we know what we are facing, but we can do something about it. We are inspired that people all across the country and across the world are taking action to protest and to build alternative systems. This week on Clearing the FOG, we spoke with Thomas Gokey of Strike Debt Rolling JubileeLearn how debt affects your community and what you can do to resist it. There will be a week of national solidarity actions to bring awareness to medical debt and the solution of a national single payer health program March 16 to 23.