Tuesday, August 30, 2011

Banking System Going Downnnnn: Wrong (Always) Crazy Pundits/Beltway Wisdom(?) Dumb - Join Israeli Army!

“Socialize the banks. They have been bailed out over the past 30 years to the point the billionaires are the largest recipient of federal welfare.” (Stolen from a commenter on the essay below. Thank you "ilsm.")

If you aren't already familiar with Barry Ritzholz, you should be. He calls the banksters for what they are and have been and what they ought to be. And what we as a strong country should ensure that they are in the future. And he's not afraid to tell them where to go. AWAY!

And they are. Very slowly. (And I always return to my favorite theme at times like this: the banksters, investors, etc., are not any smarter than  most of the rest of us are. We can see the problems clearly. They just think they are sooooo clever that they can buy their way out of their current troubles (pay someone off well enough) long enough to have them either evaporate or be replaced with much different and much scarier ones - thereby making the public fools forget about the money already wasted (owed to them).)

This week’s Washington Post column is out, and it's a look at the Buffett’s bailout of Bank of America, and what it means for the overall financial systems.

“Many investors assumed the Wall Street bailouts of Bank of America and the other big banks more or less healed the sector. All it took was few trillion dollars in liquidity and a few $100 billion in recapitalization. Voila!

In fact, the banking system was not saved. The massive injections of liquidity temporarily salved the day-to-day operations of banks, but they did not repair the more profound troubles. Indeed, pouring billions into nearly identical management teams that mismanaged risk, overleveraged exposure and drove banks off the cliff in the first place was an invitation for another crisis.

In past weeks, Bank of America has been under increasing pressure from investors. Its already damaged stock was cut in half, and commentators including myself argued that the bank was headed back toward the rocky shoals of insolvency.”

For anyone who thought the U.S. banking sector was healthy, Warren Buffett’s $5 billion investment in Bank of America should be a wake-up call.

Many investors assumed the Wall Street bailouts of Bank of America and the other big banks more or less healed the sector. All it took was few trillion dollars in liquidity and a few $100 billion in recapitalization. Voila!

In fact, the banking system was not saved. The massive injections of liquidity temporarily salved the day-to-day operations of banks, but they did not repair the more profound troubles. Indeed, pouring billions into nearly identical management teams that mismanaged risk, overleveraged exposure and drove banks off the cliff in the first place was an invitation for another crisis.

In past weeks, Bank of America has been under increasing pressure from investors. Its already damaged stock was cut in half, and commentators including myself argued that the bank was headed back toward the rocky shoals of insolvency.

On Thursday, Buffett stepped in, at least temporarily, to save Bank of America’s bacon. He was inspired, Archimedes-like, in the bathtub — an image I will likely carry with me for the rest of my days. Buffett has put together a deal on terms similar to those he offered Goldman Sachs and General Electric: A fat 6 percent yield on preferred (not common) stock, and warrants to buy 700 million Bank of America shares at $7.14 each, good for 10 years. 

A few items leapt out:
●Despite its repeated claims to the contrary, Bank of America needed both capital and a reputation reboot. Buffett provided a little of both, though I’m not sure which they needed more.

●With the Fed offering banks capital at nearly zero percent interest rates, why would BofA take money at 6 percent? This gives lie to the claim that BofA did not need more capital. (The counterargument is this was about the stock slide, not the capital structure, which remains opaque.)
●Investors are cautioned that unless you are buying on the same terms as the billionaire, you are making a very different bet than he is.

But all of this goes back to the failures of the 2008-09 bailouts. Consider what was actually done then, and you will understand why none of the underlying problems have been fixed:

Bank holdings: They remain stuffed with declining assets, primarily in housing and derivative holdings. Another leg down in housing could be nearly fatal.
Transparency: Balance sheets are unnecessarily opaque. Eliminating fair-value accounting via FASB 157 did not fix balance-sheet problems, but instead allowed banks to hide them.

Capitalization: This remains too thin. Leverage should be mandated back to the pre-2005 rule change of no more than 12 to 1. Management does not keep adequate capital unless forced to do so (“sufficient” capital reserves cuts into profits).  

Misaligned incentives: Compensation and bonus schemes were not significantly changed after the bailouts, except during loan repayments. Thus, management and traders still have the same upside to roll the dice, but they do not have the downside risks, which remains on shareholders and taxpayers.

If this isn't clear enough for you, I have a friend who will make it much clearer right now.

If there's one thing harder to say for a pundit to say than "conservatives deserve the overwhelming share of the blame on this," it's "I was completely, utterly wrong."

The conservative base is mean, crazy and dumb, while the chattering class is mostly dumb, decadent, craven and vain. They view themselves as savvy, worldly and smart, of course. Upton Sinclair said that "It is difficult to get a man to understand something when his job depends on not understanding it."
From my esteemed friend and honored source of informed opinion, Batocchio at Vagabond Scholar:

Let's recap. These Very Serious People somehow completely ignored the lessons of the Great Depression, one of the seminal events of the 20th Century, and they don't understand the Keynesian economic principles that drove America's recovery. They're hardly alone in that, with austerity being all the rage these days (for the lower classes only, of course). However, it's further proof that the Beltway Conventional Wisdom is often pretty dumb, and the chattering class just does not know or care much about policy – even if that policy is absolutely crucial. They actually thought (and still think) that cutting government spending in a recession is a great idea.

These Very Serious People also thought that taking a routine but vital action, raising the debt ceiling, and holding it hostage, was a good idea. Seriously. They thought threatening the very functioning of the government and the American economy was a good idea.

The Very Serious People also thought, somehow, against a mountain of evidence, that the Republican Party was at its heart reasonable, and would never actually go all the way through with their threat – a threat the VSPs were cheering on. Even though many of these people are paid to cover politics, they completely misread GOP inflexibility and insanity, which is nothing but, oh, the major political development of the past 10-30 years.

Lastly, the Very Serious People refused to report the debt ceiling situation accurately, continually insisting that "both sides are equally to blame." This made the situation even worse. Needless to say, they also ignored their own culpability in egging it on.

In rough stupid-evil-crazy terms, that would be a whole mess of stupidity, followed by astounding recklessness and irresponsibility, followed by are-you-fucking-kidding-me stupidity, followed by gutlessness and dishonesty.

Unfortunately, this is a recurring pattern, in general terms, at least. Most glaringly, consider media conduct leading up to the Iraq War and afterward. The chattering class does not value policy. That would take time. Plus, as a privileged class, most policies that hurt the middle class will not after the political class much. This means they've both unable and unwilling to make fact-based, qualitative judgments about most political issues. Others will suffer, not them.

Meanwhile, even if they're not right-wing, or don't identify themselves as such, they are often simpatico with the right-wing's goals. At the very least, they are strangely indulgent of, oh, threatening the government's basic ability to function, cutting tax cuts further for the rich and calling war skeptics traitors.

Finally, they whitewash their own role in creating these messes. How many Iraq War cheerleaders have truly repented, and detailed how they were wrong? I can think of a handful, but not many. Many reporters offered unduly rosy accounts of Iraq years after the invasion, I suspect because they thought it would somehow vindicate their colossally poor judgment. They were likewise subservient in the coverage of the Bush administration's torture regime. Similarly, even now, many reporters are reluctant to point out exactly how disastrous the Bush administration was economically.

So, how many supposedly "serious" and "objective" cheerleaders for the debt ceiling hostage situation – an inexcusably irresponsible move – have owned up to their role in manufacturing that crisis? I'm guessing that number is about nil.

It's a Herculean struggle to get accurate media coverage due to journalists' dishonest, shallow, continual insistence that "both sides are equally to blame." But what makes that struggle downright Sisyphean at times is that very often, the media is also to blame for creating the mess itself. If there's one thing harder to say for a pundit to say than "conservatives deserve the overwhelming share of the blame on this," it's "I was completely, utterly wrong."
The conservative base is mean, crazy and dumb, while the chattering class is mostly dumb, decadent, craven and vain. They view themselves as savvy, worldly and smart, of course. Upton Sinclair said that "It is difficult to get a man to understand something when his job depends on not understanding it." That's true, and it's also true that it's hard to get someone to admit error, even (or especially) a glaring one, when that will shatter their entire self-image.

(Related posts: "Extremism in Defense of Nihilism is a Vice" and "Partisanship, Policy and Bullshit.")

Addendum: Chait's piece isn't the whole story. Digby points out that Obama wanted to make a "grand bargain" cutting programs to at least some degree, and wasn't forced as much as Chait portrays. David Dayen adds more to the picture, exploring how conservative "blue dog" Dems played a key role in introducing the horribly irresponsible notion of a debt ceiling standoff. Meanwhile, driftglass takes Chait to task for his "magical thinking" in a related post. I find Chait to be a mixed bag (and perhaps that's fodder for another post) but it's certainly possible for someone to write well on some subjects but not on others, or to make both good and poor points in the same piece. Hey, give credit where and when it's due, critique with what's sincerely offered but inaccurate, and challenge the outright bullshit.

And if you were wondering where the jobs really are now (rich PR also helps this type movement):

Young Americans flock to Israel to join army

Friday, August 26, 2011

Worse Than It Looks: CBO Says Economic Outlook More Dire Than Reported: Wonkette Reams the Righties/Goldmen Hire Sharks/Sensors Removed/Aircraft Blowup!!!

"We might as well have been throwing cream pies."

- Kurt Vonnegut, estimating the net effect of the Antiwar Movement on the course of the Vietnam War

I certainly thought (from my own and my friends' experience) that this was true. Thank whoever that the righties haven't assumed so much control in Congress (yet) that they've been able to stop the CBO from reporting the facts about current economic conditions.

Worse Than It Looks: CBO Says Economic Outlook More Dire Than Reported
Partisans will surely find things to love and hate about CBO's updated economic outlook. It projects that the 2011 deficit will be lower than the last two years' deficits, but still near record highs. It forecasts a slow but steady economic recovery over the next six years. And it makes clear that the country's medium-term fiscal imbalances are manageable unless lawmakers decide to screw things up.

But there's also a major, major caveat.

"CBO initially completed its economic forecast in early July, but it updated the forecast in early August to reflect the policy changes enacted in the Budget Control Act [the debt limit deal]," the report reads. "However, the forecast described here does not reflect any other developments since early July, including the recent swings in financial markets, weakness in certain economic indicators, and the annual revision to the national income and product accounts. Incorporating that news would have led CBO to temper its near-term forecast for economic growth."

Emphasis added.

This is why the CBO's forecast for slow but steady recovery differs so markedly from private sector forecasts, which are increasingly leery of a double dip recession and project growth at levels much lower than previously expected.

It's depressing news for the country, still suffering with unemployment above 9 percent, and a tough political reality for President Obama, who will likely face re-election under dire economic circumstances. Even if you ignore CBO's caveat their forecast still projected unemployment "to fall from 9.1 percent in the second quarter of 2011 to 8.9 percent in the fourth quarter of the year and to 8.5 percent in the fourth quarter of 2012."

Pinpointing the causes of market turmoil isn't science -- and it's often a biased Rorschach test -- but many analysts say the congressional brinkmanship over the debt limit in July deal contributed to recent swings.

Because CBO uses current law as a baseline, it projects deficits to fall markedly over the course of the decade, in large part because the Bush tax cuts are set to expire. However the forecast could look much more bleak if those tax cuts were extended; or indeed if the government were to enact new stimulus measures and yet still see anemic growth.

Read the full report:

There are many good places to find serious dissections on economics and political issues. Wonkette is not one of them, and yet, they've outdone themselves here:

Wonkette posits that:

Social Security is in “trouble” because wealthy people aren’t required by the government to actually pay their share into the national program, and also because Congress has been “borrowing” billions of dollars that working people have paid into the program so that they might not have to starve or die of common illnesses once they’re chewed up and spit out by the capitalist system.
But there’s another part of Social Security that’s running out of money even faster than the old age pensions, because a record number of discarded workers are now claiming disability payments and Supplemental Security Income — 3.3 million unwanted laborers will file for the last-ditch payments this year alone, and nearly 14 million currently receive the monthly stipends and early Medicare coverage. The money isn’t much, and is based on either your actual paycheck contributions or limited to an average $500 a month for SSI, but it’s “better” than the American alternative, which is pretending to rob a bank so you can get food and medical care in prison.

To get disability or SSI, the applicants must go through a lengthy process of ritualized refusals and humiliation: Two-thirds of applicants are turned down, and many legitimately disabled workers are forced to go through two years of appeals and hire vulture law firms to finally get the paltry benefits. But the focus of the federal government is always on “cracking down” on people who aren’t really horrifically disabled enough to get a government check, because it’s certainly not enough to simply be an unwanted factory worker in her fifties who entertains fancy dreams of not being homeless after her extended unemployment benefits run out after her fourth layoff.
Morally, it’s always better to catch the miscreant buying forties with his SSI rather than, say, the biggest corporations in the world not paying a nickel in taxes.

The Associated Press reports from Washington:

Claims for disability benefits typically increase in a bad economy because many disabled people get laid off and can’t find a new job. This year, about 3.3 million people are expected to apply for federal disability benefits. That’s 700,000 more than in 2008 and 1 million more than a decade ago.

“It’s primarily economic desperation,” Social Security Commissioner Michael Astrue said in an interview. “People on the margins who get bad news in terms of a layoff and have no other place to go and they take a shot at disability.”
So it’s kind of like the Lotto! Except instead of paying money you can’t afford down at the corner market for a chance in hell at a million dollars — because that statistical impossibility is literally the only way out of the hole you’ve been intentionally pushed down — you promise a boiler room full of fourth-rate sharks a share of your disability check in exchange for them filing enough papers to finally get you approved. Win win?

Anyway, Disability and SSI are now scheduled to begin scaling back benefits over the next five years, when the programs as currently funded will only be able to pay 85% of what’s promised. So that $500 payment will go down to $425 a month, at first, but it should be gradual enough that the poors won’t hardly notice when it’s down to $100 a month and even the Pay-Chex shop next to the liquor store and the pawn shop won’t cash it.
It's always good to catch up with the Goldmen who run the country and try to discern what they think is upcoming for both them and US. Today it's positively eye opening.
Posted: 23 Aug 2011
Weingarten is a very heavy legal hitter, so it looks like old Lloyd really is worried. Geeze, Lloyd, haven't you noticed bankers don't go to jail? (h/t odd man out.)

Goldman Sachs Chief Executive Lloyd Blankfein has hired high-profile Washington defense attorney Reid Weingarten, according to a government source, as the Justice Department continues to investigate the bank.

Blankfein, 56, is in his sixth year at the helm of the largest U.S. investment bank, which has spent two years fending off accusations of conflicts of interest and fraud.

The move to retain Weingarten comes as investigations of Goldman and its role in the 2007-2009 financial crisis continue.

The news spooked already jittery investors. Goldman shares fell sharply in the final minutes of regular trading after Reuters reporting the hiring, finishing down 4.7 percent at $106.51, their lowest level since March 2009.

They slipped further in after-hours trade to $105.45.

The Senate's Permanent Subcommittee on Investigations (PSI) in April released a scathing report that criticized Goldman for "exploiting" clients by unloading subprime loan exposure onto unsuspecting clients in 2006 and 2007, and concluded that its top executives misled Congress during testimony in 2010.
[...] "This was the last thing that Goldman Sachs or any institutions in the sector needed," said Peter Kenny, managing director of Knight Capital in Jersey City, NJ. "There is zero tolerance for risk or perceived risk right now."
How about an update on the earthquake sensor removal ("improving government" project) in Eric Cantor's district?

Yeah. And it was a good idea because too many regulations really slows down progress (and money acquisition).

Quake Sensors Removed Around Virginia Nuke Plant Due to Budget Cuts

By David Edwards
Tuesday, August 23rd, 2011

A nuclear power plant that was shut down after an earthquake struck central Virginia Tuesday had seismographs removed in 1990s due to budget cuts.

U.S. nuclear officials said that the North Anna Power Station, which has two nuclear reactors, had lost offsite power and was using diesel generators to maintain cooling operations after an 5.9 earthquake hit the region.

The North Anna plant, which was near the epicenter of Tuesday's quake, is reportedly located on a fault line.

The U.S. Nuclear Regulatory Commission rates the plant as the seventh most likely to receive core damage from a quake. But they say the chances of that are only 1 in 22,727.
According to the Virginia Department of Mines, Minerals and Energy (DMME), the Virginia Tech Seismological Observatory (VTSO) removed all seismographs from around the plant in the 1990s due to budget cuts.

In February, Dominion Virginia Power confirmed its commitment to add a third reactor to the plant.

"While Dominion has not decided on the schedule to build the unit, the company will continue to move forward with the federal combined operating license process and preliminary site development work," Dominion CEO Thomas F. Farrell II said in a statement.

US Military Video Shows Hypersonic Aircraft Test Flight

The U.S. military released new details today (Aug. 25) about the recent test flight of a super-fast prototype aircraft, along with a video showing the vehicle streaking through the sky at more than 20 times the speed of sound.
The shaky, minute-long video was taken with a handheld camera aboard a tracking vessel in the Pacific Ocean. It shows the unmanned Falcon Hypersonic Technology Vehicle 2 (HTV-2), billed as the fastest aircraft ever built, blazing bright in the sky on its way to an ocean splashdown.
The HTV-2 suffered an anomaly shortly after its Aug. 11 launch from Vandenberg Air Force Base in California, guiding itself into the Pacific sooner than military officials had hoped.
 Well, at least it's pretty. And we certainly couldn't have found a better use for the national moolah right now.

Still pretty.



Thursday, August 25, 2011

Friedman Burlesque: Pure Propaganda With Drone Strikes and Bundling (Libya Lies Exposed) Again and Again & Medicare Terrorists! BEWARE!!!

I hadn't realized that this was such a competitive event before (h/t Driftglass), and hadn't planned to start today's essay on such a humorous note, but it seems kinda like a Friedbrain tasting day, so here are a few of the roasters (and ain't he a hoot?):

The Thomas Friedman-est Column of the Year

You may have thought that soothsaying mustachioed one-trick pony Tom Friedman had done his best work of the summer last week, when he achieved near-total conceptual pointlessness. Not so! Yesterday's column was an altogether masterful demonstration of Friedmania.

Starting with the headline: "A Theory of Everything (Sort Of)." Are you unfamiliar with Thomas Friedman's oeuvre? I can think of no way to sum it up better than "A Theory of Everything (Sort Of)." That is, fundamentally, what Thomas Friedman strives to present to his audience of weary business travelers: "A Theory of Everything (Sort Of)." Tom Friedman hopes to have the words "A Theory of Everything (Sort Of)" on his tombstone, which will be made in China, cheaply.

There is political unrest in the Middle East. There is political unrest in Europe. There is political unrest in America. "What's going on here?" asks Thomas Friedman, with his typical rhetorical flourish.

There are multiple and different reasons for these explosions, but to the extent they might have a common denominator I think it can be found in one of the slogans of Israel's middle-class uprising: "We are fighting for an accessible future."
Not only are there multiple reasons; those multiple reasons are also different. Very important. And all these multiple as well as different reasons add up to: "The world's vaguest slogan." Coincidentally, "The world's vaguest slogan" is the backup inscription for Thomas Friedman's tombstone. (He is having the backup tombstone made in India. Hedging those bets!)

Why now? It starts with the fact that globalization and the information technology revolution have gone to a whole new level. Thanks to cloud computing, robotics, 3G wireless connectivity, Skype, Facebook, Google, LinkedIn, Twitter, the iPad, and cheap Internet-enabled smartphones, the world has gone from connected to hyper-connected.
This is the single most important trend in the world today.
Sorry, did I just pull a random quote from any one of Thomas Friedman's hundreds of identical columns and/ or books over the past decade and paste it, above? No, that is from the column which we are discussing, from yesterday. It is. Just because it could have appeared in any of hundreds of other Thomas Friedman columns on hundreds of other subjects is no reason to think differently. What is the most important trend in the world today? "A list of random words related to the internet." ("A list of random words related to the internet" is the second backup Tom Friedman tombstone inscription, the one that he outsourced to Brazil, to be on the safe side.)

Surely one of the iconic images of this time is the picture of Egypt's President Hosni Mubarak - for three decades a modern pharaoh - being hauled into court, held in a cage with his two sons and tried for attempting to crush his people's peaceful demonstrations. Every leader and C.E.O. should reflect on that photo. "The power pyramid is being turned upside down," said Yaron Ezrahi, an Israeli political theorist.
[Item in the news this week about the Middle East.] [Nonsensical patronizing platitude directed at audience of fanboy businessmen.] [Crushingly obvious quote from Israeli political person,] says Thomas Friedman.
Cancel your New York Times subscription and simply reread this post three times a week for the rest of the year.
And one more jewel in the Friedbrain Crown before we move on to the blood sport of today.

What Is the Point of Thomas Friedman?
There is much glee on the ethereal plane high above the Bethesda clouds from which New York Times columnist Tom Friedman writes his column today. We're treated to his latest venture into despondent centrist wet-dream fanfic, in which the Mustache of Understanding imagines a world where political parties don't have bases, but still manage to dig deep, treat each other politely, and deal with false problems in bad ways through their own sheer purity of will.
Yeah, he's written another one of his "concept" columns. In this one, he imagines a future Associated Press article which, when printed in real life as an accurate write-up of real events, will signal the end of America's troubles. Until then, however, "we'll be stuck in a world of hurt." Perhaps because we'll still be reading Thomas Friedman columns misdiagnosing everything?
Friedman's fake AP article imagines the major players in Congress giving a press conference alongside the President, at the White House. They have big news.

Washington (AP) - It was a news conference the likes of which the White House had never seen. President Obama stood in the East Room, flanked by the House speaker, John Boehner; the Senate minority leader, Mitch McConnell; the Senate majority leader, Harry Reid; and the House minority leader, Nancy Pelosi. The president asked Mr. Boehner to speak first:
My, what an unusual courtesy from the president! What does John Boehner have to say?

"My fellow Americans," the Ohio Republican began. "We have just concluded a meeting with the president, prompted by this moment of extraordinary economic peril. Our party, as you know, is convinced that the main reason for our economic decline is that we have too much debt, that government has grown too big and that taxes and regulations are choking our dynamism. But I have to acknowledge that, over the years, our party has contributed to this debt burden and government spending binge.

We are not innocent, and, therefore, we owe the country a strategy for governing and for fixing a problem that we helped to create - instead of just blocking the president. The G.O.P. is better than that and has more to offer the nation. Therefore, we have informed the president that our legislators are ready to reopen negotiations immediately on a ‘Grand Bargain' to address all these debt issues once and for all and that everything will be on the table from our side - including tax reform that closes loopholes and eliminates wasteful subsidies, and, if need be, tax increases."
And the nation filled the streets in rejoice, to hear that yet another austerity package would be on the way during a period of wretched economic growth! Replete with tax increases, which... well, who knows how Tom Friedman would get John Boehner to dump strict anti-tax orthodoxy as the fundamental tactical strategy of the Republican party that defines everything it does. Maybe John Boehner will have a dream too! But really, how do you change the entrenched structural factors that make John Boehner do what he does? According to Tom Friedman, you pretend they don't exist and that people are just silly for no reason.
President Obama, then, "warmly embraces" Boehner — as if the American people aren't confused and frightened enough! — and gives his own lengthy, stirring monologue, calling on two old hacks to form another super committee that will be charged with solving every problem:

"Speaker Boehner and Senator McConnell, thank you for your commitment to act in our nation's highest interests. Let me say publicly what I committed to you privately: I have asked Erskine Bowles and Alan Simpson to revive their deficit commission and to use their recommendations for how to cut spending and raise revenues as the starting point for our negotiations. But it will now be called ‘The National Commission for American Renewal.' Because in addition to the original Bowles-Simpson members, it will include Senator McConnell, Speaker Boehner, Senator Reid and Congresswoman Pelosi, and its goal will indeed be a comprehensive plan for American renewal.
So that's how it gets done in a great country: Take every issue imaginable and have a dozen or so people plus Alan Simpson and Erskine Bowles decide what to do with them, in one bill, in private.
Later in the monologue, President Obama starts talking about why he's a shitty president:

And I, too, have a confession: I've done a poor job integrating my nation-building ideas, including health care, into a single vision so people understood where I was going. I also let tactical political considerations - like abandoning the Bowles-Simpson commission - intervene, so Americans lost sight of my priorities. That will not happen again. No one loves this country more than I and my Democratic colleagues.
And finally, Friedman's colorful kicker: "At that point, all five leaders shook hands and retreated into the Oval Office. It was exactly 9:29 a.m. One minute later, the New York Stock Exchange opened. The Dow was up 1,223 points at the open - an all-time record." Aww! But did it then plummet when traders remembered how to do their jobs?
It's really not hard to write a fantasy story in which everyone in politics decides to get along and fix the country overnight. It's fiction; you just make up whatever! Anyone can do this. Shouldn't the New York Times political columnist's job be to explain how things actually work?
Nah. What fun is that? And how many columns would need to be written with actual thought or reporting behind them? Brrrrrrrr.

Therefore, it is crucial for a nation's leaders and its citizens to tell and live the truth, especially since "truth" is similar to reality. Lying distorts thinking and judgment. It alters reality and perception. When confronted with the 168 children that have been killed by U.S. drone strikes, or the documentation showing for every 10 to 15 Pakistanis killed by drones only one is a suspected militant, Pentagon officials and political leaders still claimed the strikes defended the U.S. and protected its national security and freedoms.

(Drone Warfare)

From Tony at Wolves in the City:

WorldNews.com Correspondent Dallas Darling.
"I didn't realize how high a price we were going to pay for that lie."

- President Dwight D. Eisenhower, 1960.

"Think of the use of drone air strikes as summary executions, extra-judicial killings justified by faceless bureaucrats using who-knows-what "intelligence," with no oversight...a world where joystick gods manipulating robots deal death from the skies and then go home and hug their children." - U.S. Congressman Dennis Kucinich, 2011.

It was banal, when United States political and military leaders immediately dismissed the London-based Bureau for Investigative Journalism's report documenting that since 2004 lmost 2,300 Pakistanis had been killed by CIA covert drones, 160 of them children. Predictable too was the Pentagon's frail attempt at denying the fatal report by blaming it on faulty intelligence, and then employing a propaganda surge by claiming those killed in drone strikes were "terrorists."

Architects of empires and nation-builders, including their consumerist populaces, have no need for truths or reality, especially since they believe their new world order justifies lying. Hannah Arendt warned of this, of how darkness comes when this light - the public realm throwing light on the affairs of men - is extinguished by a "credibility gap" and "invisible government," and how they "sweep under the carpet and, by moral exhortations and under the pretext of upholding old truths, degrade all truth to meaningless triviality."(2)

Similarity, when U.S. pilot Gary Powers was sentenced this very same week on August 19, 1960, another denial, another lie leading to credibility gaps and invisible governments, was exposed. What led to Powers arrest and imprisonment (symbolic of ours?) was when his Lockheed U-2 Spy Plane, illegally flown over Soviet airspace and collecting data, was shot down. For days, President Dwight D. Eisenhower intentionally lied and deceived the world, claiming the spy plane was merely a weather plane that had strayed off course.

But President Eisenhower and state department officials were also lying to the American people about a "missile gap," claiming the U.S. lagged far behind the Soviets in nuclear weapons technologies and arsenals. Even though photos from previous U-2 flights over Soviet installations had proved otherwise, they still lied and deceived Americans. When John F. Kennedy, before taking office, discovered how inaccurate the missile gap assertion was, he perpetually lied about it too, using it for political gain.

Meanwhile, President Eisenhower was unaware that the U-2 Spy Plane's wreckage was intact enough for the Russians to have recovered the camera, complete with the film of Soviet missile bases. Even more shocking and embarrassing for U.S. officials was that Powers, the pilot of the plane, had been taken captive and was still alive. They had either thought or hoped Powers, the pilot of the plane, had either been killed beyond recognition in the crash, or that he had taken his suicide pills.

Although President Eisenhower was forced to admit he had lied, he refused to apologize. As the Soviets cancelled the next USA-USSR disarmament summit, the U.S. lost some of its moral high ground. Out of fear, the Soviets started constructing the Berlin Wall and then attempted to station nuclear missiles in Cuba. In America, lying became routine: the Gulf of Tonkin Incident and U.S.-Vietnam War, Watergate, Iran-Contra Affair, and Iraqgate I and II. It also became deadly and costly as millions of people were killed.

Since America's U-2 Spy Plane, the one shot down over Russia, took off from a U.S. military base in Peshawar in Pakistan, maybe this new report recording and detailing how 2,300 Pakistanis were killed, including 160 children, is another warning and indictment against America's credibility gap and invisible government-ruled by American political and military leaders obsessed with intentionally lying to themselves, each other, the American people, and the rest of the world.

Perhaps it serves as a condemnation too, not of America's technological achievements but of its technological inhumanness. Since 1960, the human image, either of the warrior or the enemy or of civilian casualties, appears less and less frequently in modern portrayals of war.(3) The weapons themselves, like the deadly flying drones, are the new surgical and sanitized icons. What happens to an ideological paranoid nation when their own weapons, fashioned by their own hands and in their own images, become the new face of war?

In this new technologically, aggressive and delusional environment, there is no moral ground. Lies are no longer troubling or discomforting. Neither are they and humanness detected. Instead, national- and technological-serving motives are what really counts. Protecting liars and enhancing their industrial investments becomes paramount. But in this culture of habitual lies and technological violence - a deliberate assault on human character has occurred, one that can coerce even the good and just to act against their will.

Therefore, it is crucial for a nation's leaders and its citizens to tell and live the truth, especially since "truth" is similar to reality. Lying distorts thinking and judgment. It alters reality and perception. When confronted with the 168 children that have been killed by U.S. drone strikes, or the documentation showing for every 10 to 15 Pakistanis killed by drones only one is a suspected militant, Pentagon officials and political leaders still claimed the strikes defended the U.S. and protected its national security and freedoms.

It is impossible for a nation to function properly and to have a vibrant democracy while its domestic and foreign polices are perverted and delusional. Only more destruction and death awaits a lying and deceitful nation. As Pakistan considers vetoing deadly U.S. drone strikes, will Americans find the courage to veto its leaders' lies which continue to kill? Alas, we should have told the truth then...and now, not only for our national well-being but for the sake of innocent children who have been murdered with our adversarial lies.

Dallas Darling (darling@wn.com)
And all I meant to lead off with were the very intelligent thoughts of my bestest buddy at Salmon Alley (as if anyone in the powers-that-be really cared about reducing the debt in ways that would benefit the nation and wouldn't harm the lower classes):

Medicare for All Reduces the Debt by $400 Billion a YEAR!

Here is the real deal from Dr. Quentin Young via FDL
The biggest albatross around the neck of our health care system is the private insurance industry, which remains firmly entrenched under the new federal health law. [my bold]
... if we’re to believe top lawmakers, Medicare is part of the problem, right? Aren’t we supposed to be talking about raising the eligibility age from 65 to 67, reducing benefits, increasing seniors’ co-pays and deductibles or, even more dire, abolishing the program altogether and handing seniors vouchers to buy private insurance?
Wrong. Despite its market-obsessed detractors and those who would weaken the program in the name of deficit reduction, Medicare is the solution, not the problem. More precisely, an improved Medicare for all – a single-payer health system – is the right prescription for treating not only our health care woes, but our ailing economy as well.

Thanks to companies like UnitedHealthcare, WellPoint, Aetna, Humana and Cigna, our nation’s patients, businesses, and health providers are chronically tormented by skyrocketing premiums, denials of care, endless paperwork and bureaucracy, and the spectacle of obscene CEO salaries and insurance company profits.
And what does this so-called system get us? Fifty-one million people who have no coverage at all; 45,000 annual deaths linked to lack of coverage; a million personal bankruptcies annually (62 percent of the total) linked to illness or medical debt; and World Health Organization indicators that put us in 37th place globally, even though we spend twice as much per capita as any other nation.
Waste in our system is staggering. Research shows about 31 cents of each U.S. health care dollar is currently spent on administration, over half of which is unnecessary. That translates into $400 billion wasted annually. If we recaptured that money and applied it to clinical care – as we could under a single-payer system – we’d be able to assure everyone comprehensive, first-dollar, high-quality coverage.
Read the rest here

Have you been the slightest bit curious about who that mysterious "bundler" was that switched to the Rethugs after Hillary "lost" the nomination to Obama (and raised so much hell during the campaign about her being slighted)?

I know I was. Here's the scoop, babies!

War Room

We talk to Lady Lynn Forester de Rothschild

By Justin Elliott 
lady rothschild
Reuters/Pascal Rossignol
Lynn Forester de Rothschild

Lady Lynn Forester de Rothschild became a fixture on cable television in 2008 as one of Hillary Clinton's fiercest supporters in the Democratic primary. A successful businesswoman who married the financier Sir Evelyn Rothschild in 2000, she was also a major bundler for the Clinton campaign.

But when Hillary lost, an embittered Rothschild switched sides and endorsed McCain in the final weeks of the 2008 campaign. In the 2012 cycle, she has both hosted a fundraiser in Manhattan for former Utah Gov. Jon Huntsman and been associated with the hedge fund-backed group Americans Elect, which seeks to circumvent the party conventions and nominate a bipartisan presidential ticket.

On Friday, Rothschild spoke to Salon by phone from Martha's Vineyard. The conversation ranged widely, from her support for single-payer healthcare as well as Republican economic policies to her unlikely admiration for both Hillary Clinton and Eric Cantor. And, of course, her abiding enmity toward Barack Obama.
You're not supporting Obama for reelection. Where do you think he has erred in the last three years?

In 2008 as a Democrat, I tried as hard as I could to say that it mattered that Barack Obama did not have the experience to run this country. In the last three years we have seen absolutely that that is the case. The man is lost. The man is a loser. The man is not listening to people who might help him. And four more years of Barack Obama will be devastating for the country. 
Are there policy areas where you think he has gone wrong?

Where he has gone wrong is the disgraceful fact that there are 14 million people unemployed and 25 million people underemployed or who have given up work. That is a disgrace. That's number one. This man cannot say it was given to him. I believe it was cravenness and vanity that caused him to do Obamacare, giving us an entitlement program that costs at least $1 trillion, before he fixed the economy and brought people back to work. To have done healthcare without dealing with the cost curve, and without giving us ultimately what we should have - like the British have, which is a single-payer system -- is an outrage. He's created a monster; he has taken healthcare, which is 17 percent of GDP right now, and has expanded it to another 30 million people. He is going to bankrupt America. He's so vain and he's so convinced of his own transcendence as a solution to everything that he's incapable of doing the right thing for the country.

On healthcare, a lot of people will say that the law that ended up passing looks a lot like Hillary's plan from the election, with its inclusion of the individual mandate. How do you reconcile your support for Hillary with your opposition to Obamacare?

I think - and I have not spoken to her at all about this - that Hillary Clinton would have fixed the economy before she tackled healthcare. And then she would have tackled healthcare with all the knowledge she has. She would have found a way - in spite of enormous political opposition - to deal with the healthcare cost curve. Barack Obama did not do that, he made a deal with the insurance companies. It was a check-the-box effort.
On the economy, what do you think he should have done -- or Hillary would have done? Would you support, say, a bigger stimulus? What do you think is needed?
First of all, in times of economic crisis, a person who understands the way the world works would have embraced business and would not have demonized business as Obama did. 

That's what a leader does. Barack Obama is not able to get off of the partisan bandwagon. He is the exact opposite of what he promised he would be. He was supposed to be the great unifier and to bring enlightened solutions; he's really hurting this country. So I am more worked up for 2012 than I was for 2008.
With the current Congress and Republicans controlling the House, they're not on board with doing more stimulus or anything like that. So what do you think Obama should do right now on the economy? Are there concrete steps that can be taken that would get through Congress right now?
The Republicans are saying, "We need growth because without growth there can be no job creation." So the Republicans are looking at proposals Barack Obama has to spend more money as proposals to limit growth; that's the reason for the opposition. So Barack Obama makes a speech where he attacks Congress but he offers no positive solutions. If you read the document that Eric Cantor sent out to his members. He said, we have two goals: one is that we have to reduce the deficit and the debt; and the other is we have to create growth in the economy. And we can't reach one of those objectives if it hurts the other objective.
Do you think that deficit reduction will lead to growth in the economy?
No. I wish it were that simple. I think that you have to have a bold reform agenda including tax reform on a mega scale. That includes removing deductions and special interest subsidies as well as making the tax regime fairer and flatter. You've got to have complete certainty around taxes. You've got to have free trade agreements. And you've got to have a very clear buy-in of what government can do and what government can't do. It's not an overnight solution.
The Times reported recently you hosted a fundraiser for Jon Huntsman. What do you see in him?
I really like Jon Huntsman, I think he is exactly the president we need right now. Number one because he is a knowledgeable and experienced fiscal conservative. He knows how to create jobs though reducing regulation and reducing taxes. At the same time he understands the important and constructive role government has in making our society fairer and better. When he as governor of Utah came out in favor of civil unions, it showed how deeply this man is committed to social justice and fair treatment for all people. That's the combination that I really admire in him. Whether he can win the Republican nomination I don't know. If he won it, he would beat Barack Obama in a heartbeat.
A lot of people know you as a prominent Hillary supporter in 2008. Going from Hillary to Huntsman - have you changed ideologically?
You know, if I were able to pick the president, it would be Hillary Clinton. I still consider myself a Clinton Democrat. But the Democratic Party has been so cowardly in standing for the things that Bill Clinton did that made the country so strong in the 1990s, that I have no time for the Democratic Party anymore. Their failure to stand up to the Chicago-dominated Democratic Party is appalling. The only person who is really doing it is Andrew Cuomo. I think Cuomo is a really unique thinker, and he is outside of the Chicago boys Democratic Party of Barack Obama that everyone else just falls in line with. Obviously the Republicans don't offer me everything, but I also refuse to demonize the Republicans. I think John McCain is a great and very courageous man. I think that Eric Cantor, who is so demonized, if you look at what he actually says and believes in terms of the economy, he is actually a very constructive person.
Yep, it's a damn shame we don't have business-understanding Hillary as Pres., ain't it? Or those fine thinkers John McCain and Eric Cantor!

Anyone who actually thought a Rothschild was a Democrat (except for the definition that includes the Dims), please . . . go to the end of the line.

If it occurred to you after the final screams were emitted from the always-right righties, following the disappearance of the Union of Soviet Socialist Republics, that there should have been a decrease in the Defense budgets and an increase in freedom (at least in the U.S. if not in the rest of the world), you wouldn't be alone.

However . . . the budgets increased (although they hadn't actually invented the exact reasons why yet) and the public (MSM-generated) fear factor of attack increased. (But from whom?) Not to worry. We would invent them BIG when the need arose. And if you enjoy the Libya War coverage, get ready. They've got a whole lot more coming!

Amerika's Global Wars Expand

When the US no longer needed to fight a superpower, no one lost their jobs. They got bigger budgets to spy on Americans in America. The "War on Us" has gone global.

The reasons for what has happened since are complicated and yet, very simple.

Because they could. And now that we are triumphant in Libya (What does that mean again?), the propaganda emerges that we never fought in EastAsia . . . .*

_ _ _ _ _ _ _

1 September 1944 — This article gives the reader a fair representation of Orwell’s desire to think objectively rather than to accept propaganda blindly.  In 1984, objective reasoning would be referred to as “oldthink.”  This article also mentions how people sometimes accept policies, and, a few years later, repudiate the same exact policies, as though they had never supported them.  This would be called “doublethink” in 1984.  “We are at war with Eastasia; we have always been at war with Eastasia.”

(The Infamous Greensboro Party Atheists!)


Wednesday, August 24, 2011

"Shaking All Over?" - The Pentagon's Fake Jihadists

Bookworms in Search of Dinner

More Bookworms After Finding Dinner

I was typing away in a cafe when the wall started to tremble in front of me. A man sitting on the other side of the cafe said, "Did you feel that?"

I thought, yes, it felt like someone was trying to shake the wall loose from its foundations for about 15 seconds and then gave up because it was too well anchored.

Seems that everything shaken wasn't that firmly attached.

For a few minutes from Georgia to Maine, the question rang out: What was that? The answer — a rare East Coast earthquake, magnitude 5.8 — was far down on the list for most not used to the earth shaking beneath them.

In Washington and New York, their nerves still raw, thoughts instantly turned to terrorism. In small towns and rural areas near the epicenter and elsewhere, guesses ran the gamut: A truck crash or train derailment. A plane breaking the sound barrier. Worse, a nuclear reactor exploding.
There ended up being no known deaths or serious injuries from Tuesday's quake, but cracks appeared in the Washington Monument and the National Cathedral, which had three capstones break off its tower. Windows shattered and grocery stores were wrecked in Virginia, where the quake was centered. The White House and Capitol were evacuated.
 So, some new excitement leads up to another commemoration of the 9/11 events? Maybe HAARP was briefly activated? Nah. They've probably had enough fun with that toy already this year.

Tom Engelhardt of the Tom Dispatch is an enormously well-versed source of information on matters concerning defense and intelligence gathering.

In the following essay, Tom illuminates the concept of "jihadists" for us and brings a fresh, new light onto the latest occurrences happening through the use of the internet and the claiming of credit for these events by unknown sources.

“Or consider what American computer specialists are doing on the Internet, perhaps terrorist leaders’ greatest safe haven, where they recruit, raise money, and plot future attacks on a global scale. American specialists have become especially proficient at forging the onscreen cyber-trademarks used by Al Qaeda to certify its Web statements, and are posting confusing and contradictory orders, some so virulent that young Muslims dabbling in jihadist philosophy, but on the fence about it, might be driven away.”
Right. But we've known for over 20 years that no one really knew whom were sending those emails before they were validated. So, this is news to whom?

The Pentagon's Fake Jihadists

Tom Engelhardt

Put what follows in the category of paragraphs no one noticed that should have made the nation’s hair stand on end. This particular paragraph should also have sent chills through the body politic, launched warning flares, and left the people’s representatives in Congress shouting about something other than the debt crisis.
Last weekend, two reliable New York Times reporters, Eric Schmitt and Thom Shanker, had a piece in that paper’s Sunday Review entitled “After 9/11, an Era of Tinker, Tailor, Jihadist, Spy.” Its focus was the latest counterterrorism thinking at the Pentagon: deterrence theory. (Evidently an amalgam of the old Cold War ideas of “containment” and nuclear deterrence wackily reimagined by the boys in the five-sided building for the age of the jihadi.) Schmitt and Shanker’s article was, a note informed the reader, based on research for their forthcoming book, Counterstrike: The Untold Story of America’s Secret Campaign Against Al Qaeda.
And here’s the paragraph, buried in the middle of their piece, that should have stopped readers in their tracks:
“Or consider what American computer specialists are doing on the Internet, perhaps terrorist leaders’ greatest safe haven, where they recruit, raise money, and plot future attacks on a global scale. American specialists have become especially proficient at forging the onscreen cyber-trademarks used by Al Qaeda to certify its Web statements, and are posting confusing and contradictory orders, some so virulent that young Muslims dabbling in jihadist philosophy, but on the fence about it, might be driven away.”
The italics are mine, and as the authors urge us to do, let’s consider for a moment this tiny, remarkably bizarre window into military reality. As a start, just where those military “computer specialists” are remains unknown. Perhaps they are in the Pentagon, perhaps somewhere in the National Counterterrorism Center, but whoever and wherever they are, here’s the question of the week, possibly of the month or the year: Just what kind of “orders” can they be posting “so virulent that young Muslims dabbling in jihadist philosophy, but on the fence about it, might be driven away”?
And even if our computer experts really were capable of turning wavering young Muslims back from the shores of jihadism - and personally I wouldn’t put my money on the Pentagon’s skills in that realm - what about young Muslims (or older ones for that matter) who weren’t on that fence and took those “orders” seriously? What exactly are they being “ordered” to do?
Talk about a potential Frankenstein situation - and all we can do is ask questions. Just what monsters, for example, might the military’s computer specialists be helping to forge? And who exactly is supervising those “specialists” and their vituperative messages? (Especially since they are unlikely to be in English, and we already know that Arabic, Pashto, Dari, and Farsi speakers at the higher levels, or even lower levels, of the Pentagon are, at best, few and far between.)
Keep in mind that we already have an example of a similarly wacky program lacking meaningful oversight that went awry, hit the headlines, and resulted in the perfectly real deaths of at least one U.S. Border Patrol agent and undoubtedly many more Mexicans.

The Bureau of Alcohol, Tobacco, Firearms, and Explosives launched its now infamous gun-tracking program in Arizona in late 2009, under the moniker “Operation Fast and Furious” (a reference to a series of movies about street car racers). It was meant to track cross-border gun sales to Mexico’s drug cartels by actually letting perfectly real weapons cross the border - more than 2,000 of them, as it turned out. ATF agents, according toWashington Post report, would be “instructed not to move in and question the [gun runners] but to let the guns go and see where they eventually ended up.” And so they did for more than a year and, not exactly surprisingly, those weapons ended up “on the street” and in the ugliest of hands. a
The Daily Show’s Jon Stewart asked an apt question about the program: “The ATF plan to prevent American guns from being used in Mexican gun violence is to provide Mexican gangs with American guns. If this is the plan that they went with, what plan did we reject?”
Assumedly, the same question could be asked of the military’s online anti-jihadist program, involving as it evidently does messages believed to be too extreme for wavering young Muslims with an interest in the jihadi “philosophy.” Shouldn’t someone start asking whether those Pentagon’s “orders” to jihadis might not turn out to be the online equivalent of so many loose guns?
After all, what are those specialists ordering them to do? And if actual jihadis actually tried to follow those “confusing and contradictory orders,” possibly being confused and contradictory kinds of guys, if they took them seriously and interpreted them in ways not predicted by their putative Pentagon handlers, is there a possibility that anyone could die as a result? And if such messages turn off some prospective jihadis, isn’t it possible that they might turn on others? And could they, for instance, have been ordered to commit confused and contradictory acts that might end up involving Americans?
Really, someone should blow Schmitt and Shanker’s paragraph up to giant size, tack it up somewhere in the Capitol, and call for a congressional investigation. If the ATF could do it, why not the Pentagon? And honestly, is this how Americans want to see their tax dollars spent?
Read the Schmitt and Shanker piece and you’ll get a sense of what Shakespeare might have called the “oerweening pride” rife in the Pentagon when it comes to their skills and their ability to put one (or two, or three) over on the jihadist community. So pleased with themselves were they, that they evidently couldn’t help bragging to the two reporters about their skills. The old phrase “too smart for your own good” comes to mind. It’s enough to make you worry, even based on so little information (which the new book from the two reporters may significantly amplify).
And by the way, if you want another unsettling analogy, when it comes to off-the-wall ideas for “deterring” jihadist networks, check out the major record companies and their efforts to deter communities and individuals from illegally downloading music.

The Recording Industry Association of America, representing the four major record labels, decided to make a cautionary example of Jammie Thomas-Rasset, a Minnesota mom, by suing her “for illegally downloading and sharing 24 songs on the peer-to-peer file-sharing network Kazaa in 2006.”  So far, the organization has dragged her through three trials, getting terrible publicity.  Even if they win and leave her in hock for the rest of her life, do you think for one second that they will have made a dent in the world of illegal downloads or deterred anyone?  Just ask your kid.
Don't think deterrence here, think blowback.
Honestly, if Schmitt and Shanker’s claim is accurate, you should be shaking in your boots. And someone on Capitol Hill should be starting to ask some relevant questions, including this one: Could “computer specialists” in the employ of the Pentagon be responsible for your death in a future terrorist attack?