Thursday, October 27, 2011

War and Serfdom: Is This The World We Really Want to Live In? (The Murder of Gaddafi, and the War Crimes of Western Powers) & Defense Contractors Steal Trillions (Defending Massive Military Spending)




Is this the world you want to live in (and have your families grow up in)? It exactly mirrors pre-WW2 Germany in the propaganda that we see daily about the "need" to bomb/subdue criminal sovereign entities - nations or people (Islamists, socialists, communists, countries denying their resources to US).

I have a personal story from my 20+-year career in aerospace software defense that intimately addresses our current national plight that I've never told anyone before, but if you read Bernie Sanders' essay at the bottom of this page, I really don't have to tell it as you will understand enough about it from Bernie's courageous Congressional actions to guess what type of story it is (and it just embroiders the first tales of strife we read about below with which we are now seemingly fatally beset).

[This blog is hoping for an angel to descend and help to defray expenses. Calling all angels!]

War and Serfdom: Is This The World We Really Want to Live In?

By Eric Blair


October 25, 2011 Activist Post 
I’m raising three sons in a world that I don’t want them to live in.  A world of hate, deception, war, injustice, and serfdom.  A world that seems out of our control to change.  If given a choice, who would want to live in that world?

Yet, we try to live the change that we want to see. We don’t have TV, we homeschool our boys, and we’ve opted out of the system as much as possible. We eat healthy, don’t use dangerous household chemicals, and shop almost exclusively at the local level.  We grow food, keep chickens, recycle, and live as simply and independently as feasible.  And we’ve taught our children that the principles of peace and love carry more weight than patriotism or any other manufactured beliefs.

But sometimes personal change doesn’t seem to be good enough to counteract a powerful establishment intent on having more war and more power.

The idea of peace doesn’t seem to be strong enough to prevent these engineered conflicts.  What do we tell our children of the absolute destruction of Libya [2] over so-called humanitarian concerns?  When dragging the bloody body of the toppled leader through the streets is being hailed as some sort of victory. This, in the same week that Iraq, after all the tragedy there, was deemed mission accomplished for the umpteenth time.

Any peace-loving person who knows the real score of NATO’s Libya invasion must be incredibly disheartened.

Libya, like everywhere else in the world, was not perfect.  Yet, it was a shining example of an independent, prosperous, and secular country in Africa, and it was completely destroyed based on more establishment lies.  And there was nothing anyone could have done to stop it.

America and NATO countries claimed there was a “humanitarian crisis,” illegally seized Gaddafi’s international assets, and fraudulently sold a “no fly” zone to the United Nations. That no fly zone turned into arming radical Islamic rebels and carpet bombing heavily populated cities and critical infrastructure to remove or kill their popular leader Gaddafi [3].  Immoral war crimes all.  And American children are supposed to cheer alongside the television about this “victory”?

Worse yet, all of this was done without any authority by the people or independent oversight by their representatives. Congress was never given a chance to debate or vote on this military action and expenditure.  The media was complicit as usual, selling establishment lies about humanitarian intervention to neuter the anti-war crowd.

 Now, surprise, surprise; NATO is carving up Libya’s vast resources into Western hands as they prepare for their next conquest. There seems to be no force capable of confronting this monster.

The increasingly impotent anti-war protesters who vehemently opposed Bush’s aggressive wars and criminal torture, were suddenly cheering President Obama [4] when he subverted the rule of law for regime change and resource raping.  What’s more, the despised Bush doctrine of preemptive war now seems to be the international model for dealing with any real or manufactured threats, or even minor internal concerns of sovereign nations like in the case of Libya.

The success and spoils from the violent overthrows of these countries seems to have intoxicated those on the winning side.  Drunk with power from having gotten away with such obscene murderous crimes and outright plunder, they’re already bragging about Syria being next, while also setting the stage for taking on Iran. It seems they will stop at nothing to conquer the last holdouts to their control.

Consequently, we’re clearly headed for more bloodshed. So who, if anybody, can possibly stop this killing machine?  It seems very unlikely that Western powers will sober up long enough to see the evil of their ways and quit the path of war on their own.  Can other countries like Russia or China with their combined killing machines stop them? If you look close enough, it appears theWest is actually trying to bait them [5] into a greater conflict.  Or, perhaps, it’s just a predictable byproduct of empire building. Regardless, it’s clear that a bigger war is approaching.

As my boys rapidly approach draft eligibility age, how do I prepare them for a future surely filled with war when they believe in peace?  I keep telling my kids that if enough people wanted peace, we’ll have peace.  But I’m not sure if that’s true anymore.  I want to believe that simply the idea of peace should be enough to unite the masses, but strangely it isn’t.  Everyone remains afraid of whatever the television tells them to fear, or they’re just distracted by their other hardships.

Nonetheless, it’s difficult to imagine a peaceful world given the apathy to Western aggression.  It appears we have no choice but to surrender to this reality until enough people demand that it stops.  And even then, we appear to face an uphill battle.  It boils down to a simple question; do you want to live in a world of war and serfdom or a world of peace and liberty?  We better make up your mind real quick, otherwise we may have no say in the matter.

Here's some serious information you may want to consider before you start dancing in the street over Gaddafi's demise. Or perhaps you're one of those who still believe in American "exceptionalism." And nothing can stop you dancing over dead bodies.


The Murder of Gaddafi, and the War Crimes of Western Powers

Peter Baofu, Ph.D.


October 25, 2011

The jubilant reaction of Western powers and the foes of Muammar Gaddafi to his barbaric murder on October 20, 2011 raises some serious questions about war crimes committed by the Western-backed National Transitional Council (NTC) fighters and NATO forces.

There are two serious violations of international law here, namely, (1) in relation to the Third Geneva Convention in 1929 and (2) in relation to the UN Security Council Resolution #1973 in 2011. Let me explain first (1) the Geneva Convention and then (2) the UN Resolution hereafter.

(1) The first violation of international law concerns the Third Geneva Convention in 1929, which offers rights to prisoners of war (POWs), such that POWs have certain rights to be protected. Russian Foreign Minister Sergei Lavrov rightly said on October 21, 2011 that, "in compliance with international law, the moment that a party to an armed conflict is captured, special procedures should be applied to him or her, including assistance, as well as a ban on killing such a person."

But this right was violated, when Gaddafi was captured alive (as POW) and was then repetitively verbally and physically abused before being shot dead shortly after. As "testified by the grainy mobile phone footage seen by the world of the former leader, bloodied and dazed, being dragged along by NTC fighters" in a gruesome way, "Gaddafi can be heard in one video saying 'God forbids this' several times, as slaps from the crowd [of NTC fighters] rain down on his head," as reported by Rania El Gamal for Reuters on October 23.

Then, he was executed by a young NTC fighter named Sanad al-Sadek al-Ureibi, who claimed that he shot Gaddafi after capture, because he did not want him alive; and other fighters celebrated with him after the summary execution. Worse, his dead body was then publicly displayed in a commercial freezer at a shopping center for more celebration.

This act of Western-backed NTC fighters is not only criminal but also barbaric. The foes of Gaddafi may argue that he deserves this fate, but two wrongs do not make a right (which is a well-known logical fallacy), and the answer to criminality is not more criminality. This blatant violation of the Geneva Convention then led Christof Heyns, the UN Special Rapporteur on extra-judicial executions, to charge on October 21 that "the manner of the deposed Libyan leader's killing could be a war crime," in a report by RT on October 22.

This criminal act by Western-supported NTC fighters is not just restricted to the case of Gaddafi's death but also be extended to the murder of his son (and others in the group). For instance, Gaddafi's son, Mutassim Gaddafi, was captured alive, together with his father, and, in a video released by NTC fighters, he was shown to be "alive in custody, and even casually smoking a cigarette" in a room (surrounded by armed NTC fighters), but in a few moments later, "other images show him dead with gunshot wounds to his neck and abdomen" in the same room, in a report by RT on October 21.

A technical question here is who should be responsible for this criminal act. There are at least five legal possibilities, namely, (a) the individuals who physically abused him and/or pulled the trigger, like Sanad al-Sadek al-Ureibi and others to be identified, (b) the specific unit of NTC fighters which participated in the capture of Gaddafi and his group, (c) the NTC leadership, (d) NATO forces because of their participation (or complicity) in the attack which led to the capture (and the subsequent murder), and (e) certain leaders of Western powers who have given wholehearted support to NTC from the start to encourage the violence against the regime.

It is not surprising that, at the beginning, the NTC tried to cover up the criminal killing by making up fictional stories and blaming others instead. For instance, NTC leader Mahmoud Jibril, first tried to defend NTC by making a dubious public statement to the press that Gaddafi was killed in a crossfire and was shot by one of his own loyalists. But this cover-up was questioned later, even by a senior member of NTC, Waheed Burshan, who said on October 22: "We found that he was alive and then he was dead. And as far as we can tell, there was no fight" (crossfire).

Even "British MP Jeremy Corbyn said that, as Gaddafi was captured alive, he should have been treated as prisoner of war, interrogated and put on trial," but "it looks that there was an element of mob rule in this, and he was indeed killed in the back of the truck," as reported by RT on October 20.

So now, both "the UN Human Rights Office and Amnesty International are calling for an investigation into Gaddafi's death as it raises concerns over what may be the unlawful killing of a prisoner," as reported by RT on October 22. U.N. human rights spokesman Rupert Colville even said on October 20 that he found it very disturbing when "you see someone who has been captured alive and then you see the same person dead....Summary executions are strictly illegal under any circumstances. It's different if someone is killed in combat....But if something else has happened, if someone is captured and then deliberately killed, then that is a very serious matter," as reported by Stephanie Nebehay for Reuters on October 21.

Unfortunately, because of the Western dominance in international legal bodies, any prosecution of war crimes committed by Western forces and their allies is very unlikely, as "Benjamin Barber, an analyst at a US think tank, does not expect anyone will be held accountable for the colonel's death," as reported by RT on October 22.

Now that Gaddafi was dead, the most tragic thing is that this gruesome murder "will cast doubt on the promises by Libya's new rulers to respect human rights and prevent reprisals. It would also embarrass Western governments which gave their wholehearted backing to the NTC," as reported by Rania El Gamal for Reuters on October 23.

Even British MP Jeremy Corbyn soberly warned that "this really does raise some question marks about the command and discipline of the NTC forces and what Libya is going to be like, not just tomorrow, but next month, next year and the next ten years."

Furthermore, according to Shirin Sagedhi, "the gruesome and public killing of Gaddafi was insulting to the people of Libya and the people of the region, as well as the 'idea that democratic forces would brutally kill someone like that,'" in a report by RT on October 22.

(2) And the second violation of international law concerns the UN Security Council Resolution #1973 in 2011, which set up a "no-fly zone" above Libya but did not authorize NATO forces to carry out an attack on any group who were not harming anyone but were fleeing from being attacked instead. Indeed, it was a French jet which "fired on Gaddafi convoy" when it was trying to flee from the ferocious attack by NTC fighers, as confirmed by French defense chief and reported by RT on October 20.

In this specific case, Gaddafi and his few bodyguards were under attack by NTC fighters when they were fleeing Sirte in a convoy, but NATO helped the NTC fighters and carried out an aerial attack (by a French jet) on Gaddafi's convoy (which led to Gaddafi's capture).

But this violates international law, in regard to the UN Security Council Resolution #1973, since, as Russian Foreign Minister Sergei Lavrov on Friday rightly pointed out, "the attack on Gaddafi's convoy was directly at odds with the agreed task of guaranteeing a no-fly zone," because "in this specific case one cannot speak of protecting the lives of civilians, either because the convoy did not attack anyone" and was trying instead to escape from the ferocious attack by NTC fighters, or because there was no civilian around to protect (as an excuse) in the first place.

Russia's NATO envoy, Dmitry Rogozin, therefore accused NATO of being "directly involved in the operation to kill the former Libyan leader," since "apparently there were orders that oriented the military servicemen who are in Libya and that directed them to ensure the physical elimination of Gaddafi," as reported by RT on October 21.

Instead of showing respect towards international law, Western powers reacted joyfully to the killing, as shown by the elation of U.S. Secretary of State Hillary Clinton, who, when "learned about the death of Muammar Gaddafi via an SMS message" in an interview "filmed by CBS NEWS," exclaimed "Wow!" and thus joyfully said, "We came, we saw, he died!," as reported by Pravda on October 21.

And her boss, President Obama, triumphantly announced that, "without putting a single U.S. service member on the ground, we achieved our objectives" of getting rid of Gaddafi and setting up a new regime.

In reaction to this Western joy over the killing, Rogozin thus observed that "the Western elation over the death of former Libyan leader Muammar Gaddafi could have sadistic grounds," as he thus added: "The faces of the leaders of 'world democracies' are so happy, as if they remembered how they hanged stray cats in basements in their childhoods," as reported by RT on October 21.

In this way, Western mainstream media did not waste time to engage in spinning the whole murder into one of bashing Gaddafi and his historical legacy, without telling the rest of the world about the Western complicity in supporting Gaddafi in all these years of dictatorial rule.

For instance, only some years ago, "former British Prime Minister Tony Blair had no qualms doing business with Gaddafi and Italian Prime Minister Silvio Berlusconi got cozy with him at a United Nations Summit in Rome," as reported by RT on October 21.

In the case of the U.S., the thoughtful comment by Matthew Rothschild on October 21 is worth mentioning: "The hypocrisy of the U.S. position could hardly be greater. In 2003, the Bush Administration rehabilitated Qaddafi, who became an ally of the United States in the 'war on terror.' In fact, the CIA used Qaddafi's intelligence service to torture detainees that the U.S. sent over to Libya. The CIA 'rendered' eight or nine detainees to Qaddafi's intelligence service, and sent questions along with for the torturers to ask, according to Human Rights Watch, in an interview with Democracy Now.

The CIA may even have had agents present during some of the questioning. In 2008, Condoleezza Rice visited Qaddafi in Libya. The next year, Obama shook his hand, and John McCain offered him arms. When it was convenient for Washington to support Qaddafi, it did so. When it was convenient to attack him, it did so. But the Obama administration didn't attack Bahrain when it cracked down on people fighting for democracy against that kingdom. No, Washington even let Saudi Arabia, another kingdom, invade Bahrain to help put down the nonviolent uprising."

Many who do not know the history of modern Libya are not aware of the historical contributions of Muammar Gaddafi to his people and the region, even when he has his own failures. Consider, for instance, the following five important contributions by Gaddafi to his country and the region:

(a) He envisioned "the United States of Africa" and thus contributed to the formation of the African Union. In fact, "the African Union is basically the creation of Muammar Gaddafi, who saw it as a vessel for a stronger Africa," as reported by RT on October 20

(b) He succeeded in holding Libya together, which, according to Shirin Sagedhi, was previously fragmented by different "tribes and ethnicities."

(c) He transformed Libya to have "one of the highest GDPs per capita in Africa and...to provide an extensive level of social security, particularly in the fields of housing and education," in a way that many sub-Saharan countries in Africa could only dream of, in the article on Libya by Wikipedia.

(d) He managed to avoid being dominated by the Soviet Union or the U.S. during the Cold War by masterfully playing the Soviet Union against the U.S. without being a puppet of the former. After the collapse of the Soviet Union at the end of the Cold War, he continued to fight against Western domination in the region and thus developed bad blood with Western powers.

(e) He overthrew the Kingdom of Libya in a bloodless military coup against King Idris in 1969 and thus brought Libya into the modern era (from monarchic feudalism).

All these achievements are no small feats for a ruler of a small country with only a few million people and thus have allowed Gaddafi to rule for 42 years.

This does not mean that Gaddafi has no failures. Surely, there are good examples to consider, like his personal vanity, his abuse of power, his ruthlessness, and the like. But who has no failures, for a man with his historical status in the modern era?

But all these achievements are now forgotten, as the West had finished using him, and Western mainstream media is now spinning his historical legacy, in accordance to the dominant rhetoric of Western powers in world media.

Yet, history has its final say: Muammar Gaddafi, in the end, is a historical figure in the modern history of Africa and for that matter, the Middle East, in spite of all his personal faults. And the war crimes by Western powers and their allies help perpetuating the vicious cycle of violence and of suffering in the world.

Fraudulent Defense Contractors Paid $1 Trillion

Bernie Sanders


October 25, 2011

WASHINGTON, Oct. 20 - Hundreds of defense contractors that defrauded the U.S. military received more than $1.1 trillion in Pentagon contracts during the past decade, according to a Department of Defense report prepared for Sen. Bernie Sanders.

Sanders (I-Vt.) called the report "shocking." He said aggressive steps must be taken to ensure taxpayer dollars aren't wasted.


"The ugly truth is that virtually all of the major defense contractors in this country for years have been engaged in systemic fraudulent behavior, while receiving hundreds of billions of dollars of taxpayer money," said Sanders.

"With the country running a nearly $15 trillion national debt, my goal is to provide as much transparency as possible about what is happening with taxpayer money."

The report detailed how the Pentagon paid $573.7 billion during the past 10 years to more than 300 contractors involved in civil fraud cases that resulted in judgments of more than $1 million, $398 billion of which was awarded after settlement or judgment for fraud.  When awards to "parent" companies are counted, the Pentagon paid more than $1.1 trillion during the past 10 years just to the 37 top companies engaged in fraud.

Another $255 million went to 54 contractors convicted of hard-core criminal fraud in the same period. Of that total, $33 million was paid to companies after they were convicted of crimes.
Some of the nation's biggest defense contractors were involved.

For example, Lockheed Martin in 2008 paid $10.5 million to settle charges that it defrauded the government by submitting false invoices on a multi-billion dollar contract connected to the Titan IV space launch vehicle program.  That didn't seem to sour the relationship between Lockheed and the Defense Department, which gave Lockheed $30.2 billion in contracts in fiscal year 2009, more than ever before.

In another case, Northrop Grumman paid $62 million in 2005 to settle charges that it "engaged in a fraud scheme by routinely submitting false contract proposals," and "concealed basic problems in its handling of inventory, scrap and attrition."  Despite the serious charges of pervasive and repeated fraud, Northrop Grumman received $12.9 billion in contracts the next year, 16 percent more than the year before.

A Sanders provision in a defense spending bill required the report and directed the Department of Defense to recommend ways to punish fraudulent contractors. The Pentagon said sanctions already are in place.

"It is not clear, however, that these remedies are sufficient ... to deter and punish fraud when it is detected." That tone was different than what the Pentagon said in a preliminary report last January, which declared that ‘the department believes that existing remedies with respect to contractor wrongdoing are sufficient." 


Said Sanders: "It is clear that DOD's current approach is not working and we need far more vigorous enforcement to protect taxpayers from massive fraud."

Under another Sanders provision in a separate law, a government-wide federal contractor fraud database was opened to the public earlier this year.  Access to the Federal Awardee Performance and Integrity Information System had been limited to federal acquisition officials and certain members of Congress.  The DOD promises to ramp up monitoring of this database to ensure its contractors' fraudulent actions are accurately and fully disclosed.

To read the Pentagon report and the tables, click here and here.

(Bernie Sanders was elected to the U.S. Senate in 2006 after serving 16 years in the House of Representatives. He is the longest serving independent member of Congress in American history.)

Defending Bloated Military Spending

By Ryan Alexander

October 25, 2011

The Association of the United States Army packed hundreds of exhibitors into two halls the size of football fields at its annual convention. Companies from around the world came to the event, recently held at the Washington Convention Center, to sell the Army everything from mammoth tanks to micro-thin wires. Corporations such as Raytheon and KBR erected multi-level installations nearly big enough to generate their own zip code, complete with conference rooms and coffee bars.

Had the political leaders tackling our budget mess visited this spectacle, they would have gotten a good lesson on federal spending. The Pentagon's budget stands the risk of being subjected to a process known as "sequestration," which would impose $600 billion in defense cuts over 10 years if Congress doesn't approve a $1.2-trillion deficit-slashing plan that the panel of lawmakers known as the supercommittee will propose later this year. In his address to the convention, Defense Secretary Leon Panetta called this plan a "doomsday mechanism."

[military-spending-cuts-supercommittee]

Later, Rep. Randy Forbes (R-VA), who represents a district heavy with defense contractors, launched an initiative claiming that sequestration would "cause significant harm to United States interests." He was echoing a report released last month by the Republican staff of the House Armed Services Committee that read like a list of campaign debate talking points. It was light on facts but replete with fear-mongering claims that reductions risked "increasing the threat of nuclear proliferation," as well as our ability to "adequately defend allies."

This all cleverly misses the point. Sequestration was meant to be the scary stick to get Congress to take its deficit-cutting medicine. What big military budget boosters are trying to do with this line of reasoning is to protect Pentagon spending in the supercommittee's deliberations.

It's no surprise that the Pentagon would scramble to protect its flank in these budget-cutting times, but the offensive from Panetta, some members of Congress, and industry titans is brazenly alarmist — and sometimes downright wrong. Panetta told Congress that sequestration would increase the country's unemployment rate by 1 percent, despite the absence of any evidence.

Similarly, GOP presidential candidate Mitt Romney pledged in a speech to "reverse Obama's massive defense cuts." But under President Barack Obama, military spending has actually increased by billions of dollars.

Let's review some more facts. First of all, the $450 billion in Pentagon cuts that the debt ceiling deal enacted would only lower the rate of increase in military spending, a rate that has gone through the roof in the last decade. In other words, it isn't actually a "cut" at all. Even that so-called "doomsday mechanism" would only shrink the Pentagon's budget back down to where it stood in 2007.

Second, with our country facing a $1.3-trillion deficit, everything must be on the table. Consequently, as the consumer of the largest piece of our discretionary budget pie, the Pentagon must be part of the budget-cutting plan. There's certainly plenty of fat to cut. The Defense Department buys more than $1 billion of goods and services every day. It employs some three million people globally, more than the world's largest corporation. Its headquarters, the Pentagon, is the world's largest office building. If that doesn't epitomize Big Government, what does?

Finally, the chances of sequestration coming to pass are slim to none, and Rep. Forbes and his allies know it. The supercommittee will produce a plan and the broader Congress is bound to adopt the recommendations or come up with some of its own.

This full-court press on behalf of Pentagon spending looks like an attempt to dissuade the supercommittee from making any military cuts at all, or to prepare for the battle soon to take place in Congress. Exploiting taxpayers' anxieties about jobs and safety is a cynical way to avoid making tough decisions that will affect our security for decades to come.


(This article was first published at  FPIF.)

Wednesday, October 26, 2011

CIA and JSOC To Continue Iraq Secret Ops For Years To Come - New Obama Foreclosure Plan Helps Banks At Taxpayers' Expense - Lurking European Debt Crisis?


CIA Will Continue To Run Secret Programs with Joint Special Operations Command (JSOC) in Iraq For Years

[This blog is hoping for an angel to descend and help to defray expenses. Calling all angels!]

As the U.S. military departs Iraq, the CIA is looking at how it can absorb and continue secret counterterrorism and intelligence programs run inside that country for years by the Joint Special Operations Command and other military organizations, officials tell The Daily Beast.
The programs involve everything from the deployment of remote sensors that scan the wireless spectrum of terrorist safe havens to stealth U.S.-Iraqi counterterrorism commando teams, and their status is uncertain as a U.S. diplomatic team negotiates with Iraqi leaders, according to officials, who made clear the CIA intends to keep a footprint inside the country even as troops leave by Dec. 31.
“There are of course parts of the counterterrorism mission that the intelligence community, including CIA, will be able to take on from other organizations—and there are parts of that mission that it won’t,” said one U.S. counterterrorism official who requested anonymity because of the sensitivity of secret negotiations with the Iraqis.
But the official added: “This idea that the U.S. military and CIA are somehow interchangeable is misinformed — they work together closely on some counterterrorism issues, but their missions, expertise, and authorities are fundamentally different. When the U.S. military leaves Iraq, some things just won’t happen anymore.”
In the last months of the Bush administration, the United States negotiated a plan to leave Iraq by the end of 2011. While the Pentagon pressed to keep between 5,000 and 15,000 troops in Iraq past that date, U.S.-Iraq negotiations broke down this month when Iraqi leaders refused to grant soldiers and military contractors immunity from Iraqi domestic law.
On Friday, many in the U.S. national-security bureaucracy were shocked when President Obama announced the end of the military mission in Iraq by Jan. 1. U.S. military planners had assumed that some intelligence missions would still be run from U.S. bases in Iraq into 2012. The new White House policy throws that plan into jeopardy.
Nonetheless, National Security Council spokesman Tommy Vietor said Monday that the United States was negotiating over the future elements of the U.S.-Iraqi military relationship. “As we complete the drawdown, we will continue to have discussions with Iraqi leaders about how best to meet their security needs in a manner that meets our mutual interests,” he said. “Possibilities could include training, exchange programs, tactical exercises, and regular coordination. But they will not include U.S. forces being permanently based in Iraq.”
Other U.S. officials say the CIA is examining how it can continue many of these secret programs once the U.S. military leaves. Many of these programs were developed in 2007 and 2008, when CIA Director David Petraeus, then a four-star Army general, assumed command of the multinational forces in Iraq.
The CIA, with its drones and paramilitary forces, has a far smaller, more stealth footprint than brigades of soldiers, meaning most Americans won’t see much of its continuing activity.
“My sense is that there will be some discussions about what can be given the CIA and whether some of the counterterrorism arrangements that exist today can be negotiated through a separate and secret channel,” said Marisa Cochrane Sullivan, managing director of the Institute for the Study of War, a think tank with close ties to Petraeus and the military’s new generation of counterinsurgency specialists.
While the CIA can pick up some of the slack for the departing military, another possibility is U.S. allies in the region. The United States is in talks with Kuwait about moving some equipment and troops there, said U.S. diplomats who spoke on the condition of anonymity.
Jasem al-Budaiwi, the deputy chief of mission for Kuwait’s embassy in Washington, declined to comment directly on the substance of the negotiations. “There is always continuous cooperation from both the Kuwaiti and U.S. side on military, political, and economic issues,” he said. “We have a great bilateral relationship. All issues are always discussed through many channels.”
The United States is also in discussions with Turkey about pre-positioning sensitive sensors, drones, and other equipment used in Iraq at the Incirlik airbase, which hosted a U.S. Air Force mission in the 1990s to monitor northern Iraq.
A Turkish Embassy spokesman in Washington said the United States would continue to assist Turkey in targeting Kurdish radical separatists, known as the PKK. “Moreover, the intelligence support provided by the United States will be continued on a bilateral basis,” he added. “We attach importance to this support. That said, we are not able to provide details on the content, equipment, or the methods of the cooperation between the two sides in this area.”
For now, a major issue for the military and U.S. intelligence community is retaining some of the capabilities of the Intelligence, Surveillance, and Reconnaissance (ISR) programs run out of Iraq when these cannot be launched from bases inside the country. These programs, in combination with a population-centric counterinsurgency strategy, are widely credited within the military with stopping al Qaeda’s efforts to turn Iraq into a Sunni Islamic republic. The programs included detailed full-motion video monitoring of known terrorist enclaves as well as the lightning-quick interception of temporary cellphone calls and text messages from suspected terrorists.
“We could run ISR collection activities out of Turkey and Kuwait, but the real problem is we have a lot of collection targets in Iraq,” said a senior U.S. intelligence official familiar with the details of negotiations over the programs. “We need to know what is going on all over Iraq, or at least in critical nodes.”
. . .The United States will need to find a way to remain in Iraq in 2012 just to keep the Iraqi military functional, said Cochrane Sullivan. “Right now we still provide important capabilities — for example, medical evacuation; we provide intelligence; we provide logistical support,” she said. “The Iraqis have some helicopters, but they are still reliant on the United States there as well.” 
One possibility would be to “rotate forces in and out of Iraq for a set of exercises,” she said. “You bring them in to do an exercise or a training course, and then you pull them out. That’s the not the same as stationing troops in Iraq past 2011.”
 Did you hear about Obama's Executive Order that would "help" the poor, sad (and badly underserved) victims of foreclosure? It's not exactly what it's sold as, and it seems that nothing can actually be done by Washington that does not make the lower- and middle-classes absorb more of the banksters' proper losses. It's a rule.

New Obama Foreclosure Plan Helps Banks At Taxpayers' Expense

WASHINGTON -- The Obama administration is introducing a new program on Monday designed to lower monthly mortgage payments for more troubled homeowners.
But a key new condition in the plan would shift the financial liability for refinanced loans from Wall Street banks to the American taxpayer. And by focusing on lower payments, the program does not confront what housing experts view as the core problem in the foreclosure crisis -- borrower debt that exceeds the value of one's home.
Faced with the weak response to the Home Affordable Refinance Program, the Obama administration is planning to open up the program to all borrowers who owe more on their mortgage than their homes' worth, commonly dubbed being underwater, and have not missed a mortgage payment. HARP had been limited to borrowers who owed up to 25 percent more than their home is worth.
More than 22 percent of all home mortgages -- or 10.9 million homes -- are currently underwater, according to CoreLogic data. Fewer than 900,000 borrowers have elected to go through HARP to date.
The revised program also eliminates several fees associated with refinancing that can make the decision to refinance uneconomical for borrowers. But the potential benefit of the eliminated fees could be relatively small: If a few thousand dollars worth of fees made refinancing a bad deal for underwater borrowers, the ultimate benefits that refinancing can pose would remain limited.
On a conference call with reporters, White House National Economic Council Director Gene Sperling referred to the HARP expansion as "a win-win policy" that will result in "less defaults" and "fewer foreclosures." But one of the program's new terms will benefit private-sector Wall Street banks, potentially at the expense of taxpayers.
The newly expanded program would expunge legal liabilities associated with mortgages refinanced through the program for the original lenders of the mortgages. Each time a bank sent a loan to Fannie and Freddie, it certified that the loan met Fannie and Freddie's safe lending criteria. But many loans sent to the mortgage giants did not, in fact, meet those criteria.
Currently, when borrowers default on those ineligible loans, the mortgage giants can "put back" the resulting losses onto the banks that pushed the loans.
Under the modified plan, "put back" liability at banks will be erased for any underwater mortgage that is refinanced through HARP, eliminating Fannie and Freddie's ability to sack lenders with losses in the event that the mortgage does not pan out.

If borrowers go through HARP, but decide after several months that the modest monthly savings do not outweigh owing tens of thousands of dollars more than their home is worth, taxpayer-owned Fannie and Freddie will have to take the full loss.
Even if the original loan was sent to Fannie and Freddie with false or fraudulent guarantees from the bank - promises that may directly be tied to the borrower's current financial problems - banks will be immune from liability. Fannie and Freddie plan to charge banks "a modest fee" to extinguish this liability, but the administration has yet to determine what that fee will be.
While the revised program seeks to lower mortgage payments for underwater homeowners, the program does nothing to address the core problem -- owing more than the home is worth. Though borrowers may save hundreds of dollars a month in lower payments by refinancing, they routinely owe tens of thousands of dollars more than their homes are worth, even after receiving aid.
"In most cases people would probably be better off walking," said economist Dean Baker, co-director of the Center for Economic Policy and Research.
During a conference call with reporters, Department of Housing and Urban Development Secretary Shaun Donovan acknowledged that negative equity is a problem, and said the administration hopes to address the issue on other fronts. Donovan cited settlement negotiations with big banks over widespread allegations of foreclosure fraud and initiatives under the Home Affordable Modification Program, a separate Obama foreclosure-relief plan administered by banks, as key initiatives.
New York Attorney General Eric Schneiderman and Delaware Attorney General Beau Biden have both objected to the foreclosure fraud settlement talks on the grounds that they give away too much to banks without investigating the scope of fraud problems in the system. The Home Affordable Modification Program has been a hotbed for the kind of borrower abuses that the administration is pressuring lenders to settle over.

And how about that lurking European Debt problem? The news is not good, and Simon Johnson (one of my favorite economists) has some uncomfortable questions for our "leaders."


Simon Johnson
For everyone struggling to get their arms around the debt crisis in Europe, Bill Marsh in last Sunday’s New York Times offers literally a compelling picture, with graphic illustration for the key issues.
The picture is big, 18×21 inches. Either you need a very large computer screen or a hard copy of the paper (pp. 6-7 in the SundayReview section, It’s All Connected: A Spectator’s Guide to the Euro Crisis).
The main debt linkages across borders for which we have data are all here – and the graphic pulls your eye appropriately to the centrality of Italy in whatever happens next.  (On why eurozone policy towards Italy now matters so much – and what are the options – see my recent paper with Peter Boone, “Europe on the Brink”.)
But you might think also about what is not in the NYT graphic because we lack reliable information.  For example, what is the exposure of US financial institutions to European debt, directly or indirectly, through derivatives transactions of any kind?
The opaqueness of derivative markets means that most investors can only guess at what could happen.  Most of the relevant regulators and supervisors with whom I have talked seem also to be largely in the dark – remember the experience of AIG in 2008.
Cross-border bank exposures through loans and other holdings are publicly disclosed – data from the Bank for International Settlements are represented by the arrows in the NYT graphic.  These data are surely not perfect, but they do convey the main points and they tell you where to focus attention.
Why do we not require publication of similar data, preferably by financial institution, for all derivative transactions – including both gross and supposedly net exposures across borders?







Tuesday, October 25, 2011

How Many Will Echo the Sentiment "Totally Corrupt America?" (They've ALL GOT TO GO!)


If you haven't read the following essay by Paul Craig Roberts yet, please do, and then go stand with the OccupyEveryStreet group nearest you. They need our support as the police move in to sweep them out like trash in the way of the grifting owners.

And, please, don't think that Prof. Roberts is merely echoing my thoughts, which I've been writing about since before the September 2008 Lie Fest, occurring for your incredulous pleasure primetime on national TV from Pres. Not-So-Dumbya and Treas. Sec. Paulson* (formerly Goldman Sachs CEO) in DC.  Roberts has been a pretty tough spokesman against these criminals since Bush and Cheney stole the 2000 election. (P.S. Don't forget that Paulson learned many of his business and personal skills when he was assistant to Ehrlichman during the Nixon years, and that he visited China more than 70 times as the China Sale of the US was implemented).

I think this essay is particularly enlightening as it pulls together most of the written documentation on the crimes, and names names. And once you understand thoroughly what these guys (and a few gun molls) did to the country, you might agree with me that they weren't even that smart - just clever and venal without bounds.

And THEY'VE ALL GOT TO GO!


Totally Corrupt America

Paul Craig Roberts

October 24, 2011
Last March I reviewed Matt Taibbi’s important book Griftopia, an entertaining account of the through-going financial fraud that gave us the financial crisis.  Taibbi shows that the US “superpower” can match any third world backwater in the magnitude of greed and fraud that is endemic in business and government. Taibbi’s Griftopia was published last year. This year Henry Holt publishers have provided us with Gretchen Morgenson and Joshua Rosner’s Reckless Endangerment.
Morgenson and Rosner tell the story again, but with less drama and provocation. Possibly, it might be more acceptable to those gullible Americans who wrap themselves in the flag and refuse to believe that their country could ever knowingly do anything that is wrong.
I am not suggesting that Morgenson and Rosner pull their punches.  To the contrary, the authors deliver enough knockouts to be contenders with Taibbi as world champions in exposing the reckless  fraud that the US financial sector and its regulators now epitomize.
The financial crisis, which is very much still with us, did not result from accident or miscalculation; neither did it result because of a flaw in Alan Greenspan’s theory, as he told Congress when a feeble effort was made to hold him accountable.   It was the intentional result of people motivated by short-term profits who wanted to get theirs and get out.
As Reckless Endangerment shows, fraud characterized every stage of the process from the fraudulent borrower incomes and credit scores that mortgage issuers gave to unqualified buyers, through the securitization of the mortgages and their triple-A investment grade ratings by the rating agencies (Standard & Poor’s especially, but also Moody’s and Fitch) to the investment banks that sold what the banks knew was junk to investors around the world as investment grade securities.
Indeed, Goldman Sachs was simultaneously betting against the mortgage derivatives that it was selling to clients.
Investment banks, such as Goldman Sachs, which once considered it a matter of honor to represent the interests of customers, took advantage of the trust that had been built up in the past to commit fraud against customers in order to advance the banks’ short-term profits and the out-sized multi-million dollar managerial bonuses that these fraudulent profits produced.
Morgenson and Rosner provide a number of unique accounts of how those benefitting from fraud were able to defeat laws that were passed that would have held them to account. For example, the state of Georgia passed perfect legislation that held predatory lending to account. William J. Brennan Jr. and Georgia Governor Roy E. Barnes got the Georgia Fair Lending Act through the state legislature. It was a model for other states.  As the federal regulators had thrown in the towel, the state laws would have prevent(ed) the worst part of the financial crisis, i(f) not prevented the crisis altogether.
The Georgia law only lasted a few months, because the rating agencies saw that their enormous profits from issuing fraudulent investment grade ratings were threatened by the law. The corrupt rating agencies mischaracterized the consumer protection act as a jihad by regulators. Standard & Poor’s declared that it would no longer allow Georgia mortgages to be placed in mortgage securities that it rated.
In other words, Georgia mortgages could no longer be securitizedThis announcement banned Georgia  mortgage lenders from securitization. Thus, the law was overturned, and fraud ran wild.
These kind of mafia strong-armed tactics in order to protect at all costs the short-term mega-bonuses that drove the totally fraudulent system have never been held accountable or punished.
Totally innocent people are held indefinitely and tortured by the US government for no other reason than to convince the gullible public that they are endangered by terrorists, but those who wiped out the home ownership and retirement pensions of millions of Americans now hold high and honorable positions on corporate boards and US regulatory agencies.
Federal regulatory agencies totally failed. Brooksley Born tried to use her statutory authority to regulate over-the-counter derivatives, but she was blocked by the Federal Reserve chairman, the US Treasure secretary, and the SEC chairman and forced to resign.
As University of Chicago Nobel economist George Stigler predicted, regulatory agencies are captured by those who are intended to be regulated.  This was the case.
Regulators turned a blind eye to obvious criminal fraud, and were rewarded with lucrative positions in the financial community. The same for the US senators and representatives who repealed Glass-Steagal and other financial regulations.
For example, former US senator Phil Gramm who spearheaded the repeal of the Glass-Steagall Act, which separated commercial from investment banking, the repeal of which set up the financial crisis, was rewarded by being made vice chairman of the mega-bank UBS, a Swiss global financial services company.
What Taibbi, Morgenson and Rosner make clear is that while monster criminals continue to collect their multi-million dollar annual incomes, depressed single mothers, deserted by the men who fathered their child, are sent to prison for having small quantities of illegal drugs to boost their depressed spirits, and their children are put out to adoption.
This is “justice” in America where there is “freedom and democracy.”

Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury. He can be reached at: PaulCraigRoberts@yahoo.com

* Paulson's bio



Monday, October 24, 2011

Remember the Good Ole Days of Raygun & His Trusty Team? NOW We Live Under the Capitalist Network That Runs the World: Murdoch Pays Off - David Ickes - Agenda of OWS (Bayer Bared!)


Is any of this history starting to make sense yet?





[This blog is hoping for an angel to descend and help to defray expenses. Calling all angels!]

 Sure. We're outta there.

Not. (Lifted gently with great admiration from the dynamic Wonkette.)

From Spencer Ackerman’s excellent report at the Danger Room:

But the fact is America’s military efforts in Iraq aren’t coming to an end. They are instead entering a new phase. On January 1, 2012, the State Department will command a hired army of about 5,500 security contractors, all to protect the largest U.S. diplomatic presence anywhere overseas.

The State Department’s Bureau of Diplomatic Security does not have a promising record when it comes to managing its mercenaries. The 2007 Nisour Square shootings by State’s security contractors, in which 17 Iraqi civilians were killed, marked one of the low points of the war. Now, State will be commanding a much larger security presence, the equivalent of a heavy combat brigade. In July, Danger Room exclusively reported that the Department blocked the Congressionally-appointed watchdog for Iraq from acquiring basic information about contractor security operations, such as the contractors’ rules of engagement.

That means no one outside the State Department knows how its contractors will behave as they ferry over 10,000 U.S. State Department employees throughout Iraq — which, in case anyone has forgotten, is still a war zone. Since Iraq wouldn’t grant legal immunity to U.S. troops, it is unlikely to grant it to U.S. contractors, particularly in the heat and anger of an accident resulting in the loss of Iraqi life.

It’s a situation with the potential for diplomatic disaster. And it’s being managed by an organization with no experience running the tight command structure that makes armies cohesive and effective.


(Did I mention I'm crazy about Simon Johnson?)

Revealed – The Capitalist Network that Runs the World



The 1318 transnational corporations that form the core of the economy. Superconnected companies are red, very connected companies are yellow. The size of the dot represents revenue <i>(Image: </i>PLoS One<i>)</i>

The 1318 transnational corporations that form the core of the economy. Superconnected companies are red, very connected companies are yellow. The size of the dot represents revenue (Image: PLoS One) 1 more image

AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters' worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.
The study's assumptions have attracted some criticism, but complex systems analysts contacted by  New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.

The idea that a few bankers control a large chunk of the global economy might not seem like news to New York's Occupy Wall Street movement and protesters elsewhere (see photo).

But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world's transnational corporations (TNCs).

"Reality is so complex, we must move away from dogma, whether it's conspiracy theories or free-market," says James Glattfelder. "Our analysis is reality-based."

Previous studies have found that a few TNCs own large chunks of the world's economy, but they included only a limited number of companies and omitted indirect ownerships, so could not say how this affected the global economy - whether it made it more or less stable, for instance.

The Zurich team can. From Orbis 2007, a database listing 37 million companies and investors worldwide, they pulled out all 43,060 TNCs and the share ownerships linking them. Then they constructed a model of which companies controlled others through shareholding networks, coupled with each company's operating revenues, to map the structure of economic power.

The work, to be published in PloS One, revealed a core of 1318 companies with interlocking ownerships (see image).

Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What's more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world's large blue chip and manufacturing firms - the "real" economy - representing a further 60 per cent of global revenues.

When the team further untangled the web of ownership, it found much of it tracked back to a "super-entity" of 147 even more tightly knit companies - all of their ownership was held by other members of the super-entity - that controlled 40 per cent of the total wealth in the network.

"In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network," says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

John Driffill of the University of London, a macroeconomics expert, says the value of the analysis is not just to see if a small number of people controls the global economy, but rather its insights into economic stability.

Concentration of power is not good or bad in itself, says the Zurich team, but the core's tight interconnections could be. As the world learned in 2008, such networks are unstable. "If one [company] suffers distress," says Glattfelder, "this propagates."

"It's disconcerting to see how connected things really are," agrees George Sugihara of the Scripps Institution of Oceanography in La Jolla, California, a complex systems expert who has advised Deutsche Bank.

Yaneer Bar-Yam, head of the New England Complex Systems Institute (NECSI), warns that the analysis assumes ownership equates to control, which is not always true. Most company shares are held by fund managers who may or may not control what the companies they part-own actually do. The impact of this on the system's behaviour, he says, requires more analysis.

Crucially, by identifying the architecture of global economic power, the analysis could help make it more stable. By finding the vulnerable aspects of the system, economists can suggest measures to prevent future collapses spreading through the entire economy. Glattfelder says we may need global anti-trust rules, which now exist only at national level, to limit over-connection among TNCs. Bar-Yam says the analysis suggests one possible solution: firms should be taxed for excess interconnectivity to discourage this risk.

One thing won't chime with some of the protesters' claims: the super-entity is unlikely to be the intentional result of a conspiracy to rule the world. "Such structures are common in nature," says Sugihara.

Newcomers to any network connect preferentially to highly connected members. TNCs buy shares in each other for business reasons, not for world domination. If connectedness clusters, so does wealth, says Dan Braha of NECSI: in similar models, money flows towards the most highly connected members. The Zurich study, says Sugihara, "is strong evidence that simple rules governing TNCs give rise spontaneously to highly connected groups". Or as Braha puts it: "The Occupy Wall Street claim that 1 per cent of people have most of the wealth reflects a logical phase of the self-organising economy."

So, the super-entity may not result from conspiracy. The real question, says the Zurich team, is whether it can exert concerted political power. Driffill feels 147 is too many to sustain collusion. Braha suspects they will compete in the market but act together on common interests. Resisting changes to the network structure may be one such common interest.


The Top 50 of the 147 Superconnected Companies:


1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
4. AXA
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
26. Lloyds TSB Group plc
27. Invesco plc
28. Allianz SE 29. TIAA
30. Old Mutual Public Limited Company
31. Aviva plc
32. Schroders plc
33. Dodge & Cox
34. Lehman Brothers Holdings Inc*
35. Sun Life Financial Inc
36. Standard Life plc
37. CNCE
38. Nomura Holdings Inc
39. The Depository Trust Company
40. Massachusetts Mutual Life Insurance
41. ING Groep NV
42. Brandes Investment Partners LP
43. Unicredito Italiano SPA
44. Deposit Insurance Corporation of Japan
45. Vereniging Aegon
46. BNP Paribas
47. Affiliated Managers Group Inc
48. Resona Holdings Inc
49. Capital Group International Inc
50. China Petrochemical Group Company


* Lehman still existed in the 2007 dataset used.

Graphic: The 1318 transnational corporations that form the core of the economy
(Data:
PLoS One)

The Kids Camping on Wall Street Are The Capitalists, Not the People in the Buildings

Friday, 10/21/2011
Bruce Judson | 4 Comments

occupy-journal

Which group is still abiding by the important capitalist principles of accountability, competitiveness, and equal justice?

Today, some of the leading capitalists in the nation are located on Wall Street. Sadly, it is the protesters outside who are literally on the street who embody the ideal rewards and responsibilities of capitalism, not the financiers who occupy the buildings.
This is the first in a short series of articles that explores the nature of a well-functioning capitalist system and how this system is now applied to the occupants of the buildings on Wall Street and those who are, quite literally, on The Street.
Capitalism is not an abstract ideal. It is as real as any market or currency. And it is the organizing principle that has, for over two centuries, powered the strength and resilience of America.
As we think about capitalism, it’s also useful to make an important distinction: It’s not what you say, it’s what you do. You may espouse capitalist ideals, but if you oppose responsibility, dishonor contracts, oppose competition, and embrace government subsidies, you are not a practicing capitalist.
For capitalism to work, there are several fundamental requirements: accountability, equal justice under the law, a clearly articulated purpose (and accompanying cost) for government subsidies of a specialized class of citizens, competition, and a relationship between the creation of profits and the creation of real wealth for the larger society.
Many of the protestors in New York City and around the country are jobless college graduates. The majority in all likelihood financed their education through federally subsidized student loans. A central characteristic of today’s generation of student loans is that, unlike most debts, they cannot automatically be discharged in bankruptcy. As a consequence, they are one of the few expenses in our society for which an individual is likely to be accountable throughout his life.
As a nation, we teach our most promising youth, from the age of 18 on, the importance of accountability. We use the federal government to subsidize an investment in human capital. In return, the beneficiaries enter into a lifetime of responsibility and accountability. It is a sacred contract. It is arguably one of the best, and potentially harshest, lessons of accountability associated with capitalism in our society today.
Now, let’s contrast this high accountability with the behavior that occurred in our financial sector. When our largest financial firms created havoc in the U.S. economy through undisputed greed, mismanagement, and extreme risk, some important things happened.

First, the government bailed the companies out without demanding any substantial change in behavior, and then the individuals responsible were not held accountable through civil or criminal law. As a result, the people who brought the nation close to the brink of economic collapse and caused untold pain and suffering — which continues to this day — returned after a brief hiatus to record levels of compensation.
Individuals who earned tens of millions of dollars continue to earn these extraordinary sums. They have never been called to account for their deeds.

Can this be right? What about the many civil settlements negotiated by the federal government and the SEC? I would argue that, in light of the extraordinary profits these firms and individuals generate, such settlements are now viewed as a “cost of doing business.” They appear to have almost no impact on the behavior or attitude of the nation’s financiers.
Now let’s contrast the kids on the street with the employees of The Street. The kids are accountable for their debts. They know it, and they simply want jobs so they can fulfill their civic responsibilities. In contrast, the occupants of the building on Wall Street act as if the rules of accountability — which are central to a viable system of capitalism — apply to everyone except them. Instead, many of the Wall Street elite have developed a dangerous sense of entitlement.
I would argue that in a true, competitive capitalist society, the idea of entitlement is anathema to all participants. It suggests that rewards are disbursed because of who people are, as opposed to the tangible wealth they create for the nation.
It’s worth noting that old timers on Wall Street may still remember that until 1970 the New York Stock exchange mandated that investment banks be organized as some of the most accountable businesses in existence. Prior to going public, in the late 20th century Wall Street firms were organized as old-fashioned partnerships.
The central idea of these partnerships was that every partner was fully liable for all of the debts incurred by the firm. If the partnership could not meet its obligations, the partners were required to meet these obligations with their own funds until they were personally bankrupt as well.
It was a self-policing system that provided high incentives for investment banks to manage the risks they undertook. When every partner is liable, each has the highest possible incentive to ensure that the firm is not exposed to potential default. If they fail in this responsibility, both the firm and the individual partners can be wiped out. This rule was meant to avoid precisely what happened in the financial crisis.
Now these same publicly held financial institutions have been bailed out by the government and the high-paid executives are apparently immune — both with respect to their pay, their sources of employment, and their personal funds — from any day of reckoning.
The philosopher John Rawls is widely recognized for his theories of justice. In one exercise, his “veil of ignorance,” he suggests that if you are faced with a decision you should pretend you don’t know what kind of participant in the process you will be, so that “everyone is impartially situated as equals.” Since you are blind to your own interests, you are likely to develop the fairest answer. (I have found this to be the perfect exercise for sharing desserts. I cut the cake and then let each individual choose a piece. Since I don’t know what piece I will end up with, my cutting is far more likely to divide the pieces equally.)
Now let’s apply a variant of Rawls’s ideas to the situation on Wall Street today. You are a visitor from a foreign country or an alien world with no knowledge of Wall Street or capitalism. Then the principles of capitalism are explained to you and you are asked to identify the capitalists in this confrontation: the people in the buildings or the people congregating on the street. Which would you choose?

(Bruce Judson is Entrepreneur-in-Residence at the Yale Entrepreneurial Institute and a former Senior Faculty Fellow at the Yale School of Management.)

It's hard to believe that a person as deeply corrupt and exposed as Murdoch (heck, all of them) is still in business isn't it? Shame isn't exactly a business virtue these days.

Movement Spins Off OccupyMARINES and OccupyPolice 

Goldman Sachs Withdraws from Sponsoring
Credit Union Honoring Occupy Wall St.
  

Mitch McConnell: Police, Firefighter Layoffs Not My Problem
 The part I always looked forward to in any drama about economic transgressions was when the innocent character (child or just naive adult) would ask, "Why won't the wealthy help us? They have so much already." Just hearing the next lines was always worth the price of the ticket.

Rupert Delivers the Profits, Analysts Dodge the Hard Issues

Stephen Mayne

When Rupert and James Murdoch walked in to face more than two hours of questions from a group of British politicians last month, it turned into an unprecedented grilling which unearthed significant information and context on the News of the World phone hacking scandal. The whole exercise demonstrated the benefit of unscripted, open-ended, independent public questioning of powerful figures. It was a fine example of democracy in action.
The same can't be said for this morning's conference call with analysts and journalists to discuss the better-than-expected $US2.74 billion net profit which News Corp revealed for the 2010-11 financial year.
The financial analysts are a supine bunch. They trade on their access to management and an ability to crunch the numbers, advising clients whether to buy or sell News Corp. Governance, accountability and transparency doesn't easily translate into numbers on a spreadsheet.
News Corp promotes the names and telephone numbers of 28 analysts which follow the company on its website.
I emailed them all yesterday with a list of suggested questions and arguments, but none of them managed to rise to the challenge of raising any challenging issues during 31 minutes of questioning this morning. Have a listen to how their 12 questions unfolded.
Maybe this is because most analysts are employed by global investment banks such as Deutsche Bank, Credit Suisse and Goldman Sachs, which have collectively pocketed hundreds of millions of dollars of fees from News Corp over the years. The conflicts of interest are many and varied, which explains why it is a rare analyst who asks Rupert Murdoch a pointed question on a conference call.
The journalists on the quarterly News Corp conference calls are normally treated as second-class citizens, given a brief window to ask questions once the analysts are done.
Representatives from Reuters, the Financial Times, the Hollywood Reporter and National Public Radio quickly cut to the chase this morning on the myriad of legal and governance issues besetting the company.
Unsurprisingly, the call was shut down after six questions from six journalists over six minutes as the 80-year-old News Corp founder struggled to answer questions about whether he still wanted James Murdoch to succeed him, how US regulatory probes were going and whether he would refresh the board with new independent directors.
While the Murdoch management team clearly had a strategy to allow chief operating officer Chase Carey do much of the talking on the business, it was striking that Rupert Murdoch was doing all the talking on behalf of the directors that are supposed to represent non-Murdoch shareholders.
It was Rupert who declared during his three-minute opening address that the board supports him remaining as the world's longest-serving CEO of a public company and Rupert who declared that Chase Carey supports James Murdoch staying in his current role.
Despite meeting over two days this week in Los Angeles this week, no independent director fronted today's call to give a board perspective on behalf of the 87 per cent of News Corp which is owned by non-Murdoch investors.
Melbourne-based Sir Rod Eddington, who is supposed to be the lead independent director and chairman of the board audit and risk committee, hasn't said boo publicly since the hacking scandal exploded on July 4.
When challenged about the board not being independent, Rupert cut one journalist off to declare that lawyer and Georgetown University professor Viet Dinh is completely independent.

The conference call was then shut down before the obvious follow up question: "how can Viet Dinh be the independent chair of the governance committee when he is godfather to one of Lachlan Murdoch's sons?"
As for the profit numbers, this is how the various News Corp divisions performed in 2011-12:

  • Global cable TV: profit up from $US2.27 billion to $US2.76 billion with Fox News a key driver
  • 20th Century Fox film division: profit down from $US1.35 billion to $US927 million as Avatar earnings run down
  • Newspapers, magazines, books and inserts: profit up from $US467 million to $US864 million but numbers distorted by one-offs and projected future earnings under pressure
  • Free-to-air US television: profit up from $US230 million to $681 million on strong ratings and healthy advertising growth
  • BSkyB: 39 per cent profit share dipped from $US537 million to $US498 million
  • Sky Italia: profit steady at $US232 million
  • Other: losses blew out from $US575 million to $614 million largely thanks to Myspace loss of $US230 million but this has now been sold for $US35 million
The market seemed impressed with the overall message from News Corp, especially the emphasis on moving aggressively to implement a $US5 billion share buyback over the next 12 months.
When trading opened in Australia, News Corp shares gained up to 2 per cent in a falling market.
However, Rupert was very reluctant to give ground on any key issues, besides once again apologising for the "appalling" News of the World scandal and promising to do whatever it takes to clean up the mess and ensure it never happens again.
Excluding News of the World, he declared "everything else is fine" in the troubled publishing operations, although there were promises to cut costs and he said the headcount in the Australian division had already been significantly reduced in all divisions.
Whilst The Wall Street Journal was the only US paper to increase advertising revenue in 2010-11, the real encouragement for investors came from the booming global cable television business, led by Fox News.
You know a company is really making money when it pays a lot of tax, and News Corp's tax charge soared from $US679 million to a record $US1.03 billion in 2010-11.
Investors were also heartened that profits are forecast to rise by more than 12 per cent this year, although there was no detail provided on the one-off costs from the News of the World closure. The foregone profits and associated litigation will ultimately end up costing shareholders hundreds of millions of dollars, especially if it is never considered viable to launch a Sunday Sun to replace the highly profitable News of the World.
As for any future attempt to revisit the aborted BSkyB takeover, the message today was to forget about it, hence the strong support to spend the cash designated for this move on a $US5 billion share buyback.
With the final conference call of the year now concluded, Rupert Murdoch won't have to front up publicly again until the October annual meeting in New York.
. . . Rupert groups every resolution into one limited debate.
Things will certainly be different this year when the 13 non-Murdoch directors on the News Corp board will all be up for re-election. After arguably the biggest governance scandal ever to hit a listed multi-national company, expect substantial protest votes from investors and some very sharp questioning.

(Stephen Mayne is a former News Ltd journalist and a director of the Australian Shareholders' Association who will be travelling to New York for the News Corp AGM in October. Follow him on Twitter @maynereport.)

And on nowhere near a lighter note, we learn (or relearn) the history of Bayer. (You'll need an aspirin after this, at least.)




Right Wing Paradise - A World With No Regulations... Take Yaz And Bayer 


Saturday, Oct. 22

Would Bayer put your life at risk? Well... that depends on how much profit they could make. The company was founded in Germany in 1863 and later became a key component of IG Farben, the biggest of the Nazi conglomerates that bankrolled Hitler, made mega profits off slave labor in concentration camps and manufactured all the chemicals needed to exterminate the Jews and anyone else the Nazis decided were untermeschen.

Bayer also invented heroin. Bayer, like all the big pharmaceutical companies calculates the value of new drugs by including the inevitable wrongful death suits and fines, fines that more often than not result in their having hidden evidence from the FDA in the process of getting approval.


Bayer spends immense amounts of money on legalistic bribes - overwhelmingly to Republicans (80%) and some conservative Democrats willing to vote against consumer interests with the Republicans. In he 2010 cycle Bayer spent $334,018 to help the Republicans take control of Congress, understanding full well the GOP attitude towards regulations that protect the public from predatory drug companies like itself.

Big Pharma has spent $121,637,009 on direct "contributions" to federal candidates, again, most of it to Republicans and most of the rest to corrupt conservative Democrats. Big Pharma's biggest friend in the House are all well-known for protecting drug manufacturers interests over the interests of the public, particularly 5 of Congress' sleaziest and most corrupt Members:

Joe Barton (R-TX)- $849,738
Fred Upton (R-MI)- $631,241
Dave Camp (R-MI)- $586,897
John Boehner (R-OH)- $582,280
Charlie Rangel (D-NY)- $570,402
I heard Mike Papantonio discussing the Yaz case with Sam Seder on the radio this evening. That's how I came to find the video above.

Lawsuits have been filed against Bayer HealthCare Pharmaceutical for the birth control drug Yaz, Yasmin and Ocella. Yaz, Yasmin and Ocella birth control pills all contain drospirenone, a synthetic form of progestin which works in combination with ethinyl estradiol (estrogen) to prevent pregnancy. Drospirenone is not contained in other forms of birth control and is believed to be the major cause of side effects from Ocella, Yasmin and Yaz. Two recent case-control studies published in the British Medical Journal show that patients on the birth control pills containing drospirenone have a 200% higher risk of serious injury than those patients using first or second generation oral contraception.

The New York Times major news story recently published a on the growing safety concerns with Yaz. Bayer manufactures and markets Yaz and Yasmin. Ocella, meanwhile, is a generic form of Yasmin. Bayer manufactures Ocella which is then packaged and sold by Barr Laboratories, which has recently been acquired by Teva Pharmaceuticals.

Side effects of Yaz, Yasmin and Ocella may include:
• heart attacks
• strokes
• deep vein thrombosis
• pulmonary embolism
• blood clots in the legs and lungs
• cardiac arrhythmia
• gallbladder disease
• kidney failure
• sudden death

From the 2009 NY Times story by Natasha Singer:

The oral contraceptives Yaz and Yasmin are the top-selling pharmaceutical line for Bayer HealthCare, largely as a result of marketing that presents them as much more than mere pregnancy prevention.

Yaz, in particular, the top-selling birth control pill in the United States, owes much of its popularity to multimillion-dollar ad campaigns that have promoted the drug as a quality-of-life treatment to combat acne and severe premenstrual depression.

Yaz, a newer sister drug to Yasmin, contains less estrogen. The franchise had worldwide sales of about $1.8 billion last year, based on Bayer’s successful positioning of Yasmin and Yaz as the go-to drug brands for women under 35.

But recently, the Yaz line’s image has been clouded by concerns from some researchers, health advocates and plaintiffs’ lawyers. They say that the drugs put women at higher risk for blood clots, strokes and other health problems than some other birth control pills do.

Those critics, though, are up against a large European health study, sponsored by Bayer, the German pharmaceutical giant, that reported the opposite conclusion. The Bayer-financed study said that cardiovascular risks in women taking Bayer products were comparable to those taking an older formula of birth control pills.

But regulators are finding other faults with the Yaz franchise. The Food and Drug Administration early this year asked Bayer to correct misleading television commercials. Last month, the agency cited the company for not following proper quality control procedures at a plant that makes hormone ingredients.

In e-mail responses to a reporter’s queries, the American unit of the company said that its birth-control drugs had been and continued to be extensively studied and that the company stood behind their safety. The company also said it had responded to the F.D.A.’s questions about manufacturing practices, which it said it took very seriously.

But even if Bayer can adequately respond to the safety and other concerns, some industry analysts say that the avalanche of criticism could tarnish the Yaz line’s image. Other products by Bayer, like the erectile dysfunction drug Levitra and the intrauterine birth-control system Mirena, generate far less income than the Yaz product family.

“For Bayer, it is by far the highest margin and the fastest-growing brand,” Martin Brunninger, an analyst with the European investment bank Bryan, Garnier & Company, said in a phone interview from London on Wednesday. “Whether this turns out to be a serious issue or not, when a drug is stigmatized in public, people just withdraw from taking it.”

Bayer said that the company had been served with 74 lawsuits brought by women who charge that they developed health problems after taking Yaz or Yasmin. The company says it intends to defend itself vigorously against the suits.

...Lawyers suing Bayer on behalf of plaintiffs who claim that they developed blood clots, heart attacks and other health problems because they took the drugs said they intended to argue that the company knew or should have known that the pills entailed a higher risk.

One such plaintiff is Anne Marie Eakins, a history teacher in Grafton, Ohio, who developed blood clots in both lungs in 2007 and, as a result, she said, lost partial use of her right lung. She had used a variety of different birth control pills over more than a decade before starting Yaz in 2007, she said.
“To be perfectly honest, I asked my doctor about Yaz because I had seen the commercial and it mentioned helping control your period symptoms and acne, which was very attractive to me,” said Ms. Eakins, 34. “I didn’t think it was going to be worse than any other pill.”

Because drug labels for Yasmin and Yaz contain warnings about the risk of side effects like blood clots and strokes, plaintiffs may have a difficult time winning cases with the argument that the company should have issued stronger alerts. But, armed with F.D.A. warning letters to Bayer, lawyers may find more success with the argument that misleading Yaz commercials enticed women to take the drug, thereby exposing them to health risks they might not otherwise have incurred.

Last October, the agency sent Bayer a warning letter, citing the company for running two false and misleading television ads about Yaz. According to the letter, the ads overstated the drug’s efficacy, promoted it for conditions like premenstrual syndrome for which the drug is not approved, and minimized serious risks associated with the drug. In February, Bayer agreed to spend $20 million on a corrective advertising campaign to counteract misimpressions created by the original television spots.

Last month, the agency sent Bayer a warning letter about another problem-- deviations from quality control standards at a manufacturing plant in Germany that makes drospirenone and other hormone ingredients used in Bayer’s birth control pills sold in the United States. The letter said that the way in which the facility calculated variability in ingredients did not meet American standards.

Bayer said it was taking the matter seriously. Maintaining good manufacturing practices and patient safety continue to be top priorities at Bayer, the company said in a statement.

But Mr. Santoro of the Rutgers Business School said that drug companies should set higher standards for themselves than those set by the F.D.A.

“It tells me,” Mr. Santoro said of Bayer, “that it is not understanding the business that it is in, that it is not understanding the health risks that it is posing to the public or the financial risk that it is creating for its shareholders.”
From Bryan at Why Now:

Over at Naked Capitalism they put up this action request – NYC Residents: Please Attend 6:00 PM Meeting Today to Bar Real Estate Board Plan to Block #OccupyWallStreet Protests. [Update: via Steve Bates, Cynthia Kouril blogged it. Looks like a goal for the Board.]
The problem for the 1% is that the Occupy Wall Street group keeps abiding by the rules and the laws. That’s why the Казаки have to keep attacking them and setting up traps – these DFH keeps ‘coloring within the lines’. So now they are attempting to change the rules to force them out.
Graeber, an anthropologist and one of the earliest members of the OWS movement, discovered that the central cadre of the movement is made up of university educated 20-somethings who have always ‘played by the rules’, and now want to know why they haven’t achieved any success, and can’t find jobs.
These aren’t DFH radicals, these are ‘American Dreamers’, i.e. they worked hard and went to school as their parents and guidance counselors advised them to do. Now they are worse off than high school dropouts, because they have huge student loans in addition to being unemployed. You can imagine how they react to politicians talking about ‘job training’ to solve the unemployment problem.
Bryce Covert of New Deal 2.0 looks at The Economics Behind Occupy Wall Street: Shameful Income Inequality. While the 1% are making money hand-over-fist, everyone else is going backwards. We have corporate profits and poverty going up at almost the same rate. The system is broken.
From White Noise Insanity:

Bank of America Hopes You Don’t Notice Their Big Head Behind the Curtain Valued at $75 TRILLION….

bankingindustrypig

Bank of America, Wall Street, the insiders, day traders, the hedge fund managers, AIG and others are so glad you’re here. They need you, you American Schmuck.

They love their privatized profits so much so that they don’t mind creating a $1.5 QUADRILLION DOLLAR DERIVATIVES BUBBLE out of thin air and sheer greed, because they know they have you, The American Schmuck, to focus on the $14 trillion dollar debt our nation has instead of focusing on the Big Head Behind the Curtain of $75 TRILLION that Bank of America is moving $75 TRILLION in DERIVATIVES to insure these risky bets in the Wall Street High Stakes Casino they made, but want you, The Schmuck, to bail them out when needed!


See?

They love “socialism” when it’s time for the payout. Don’t let them fool you. They’re totally fine in you paying for their bad behavior.