Reaganites Did It! (Paul Krugman) Markets set to plunge again (Jim Rogers)

“This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. ... All in all, I think we hit the jackpot.” So declared Ronald Reagan in 1982, as he signed the Garn-St. Germain Depository Institutions Act. He was, as it happened, wrong about solving the problems of the thrifts. On the contrary, the bill turned the modest-sized troubles of savings-and-loan institutions into an utter catastrophe. But he was right about the legislation’s significance. And as for that jackpot — well, it finally came more than 25 years later, in the form of the worst economic crisis since the Great Depression.

One of my major themes since beginning this blog which deals with politics, economics and the pervasive (odoriferous) American culture that informs each is that the Reaganites did it (put all these mysteriously soon-to-fail systems in place) long ago. Paul Krugman published an essay today that agrees with me (and multitudes of others) and documents one more of those strange occurrences in law that changed policy in such a way as to guarantee (almost 30 years ago) that those at the top would always walk away with the spoils and the little guys would be left confused about why, when they could hardly get a loan, they were always designated the ultimate bankers. (Emphasis marks were added - Ed.)

For the more one looks into the origins of the current disaster, the clearer it becomes that the key wrong turn — the turn that made crisis inevitable — took place in the early 1980s, during the Reagan years. Attacks on Reaganomics usually focus on rising inequality and fiscal irresponsibility. Indeed, Reagan ushered in an era in which a small minority grew vastly rich, while working families saw only meager gains. He also broke with longstanding rules of fiscal prudence. On the latter point: traditionally, the U.S. government ran significant budget deficits only in times of war or economic emergency. Federal debt as a percentage of G.D.P. fell steadily from the end of World War II until 1980. But indebtedness began rising under Reagan; it fell again in the Clinton years, but resumed its rise under the Bush administration, leaving us ill prepared for the emergency now upon us. The increase in public debt was, however, dwarfed by the rise in private debt, made possible by financial deregulation. The change in America’s financial rules was Reagan’s biggest legacy. And it’s the gift that keeps on taking. The immediate effect of Garn-St. Germain, as I said, was to turn the thrifts from a problem into a catastrophe. The S.& L. crisis has been written out of the Reagan hagiography, but the fact is that deregulation in effect gave the industry — whose deposits were federally insured — a license to gamble with taxpayers’ money, at best, or simply to loot it, at worst. By the time the government closed the books on the affair, taxpayers had lost $130 billion, back when that was a lot of money. But there was also a longer-term effect. Reagan-era legislative changes essentially ended New Deal restrictions on mortgage lending — restrictions that, in particular, limited the ability of families to buy homes without putting a significant amount of money down. These restrictions were put in place in the 1930s by political leaders who had just experienced a terrible financial crisis, and were trying to prevent another. But by 1980 the memory of the Depression had faded. Government, declared Reagan, is the problem, not the solution; the magic of the marketplace must be set free. And so the precautionary rules were scrapped. . . . We weren’t always a nation of big debts and low savings: in the 1970s Americans saved almost 10 percent of their income, slightly more than in the 1960s. It was only after the Reagan deregulation that thrift gradually disappeared from the American way of life, culminating in the near-zero savings rate that prevailed on the eve of the great crisis. Household debt was only 60 percent of income when Reagan took office, about the same as it was during the Kennedy administration. By 2007 it was up to 119 percent. . . . There’s plenty of blame to go around these days. But the prime villains behind the mess we’re in were Reagan and his circle of advisers — men who forgot the lessons of America’s last great financial crisis, and condemned the rest of us to repeat it.

Read the rest here. "Legendary investor" Jim Rogers, who was always Lou Rukeyser's favorite huggy bear (throughout the "boom" Reagan/Bush years for business) warns that the markets are ready to dive off the cliff again. (Emphasis marks added - Ed.)

. . . Investment gurus Jim Rogers and Marc Faber agree on one thing. They see a major correction looming in equity markets with a currency effect for the US, since the current rally has been mostly based on printed money, a kind of 'reverse Robin Hood policy' of governments, to steal from the peasants to give to the rich. As with Faber, Rogers is mostly to be seen being interviewed on CNBC Asia or Europe, since their views are to put it mildly, somewhat negative on the US Dollar and the prospects for green shoots in the US economy. Legendary investor Jim Rogers told CNBC on Wednesday he is not short or hedged in anything at the moment, but buying Japanese Yen. The next crisis in his eyes is in currencies which makes sense since sovereign states have taken much of the bad debt from the banks and piled them onto their own balance sheets. The stock market may hit new lows this year or the next as the current rally has been largely caused by the money printed by central banks and fundamental problems remain unsolved, he said. His views echo those of renowned bear Marc Faber, who told CNBC last week that the rises in share prices did not mean the world was embarking on a path of sustainable economic growth. "I'm not buying shares if that's what you mean. Not at all," Rogers told Squawk Box Asia. Governments have not solved the essential problems that caused the crisis but instead they "flooded the world with money," according to Rogers. Trying to solve the problem of too much consumption and too much debt with more consumption "defies belief" and will not work, he said. The price of oil is also likely to remain high despite the fact that the recession is taking its toll on demand, he said. "You know supplies worldwide are declining at the rate of anywhere from 4% to 6% a year, yes, demand is down at the moment but in longer term, unless somebody discovers a lot of oil very quickly, the surprise is going to be how high the price of oil stays, and how high it eventually goes," Rogers added. The next financial meltdown will be in the currency markets, as central banks around the world have been printing money, giving the appearance of massive government intervention to weaken their currencies, legendary investor Jim Rogers, Chairman, Rogers Holdings, told CNBC on Wednesday. "At the moment I have virtually no hedges, I suspect it is going to be the next problem, big crisis will be in the currency markets, I'm trying to figure out what to do there," Rogers said. "If I am right, you're going to see a lot of currency problems in the next decade or two," Rogers said. Governments around the world are doing their best to destroy currencies, many currencies in fact. And people need to understand that; if they don't understand it now, they're going to find out, they're going to find out the hard way," he added. Marc Faber agrees that we will see a correction unfold in the equity markets. Faber said: “In general, the markets were very oversold on 6 March 2009 and there were some favourable technical divergences [which resulted in the subsequent rally].” “When the S&P made a new low, many markets and stocks were higher than they were in October-November. That means many stocks had entered bull markets including Asian stock markets,” said Faber, pointing out that now, most stocks were up by more than 100%."

Read the rest here. Not exactly green shoots for all. Suzan ______________________

"Paulson's Stunning Use of Federal Power"

I'm not happy with the information we are receiving from the MSM and others who have reported on the U.S. government's actions regarding where the ultimate responsibility lies for the Fannie Mae/Freddy Mac debacle (if they bothered to do so at all). It seems to me that this has become just another in a long line of unexpected financial events, stemming from the deregulation madness brought by Congressional Rethuglicans gone wild that taxpayers are supposed to think is only one more "nothing to see here, move along" occurrence - a regular part of the business cycle (or at least what has happened to the business cycle under Rethuglican Congressional control). The fishiest part this time is that taxpayers, who have been expected to accept with great humility questionable business/accounting practices for over a decade now (or much longer if you are old enough to remember the financial chicanery that began in the early 1980's during Reagan's tender embrace and has extended through both Bushes and Clinton), have begun to notice that the chickens have found themselves a roost in the taxpayers' savings, as there is no other way to define what happens when the taxpayers have to pick up the bills (and make them good) for the risk taking gone bad of their betters: the financial movers and shakers (remember Phil Gramm recently deigning to call anyone complaining about this loss of purchasing power "whiners?"). (Emphasis marks and some editing are mine.) Steven Pearlstein reports for The Washington Post his view of what it means and why the Treasury has purchased the mortgage-backed securities of Fannie Mae and Freddie Mac with "a tidal surge of federal cash . . . . changing the landscape of housing finance in America."

Secretary Henry M. Paulson Jr. has taken responsibility for assuring that low-interest loans will continue to flow into the country's hard-hit housing markets. Not since the early days of the Roosevelt administration, at the depth of the Great Depression, has the government taken such a direct role in the workings of the financial system. Although the details of yesterday's takeover are complex, the rationale is quite simple: to restore some semblance of normalcy to the housing market. Paulson and other policymakers think that until that happens, neither financial markets nor the wider economy will be able to regain their footing. Fannie and Freddie did not go gently into conservatorship. Although their access to badly needed equity capital had dried up and their borrowing costs had increased, they had hoped that they could muddle through by raising fees and demanding higher interest rates from borrowers. But that plan was cut short when Paulson, backed by Fed Chairman Ben Bernanke and their newly empowered regulator, James Lockhart, concluded that Fannie and Freddie could no longer reconcile their sometimes-conflicting obligations to shareholders and homeowners without posing additional risks to an already shaken financial system. . . . . . . . Under the deal they could not refuse, Fannie and Freddie directors and top executives will lose their jobs. Shareholders will lose their dividends, voting rights and most of their ownership stake, while agreeing to pay dearly for the government's money and backing. Left unharmed will be holders of trillions of dollars in Fannie and Freddie debt - or securities backed by mortgages that Fannie and Freddie have insured against default - who will get all their money back, with interest. In figuring out where all this goes, it is useful to understand how we got to this point. Until this weekend, Fannie and Freddie have been unique entities - for-profit, shareholder-owned companies that were required by government charters to provide low-cost capital to secondary mortgage markets in good times and bad. And for most of the past 40 years, the companies have managed to balance those missions fairly successfully. Shareholders have earned a better-than-average return on their investment, while homeowners have had access to mortgages that not only have lower rates than in other countries, but rates that they can lock in for up to 30 years. But in the mid-1990s, things began to change. Rather than being satisfied with modest growth, Fannie and then Freddie began promising Wall Street double-digit earnings growth, which required them to grow their balance sheets well beyond what was necessary to assure liquidity in the mortgage market. Instead of just buying mortgages, insuring them and selling them in packages to investors, they bought more of them for their own portfolios, using ever-increasing amounts of borrowed money. Buying their own securities was profitable, but it left them highly exposed if anything went really wrong with the housing market, which is exactly what has happened. By 2005, however, Fannie and Freddie found they were losing market share to private competitors offering new, highly profitable mortgage products that they had generally ignored - variable-rate mortgages to homeowners with poor credit histories who offered little or no documentation and borrowed more than 80 percent of the estimated value of their property. To varying degrees, Fannie and Freddie decided to jump into these markets, both by insuring and packaging these mortgages and keeping some of them on their own books. That decision, too, has now come back to haunt them. It is fair to blame Fannie and Freddie executives for these misjudgments, although they were no more misguided than others in the industry. Some of the blame also goes to Fannie and Freddie's regulators - both Lockhart and his predecessor - who failed to use their limited powers to rein in the companies' growth. . . . . . . . It will now take several years at least for Fannie and Freddie to dig out of their financial holes, even with the infusion of taxpayer money. But that will not resolve the long-standing question of whether a for-profit company with some sort of government backing is the best way to assure a steady flow of low-cost capital to the housing markets. The crisis reminds us that, left on its own, the private sector will over-invest when the housing market is hot and then abandon the market when boom turns to bust. That's why Fannie and Freddie were invented, and why keeping them afloat now is crucial. But the lesson from the recent debacle is that if we are going to rely on government to bail out private entities, then government ought to have a much stronger hand in making sure a rescue is never needed.

- - - - - - - Meanwhile, back at the ranch, Sarah Palin continues to avoid all serious questions about her truthiness quotient as she skulks under "the protective bubble of the" non-"Straight Talk Express." And does she know "that in the days prior to Roe v. Wade, being an unwed mother was not publicly acceptable?" Perhaps someone should explain to her that:

Only since the women’s movement and the availability of legal abortion has the terrible stigma that was unmarried motherhood been eased, if not erased. As an advisory group to the Carter administration found, the only alternative to abortion in cases of unwanted pregnancy was motherhood, suicide or madness. Suicide was not uncommon in the face of disgrace, family shunning and abandonment. Many women died from back alley or self-inflicted abortions, and even more were maimed. Anti-abortionists only began embracing “fallen women” when they became rare due to safe, legal abortion.

- - - - - - - And I may be sorry that I am quoting this article from This Can't Be Happening's web site, but it certainly seems to present some solid reporting based on what we know of recent events.

According to reporting in the latest edition of the National Enquirer, a paper routinely maligned as a grocery-store scandal sheet, but actually boasting a skilled investigative reporting team that, as the New York Times admits, makes what passes for investigative reporting these days at most corporate media shops look like bad jokes . . . Palin sought to cover up, perhaps even from John McCain, her 17-year-old daughter’s pregnancy until after she was safely nominated. Her plan, says the Enquirer, which spoke to acquaintances and neighbors in Palin’s hometown of Wasilla, Alaska, had been to get through the convention, then get daughter Bristol married off to the infant-to-be’s father, 18-year-old Levi Johnston, and only then disclose the pregnancy. That devious scheme was reportedly scotched by Bristol, who the Enquirer reports was “at war” with her mother over the idea of a politically motivated shotgun wedding. According to the Enquirer, it was that paper’s disclosure to both Palin and the parents of Johnston, that it was ready to publish the pregnancy story, that led Palin to break the bombshell news about the pregnancy ahead of her nomination — a move that left the McCain campaign embarrassed and exposed to ridicule over its obvious haste and undeniable lack of any vetting of its vice presidential nominee. Why should we care about this domestic melodrama? Because, besides revealing the casualness with which the 72-year-old, health-impaired McCain is willing to treat the job of picking his alternate and likely mid-term successor, it reveals the deceptiveness and the inhumane, ruthless fanaticism of Palin, a candidate who is trying to market herself to voters as “Everymom.” Few real moms or dads in their right mind would try to force a 17-year-old daughter and an 18-year-old boy to get married, simply because they had accidentally conceived a baby. All the odds predict that such parentally imposed pairings are doomed to failure, with much unnecessary trauma and psychic damage to both kids and to their future child along the way. Is Palin afraid her fellow believers on the religious Right would condemn her if her daughter were allowed to bear her child as a single parent? Is she afraid the child would be a (gasp) “bastard”? This kind of religious fanaticism, in which the welfare of young children is run roughshod over for the sake of biblical correctness, has been evident and roundly condemned by Americans when practiced in Taliban-run Afghanistan, or Wahabi-run Saudi Arabia, where women don’t get any choices about their futures. We don’t need it coming from the White House.

Suzan

Have the NeoCons Guaranteed US A Nuclear Attack or Just Economic Failure?

Who says you can't learn something new when you are old and over the hill? (Okay, I'm only kidding a little bit here.) Today I learned the following about the MSM's selling (and you thought it was only an oversight when the New York Times hired Bill Kristol to write serious editorials after his complete muffing (spelled "outright lying") of the rationale for the Iraq invasion?) of our past and future wars (from Antiwar.com):

1. Wolf Blitzer used to work for AIPAC. 2. He interviewed Tzipi Livni without sharing with the international audience any of her history (or his).

Of course, the international viewers knew (more or less) her background; it's just the naive (uninformed or "don't care") Americans who think she's merely a good example of smart (international) women lawyers finally getting ahead.

Israeli Foreign Minister Tzipi Livni was interviewed on CNN's Late Edition by Wolf Blitzer, who himself once worked for AIPAC. Livni has an interesting resume. Her father was one of the Irgun terrorists who blew up the King David hotel in 1946 and later massacred Arab villagers in Deir Yassin. As a teenager, Livni participated in demonstrations on behalf of the nationalist extremist group Greater Israel, which advocated expelling all Arabs and extending Israeli domination over all of historic Palestine to include the West Bank, parts of Jordan, up to the Litani River in Lebanon to the north, and down to include Sinai and the Suez Canal in the south and west.

I humbly received this new-found, good-fairy's gift of knowledge by reading Paul Craig Roberts' dissection (published today) of what has really happened in the latest installment of hot war news between Georgia, Russia and the U.S., and it will not help you sleep well tonight, no matter what our leaders trumpet from the parapets. And Roberts (ex-stodgy economist and Ronald Reagan's Assistant Secretary of the Treasury) has jumped off the professional reporting cliff here as his passionate (profane/vulgar) language will keep you awake until the end of the essay if the facts inside it don't. But, please, read it yourself. It's an eye opener for those of us who fail to regularly read The Asia Times, et al. Oh, and don't miss the advice that Pravda feels free to give George W. Bush, President of the United States. (Also, do not miss the comments at the end - the knowledge shown there is almost unassailable - even the ones that are somewhat inaccurate are amazing in their comprehension of all the players' parts.) __________________________________________

Will American Insouciance Destroy the World? By Paul Craig Roberts 13/08/08 "ICH" --- - The neoconned Bush Regime and the Israeli-occupied American media are heading the innocent world toward nuclear war. Back in the Reagan years, the National Endowment for Democracy was created as a cold war tool. Today the NED is a neocon-controlled agent for US world hegemony. Its main function is to pour US money and election-rigging into former constituent parts of the Soviet Union in order to ring Russia with American puppet states. The neoconservative Bush Regime used the NED to intervene in Ukrainian and Georgian internal affairs in keeping with the neoconservative plan to establish US-friendly and Russia-hostile political regimes in these two former constituent parts of Russia and the Soviet Union. The NED was also used to dismember the former Yugoslavia with its interventions in Slovakia, Serbia, and Montenegro. According to Wikipedia, Allen Weinstein, who helped draft the legislation establishing NED, told the Washington Post in 1991 that much of what the NED does “today was done covertly 25 years ago by the CIA.” The Bush Regime, having established a puppet, Mikhail Saakashvili, as president of Georgia, tried to bring Georgia into NATO. [For readers too young to know, the North Atlantic Treaty Organization was a military alliance between the US and Western European countries to resist any Soviet move into Western Europe. There has been no reason for NATO since the Soviet Union’s internal political collapse almost two decades ago. The neocons turned NATO into another tool, like the NED, for US world hegemony. Subsequent US administrations violated the understandings that President Reagan had reached with Mikhail Gorbachev, the last Soviet leader, and have incorporated former parts of the Soviet empire into NATO. The neocon goal of ringing Russia with a hostile military alliance has been proclaimed many times.] Western European members of NATO balked at the admission of Georgia, as they understood it as a provocative affront to Russia, on whom Western Europe is dependent for natural gas. Western Europeans are also disturbed at the Bush Regime’s intentions to install ballistic missile defenses in Poland and the Czech Republic as the consequence will be Russian nuclear cruise missiles targeted on European capitals. Europeans don’t see the advantage of helping the US block Russian nuclear retaliation against the US at the expense of their own existence. Ballistic missile defenses are not useful against cruise missiles. Every country is tired of war except for the US. War, including nuclear war, is the neoconservative strategy for world hegemony. The entire world, except for Americans, knows that the outbreak of armed conflict between Russian and Georgian forces in South Ossetia was entirely due to the US and its Georgia puppet, Saakashvili. Americans, alone in the world, are unaware that the hostilities were initiated by Saakashvili, because Bush, Cheney and the Israeli-occupied American media have again lied to them. Everyone else in the world knows that the unstable and corrupt Saakashvili, who proclaims democracy and runs a police state, would not have taken on Russia by attacking South Ossetia unless given the go-ahead by Washington. The purpose of the Georgian attack on the Russian population of South Ossetia is twofold: To convince Europeans that their action in delaying Georgia’s NATO membership is the cause of “the Russian aggression” and that to save Georgia from conquest Georgia must be given NATO membership. To ethnically cleanse South Ossetia of its Russian population. Two thousand Russian civilians were targeted and killed by the US-equipped and trained Georgian Army, and tens of thousands fled into Russia. Having achieved this goal, Saakashvili and his puppet-masters in Washington quickly called for a cease fire and a halt to “the Russian invasion.” The hope is that the Russian population will be afraid to return or can be prevented from returning, thus removing the secessionist threat. No doubt the Bush Regime can con the insouciant American population, just as it did with Iraqi weapons of mass destruction, Iranian nukes, and 9/11 itself, but the rest of the world is not buying it, least of all Moscow, the Asia Times, and not even America’s bought-and-paid-for European allies. Writing in the Asia Times, Ambassador M. K. Bhadrakumar, a former career diplomat in the Indian Foreign Service, notes the disinformation that is being peddled by the Bush Regime and the US media and reports that “at the outbreak of violence, Russia had tried to have the United Nations Security Council issue a statement calling on Georgia and South Ossetia to immediately lay down weapons. However, Washington was disinterested.” Amb. Bhadrakumar notes that the American and Georgian resort to violence and propaganda has brought an end to the Russian government’s belief that diplomacy and good will can bring about a settlement of the South Ossetia issue. If Russia wished, Russia could terminate Georgia’s existence as a separate country at will, and there is nothing the US could do about it. It is certain that the Georgian invasion of South Ossetia was a Bush Regime orchestrated event. The American media and the neocon think tanks were ready with their propaganda blitzes. Neocons had ready a Wall Street Journal editorial page article for Saakashvili that declares “the war in Georgia is a war for the West.” Faced with the collapse of his army when Russia sent in troops to protect South Ossetians from the Georgian troops, Saakashvili declared: “This is not about Georgia any more. It is about America, its values.” The neocon Heritage Foundation in Washington, D.C., quickly called a conference hosted by warmonger Ariel Cohen, “Urgent! Event: Russian-Georgian War: A Challenge for the U.S. and the World.” The Washington Post lifted its skirts and spread wide its legs to neocon Robert Kagen’s war drums, “Putin Makes His Move.” Only a fool like Kagen could think that if Putin intended to invade Georgia he would do so from Beijing, or that after sending the American-trained Georgian army in flight, he would not continue and conquer all of Georgia in order to put an end to American machinations on Russia’s most sensitive border, machinations that are likely to eventually end in nuclear war. That despicable whore, the New York Times, spread her legs for Billy Kristol’s rant, “Will Russia Get Away With It?” Kristol thunders against “dictatorial and aggressive and fanatical regimes” that “seem happy to work together to weaken the influence of the United States and its democratic allies.” Kristol presents a new axis of evil--Russia, China, North Korea and Iran--and warns against “delay and irresolution” that “simply invite future threats and graver dangers.” In other words, “attack Russia now.” Dick Cheney, the insane American Vice President telephoned Saakashvili to express US solidarity with Georgia in the conflict with Russia and declared: “Russian aggression must not go unanswered.” Cheney’s telephone call is like Great Britain’s “guarantee” to Poland against Nazi Germany. Only a complete idiot would tell Saakashvili anything other than “to cease immediately.” What must be the effect on US Intelligence services and the US military of Cheney’s propagandistic and irresponsible statement of US support for Georgia’s war crimes? Does anyone really believe that the CIA or any US intelligence service told the vice president that Russia opened the conflict with an invasion? Russian troops arrived in South Ossetia after thousands of Ossetians had been killed by the Georgian attack and after tens of thousands of Ossetians had fled into Russia to escape the Georgian attack. According to news reports, Russian forces have captured Americans who were with the Georgian troops directing their attack on civilians. The US military certainly has no resources for a war against Russia on top of lost wars in Iraq and Afghanistan and a planned war with Iran. With its Georgian venture, the Bush Regime is guilty of a new round of war crimes. What will be the consequence? Many will reply that having got away with 9/11, Afghanistan, Iraq, and with its preparations for attacking Iran, the Bush Regime will get away with its Georgian venture as well. Possibly, however, this time the Bush Regime has overreached. Certainly Russia now recognizes that the US is determined to exert hegemony over Russia and is Russia’s worst enemy. China realizes the US threat to its own energy supply and, thereby, economy. Even America’s European allies, chafing under their role of supplying troops for America’s Empire, must now realize that being an American ally is dangerous and has no benefits. If Georgia becomes a NATO member and renews its attack on South Ossetia, it must drag Europe into a war with Russia, a main supplier of energy to Europe. Moreover, if Russian troops are sent across European frontiers, there is nothing to stop them. What does America offer Europe, aside from the millions of dollars it pays to buy off Europe’s political leaders to insure that they betray their own peoples? Nothing whatsoever. The only military threat that Europe faces comes from being dragged into America’s wars for American hegemony. The US is financially bankrupt, with budget and trade deficits that exceed the combined deficits of the rest of the world together. The dollar has wilted. The American consumer market is dying from the offshoring of American jobs and, thereby, incomes, and from the wealth effect of the real estate and derivatives collapses. The US has nothing to offer Europe. Indeed, American economic decline is killing European exports by driving up the value of the euro. America long ago lost the moral high ground. Hypocrisy has become America’s best known hallmark. Bush, the invader of Afghanistan and Iraq on the basis of lies and deception, thunders at Russia for coming to the defense of its peacekeepers and Russian citizens in South Ossetia. Bush, the vampire who ripped Kosovo out of Serbia’s heart and handed it to the Muslims, has taken an adamant stand against other separatist movements, especially the South Ossetians who wish to be part of the Russian Federation. The neoconned Bush Regime is furious that the Russian bear was not intimidated by the US supported aggression of the American puppet state, Georgia. Instead of accepting the act of American hegemony that the neocon script called for, Russia sent the Americanized Georgian army fleeing in fear. Having failed with weapons, the Bush Regime now unleashes the rhetoric. The White House is warning Russia that failure to acquiesce to US hegemony could have a “significant, long-term impact on relations between Washington and Moscow.” Do the morons who comprise the Bush Regime really not understand that short of a surprise nuclear attack on Russia there is nothing whatsoever the US can do to Moscow? The Bush Regime owns no Russian currency that it can dump. The Russians own US dollars. The Bush Regime owns no Russian bonds that it can dump. The Russians own US bonds. The US can cut Russia off from no energy supplies. Russia can cut America’s European allies off from energy. President Reagan negotiated the end of the cold war with Soviet President Gorbachev. The neoconservatives, whom Reagan fired and drove from his administration, were furious. The neocons had hoped to win the cold war, thereby establishing American hegemony. The Republican Establishment reestablished its hegemony under Bush 1st that it had lost to Ronald Reagan. With this feat, intelligence was driven from the Republican Party. The neocons engineered their comeback with the First Gulf War and their propaganda, pure lies, that Iraqi troops bayoneted Kuwait babies in hospitals. The neocons made a further comeback with President Clinton, whom they convinced to bomb Serbia in order to permit separatist movements to become independent states dependent on America. With Bush 2nd, the neocons took over. Their agenda, American world hegemony, includes Israeli hegemony in the Middle East. So far the schemes of these ignorant and dangerous ideologues have come a cropper. Iraq, formerly in the hands of secular Sunnis who were a check on Iran, is, after the American invasion and occupation, in the hands of religious Shi’ites allied with Iran. In Afghanistan, the Taliban are resurgent, and a large NATO/US army there is unable to control the situation. One consequence of the neocons’ Afghan war has been the loss of power of the American puppet president of Pakistan, a Muslim country armed with nuclear weapons. The puppet president now faces impeachment, and the Pakistani military has informed the Americans to stop conducting military operations in Pakistani territory. The American puppets in Egypt and Jordan might be next to fall. In Iraq, the Shi’ites, having completed their ethnic cleansing of Sunnis from neighborhoods, have declared a cease fire in order to contradict the US propaganda that American withdrawal would lead to a blood bath. Negotiations on withdrawal dates are now underway between the Americans and the Iraqi government, which is no longer behaving like a puppet. Last year Hugo Chavez ridiculed Bush before the UN. Russia’s Putin ridiculed Bush as Comrade Wolf. On August 12, 2008, Pravda ridiculed Bush, “Bush: Why don’t you shut up.” Americans may think they are a superpower before whose presence the world trembles. But not the Russians. Those Americans stupid enough to think that America’s “superpower” insures its citizens from danger need to read the total contempt shown for President Bush in Pravada: “President Bush, Why don’t you shut up? In your statement on Monday regarding the legitimate actions of the Russian Federation in Georgia, you failed to mention the war crimes perpetrated by Georgian military forces, which American advisors support, against Russian and Ossetian civilians “President Bush, Why don’t you shut up? Your faithful ally, Mikhail Saakashvili, was announcing a ceasefire deal while his troops, with your advisors, were massing on Ossetia’s border, which they crossed under cover of night and destroyed Tskhinvali, targeting civilian structures just like your forces did in Iraq. “President Bush, Why don’t you shut up? Your American transport aircraft gave a ride home to thousands of Georgian soldiers from Iraq directly into the combat zone. “President Bush, Why don’t you shut up? How do you account for the fact that among the Georgian soldiers fleeing the fighting yesterday you could clearly hear officers using American English giving orders to “Get back inside” and how do you account for the fact that there are reports of American soldiers among the Georgian casualties? “President Bush, Why don’t you shut up? Do you really think anyone gives any importance whatsoever to your words after 8 years of your criminal and murderous regime and policies? Do you really believe you have any moral ground whatsoever and do you really imagine there is a single human being anywhere on this planet who does not stick up his middle finger every time you appear on a TV screen? Do you really believe you have the right to give any opinion or advice after Abu Ghraib? After Guantanamo? After the massacre of hundreds of thousands of Iraqi citizens? After the torture by CIA operatives? Do you really believe you have any right to make a statement on any point of international law after your trumped-up charges against Iraq and the subsequent criminal invasion? “President Bush, Why don’t you shut up? Suppose Russia for instance declares that Georgia has weapons of mass destruction? And that Russia knows where these WMD are, namely in Tblisi and Poti and north, south, east and west of there? And that it must be true because there is “magnificent foreign intelligence” such as satellite photos of milk powder factories and baby cereals producing chemical weapons and which are currently being “driven around the country in vehicles”? Suppose Russia declares for instance that “Saakashvili stiffed the world” and it is “time for regime change”? Nice and simple, isn’t it, President Bush? “So, why don’t you shut up? Oh and by the way, send some more of your military advisors to Georgia, they are doing a sterling job. And they look all funny down the night sight, all green.” The US is not a superpower. It is a bankrupt farce run by imbeciles who were installed by stolen elections arranged by Karl Rove and Diebold. It is a laughing stock, that ignorantly affronts and attempts to bully an enormous country equipped with tens of thousands of nuclear weapons. A population that tolerates the insane Bush Regime and its criminal neocon operatives has no claims to life on earth. Comments (30)

Not really a week with good prospects for peace on earth, good will to wo(men) is it? Suzan __________________________________