Who told President Obama to put “controversial cuts on Social Security and Medicare on the table”? Hasn’t the president seen his public opinion polling numbers lately? He is consistently at or below 50% job approval.

Didn’t he pay attention to the special congressional election in the highly conservative, long-time Republican upstate New York district that elected a Democrat for the first time in years?

Isn’t the President Obama aware that there’s an election coming up; that many of the people he is so willingly and openly betraying rely on Social Security to live and Medicare to stay alive?

What planet does he live on? (Unless this is what he truly desires.)

We expect just this sort of behavior from his negotiating partner, Republican House Speaker John Boehner of Ohio. Boehner is part of the unashamed corruption that is the Ohio Republican Party. He learned at the feet of disgraced former Governor Robert Taft, jailed Representative Robert Ney, and voting machine magician, former Secretary of State Kenneth Blackwell. Boehner will get reelected no matter what he does the way they count votes in his home state.

The president’s behavior over the coming weeks (and past years) will make little sense unless you view the Democrats and Republicans as the distracting sideshow of the ruling elite. Obama, Boehner, and the rest of them are in place to play democracy, make us think we have some say in things. They make it look so complicated and difficult to address problems rationally and equitably. How could we, the mere citizens, ever do better, we are supposed to think.

The bipartisan sideshow exists to crush all hope that anything will change. That’s just fine with The Money Party. The more things change, the more they stay the same. The rake off by the very top fraction of a percent continues unimpeded, a mighty flowing river of cash into their gated communities.

They make it look like conflict but there’s no real conflict. Benefits will be cut. How much more obvious do they have to be? It was Obama, after all, who cozied up to Peter Peterson, the decade’s long foe of Social Security. Peterson’s deficit commission worked in tandem with Obama’s hand-picked deficit commissioners to produce this conclusion: Social Security and Medicare will be cut.

The government will continue to use payroll taxes to fund the deficit. It will continue to write IOUs for future repayment of that money to those who rightfully deserve it. But the benefits will dwindle and vanish, by design.

If there was one ounce of sincerity and intellectual honesty in this budgeting process, we would know that war is expensive. The current two are at $4 trillion right now. That’s a big chunk of the federal deficit. We would know about the extensive, expensive, and unnecessary subsidy and give away programs for corporate farms. We would hear that the Bush tax cuts plus the defense increases account for a huge portion of the current deficit. And we would hear all about how both parties gave away millions of jobs through “fair trade” deals and by encouraging flight of good jobs to places with slave wages and no labor regulations.

But we won’t hear that. The corporate sponsors of team democracy won’t stand for it.

Over the past three decades, at least, the leaders of the United States and Western Europe have failed at governance at an accelerating rate. At this point, to varying degrees, the primary strategies of the US and its transatlantic partners are: wage war; demolish the middle class; swindle large groups of people and entire nations through no-win financial schemes; and pollute at a breathtaking rate in full awareness of the outcome.

The level of incompetence is stunning. It can’t be tolerated any longer.

1. Chris Moody, Yahoo News, July 7.

Foreclosure practices lift the veil on a broader set of interlocking efforts to exploit those hardest hit by the endless economic hard times, citizens who become financially desperate due medical conditions. A 2007 study found that medical expenses or income losses related to medical crises among bankruptcy filers or family members triggered 62% of bankruptcies. There is no underground conspiracy. The facts are in plain sight.

ForeclosureGate represents the sum total illegal and unethical lending and collections activities during the real estate bubble. It continues today. Law professor and law school dean Christopher L. Peterson describes the contractual language for the sixty million contracts between borrowers and lenders as fictional since the boilerplate language names a universal surrogate as creditor (Mortgage Electronic Registration System), not the actual creditor. Other aspects of ForeclosureGate harmed homeowners but the contractual problems that the lenders created on their own pose the greatest threats.

When the Massachusetts Supreme Court upheld a lower court ruling that the actual creditor must named in the mortgage agreement (a legal requirement that the banks forgot to meet in their contracts), there was consternation on Wall Street. What would happen if a class action lawsuit challenged these flawed mortgages? Isn’t the Massachusetts decision the latest of many attacking the legal basis of the shoddy business practices and boilerplate industry contracts? What if homeowners started walking away from their underwater mortgages based on the legally flawed contracts? If there were a viable prospect of a class action suit against financial institutions threatening to invalidate these contracts, wouldn’t that crash the stock values of the big banks and some Wall Street firms?

The big banks and their partners on Wall Street need a preemptive strike to derail the legal process that threatens their existence. They may get a temporary reprieve through pending consent decrees from the United States Department of Justice and consortia of state attorney’s general. If that protection fails, big money will make every effort to buy a bill from Congress that absolves them retroactively, en masse. The consent decree might cost them a few billion dollars. That’s much better than owing the trillions in lost home values due to their contrived real estate bubble and stork market crash.

As bad as this is, it gets worse.

Beyond ForeclosureGate

The surface scandal is about fraudulent business practices and a systematic assault on homeowners by lenders, servicers, and the legal system. A much broader picture must be viewed in order to understand the utter contempt that the ruling elite has toward citizens and the depraved tactics used to express that contempt, all to serve endless desire to accumulate more money and power.

The set up began when we heard about the ownership society in the 2004 presidential election. President Bush defined ownership as taking the government out of our lives so more people could own homes and control their destinies. The foundation was home ownership. As Bush said on the campaign trail, “We’re creating a home — an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property.”¹

Then Federal Reserve Chairman Alan Greenspan was uncharacteristically coherent when he laid the foundation for the swindle earlier that year. Greenspan told the Credit Union National Association that the fixed rate mortgage was “an expensive way of financing a home.” He was clear when he advised lenders that, “consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.”²

The Chairman of the Federal Reserve and the president ratified the real estate bubble, already underway at the time, as political and financial doctrine. The advice was clear. Get an ARM, own your piece of the American Dream and spend that equity. Housing prices never go down, right?

Freddie Mack, Fannie Mae, Wall Street and the big banks provided the back room. Mortgage Backed Securities (MBS) derivatives were vastly expanded. This made it easy for more homebuyers to qualify for mortgages they might not otherwise get, credit standards dropped. Those with good credit saw an array of tantalizing zero interest loans and other mortgage products to maximize available cash and feed the stock market.

It was all good until it wasn’t.

The real scandal is the unfathomable loss of wealth and opportunities by the vast majority of citizens and the vicious attack on the most vulnerable citizens as a part that process. The attack continues and is worthy of review.

Foreclosure and Bankruptcy

Foreclosure is the down side of the ownership society. When you’re sold a bill of goods, a property that you were told you were qualified to buy, and you lose it, you are evicted from ownership island.

Before Congress passed the 2005 bankruptcy reform act, homeowners could avert foreclosure in many states by filing for bankruptcy. Not just anyone could qualify. The process of qualifying was difficult and, oftentimes humiliating. But homes were saved and families were preserved with a chance to start over.

A myth emerged of the bankruptcy abuser, a high-class sort of welfare cheat. These reckless people worked the system to rack up large debts that were subsequently wiped clean through bankruptcy. The alleged abuse of the system became the excuse for a major overhaul of bankruptcy law. The legislation passed the Senate with 74 yes votes and soon became law.

The changes since the 2005 legislation provide substantial benefits to creditors. Morgan et al. summarized the direct benefits to creditors in a forthcoming publication in the New York Fed’s Economic Policy Review. Before bankruptcy reform, the filer of a bankruptcy claim used to determine Chapter 7 or 13 filing status. That makes a difference in the amount and type of debt relief. The legislation imposes means test that determines precisely which chapter (7 or 13) filers must use. Significantly, chanter 13 filers retain more debt from medical and other unsecured credit.

Legal costs ranged from $600 to $1500 before bankruptcy reform. Legal fees now range between $2800 and $3700. Previously, there was no requirement for credit counseling prior to filing.

Filers must now document approved credit counseling six months before filing or face dismissal of their case (Morgan et al.). This counseling requirement can lead to unwarranted dismissals or inordinate delays in filing at a time when filers need relief.

Under the old law, only bankruptcy trustees appointed by the federal court could file claims of abuse by the filer. Under the new legislation, anyone can file a claim of bankruptcy abuse, which can lead to a dismissal of the cause. This is a huge benefit to lenders who wanted to keep citizens from realizing debt relief.

The Real Benefit for Big Money – Delayed Bankruptcy Filings

The new law makes it harder to file a claim, doubles costs, and gives the creditors a say in claiming fraud on the part of those who file claims. Significant delays in filing for bankruptcy became the norm.

From “Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors,” Lawless et al., American Bankruptcy Law Journal, Vol 82, 2008.

Time is money for loan servicers. A long delay before a bankruptcy filing, allows servicers the opportunity to add on special fees, many of which the borrower can’t comprehend. One thorough study showed that many of these fees were questionable. The longer it takes, the greater the revenue opportunities. Delay benefits creditors since loan payments continue at their original level.

What happened to those big spending, reckless bankruptcy abusers that were the rationale for the 2005 reforms? The following graph from the Consumer Bankruptcy Project shows that there is virtually no difference between the incomes of filers before and after bankruptcy reform. The majority of filers made between ten and forty thousand dollars a year before reform. That has remained virtually unchanged. The big spending abusers were and remain a mythical construct; the centerpiece of a diversion strategy to keep attention away from this never-ending gift to creditors.

From “Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors,” Lawless et al., American Bankruptcy Law Journal, Vol 82, 2008.

These newly empowered creditors were the same creditors who hired debt collectors to try and frighten people out of their filings. A major study found that 24% of filers reported that debt collectors told deliberate lies to avoid bankruptcy. They heard that filing for bankruptcy would lead to jail, job loss, or an IRS audit. Some were told that it was illegal to file for bankruptcy.³

The deck was stacked early against citizens and protection from creditors disappeared under the new law. The creditors, who so recklessly precipitated the economic collapse, came out on top. They were free to profit in any way they could from their new market,

What Causes Bankruptcy – Financial Shocks from Medical Expenses

Prior to the new law, the major cause of bankruptcy stemmed from medical care expenses and the resulting disruptions to families. Rather than the mythical big spender contrived by Congress, for nearly half of filers, major medical expenses, family tragedies, were the tipping point to a loss of financial viability.

The Consumer Bankruptcy Project audited a representative sample of bankruptcy filers in 2001. The audit found that 46% cited a “major medical cause” for bankruptcy. This includes the direct cost of uncovered medical bills for major illness or injury, lost work due to the same, and the need to mortgage the family home to cover medical costs.

Did Congress review this data? Were they intent on making it harder to file bankruptcy as a result of illness? When bankruptcy is delayed or simply not attainable, less money is available for needed medical care. Were the members supporting bankruptcy reform indifferent to the suffering compounded by their thoughtless legislation?

The situation is worse now. A comprehensive survey of those who filed bankruptcy in 2007 showed the increasing desperation of those faced with medical problems. When individuals or family members are in dire need of medical care, do they just sit home and suffer?

From “Medical Bankruptcy in the United States, 2007: Results of a National Study,” Himmelstein et al., American Journal of Medicine, 2009:04.

The results of this survey show that two thirds of bankruptcies result from medical care that they can’t afford or losses in income from medically required leave. Where are the big spending cheats?

Nihilists at the Helm

The big banks, Wall Street, the politicians they own, and the Federal Reserve Board created the real estate bubble in bad faith.

They knew or should have known:

• that the real estate bubble was unsustainable;
• when the bubble deflated, many homeowners would hit a financial wall; and, that
• when homeowners hit the wall, to maintain viability for their families, they would need relief of some sort.

What did the nihilists of the financial elite and their hit men walking the halls of power do with all this knowledge? They went ahead with the real estate bubble, fostered it, deregulated meaningful controls on the financial industry, and crafted a new bankruptcy law to stick it to filers. They knew or should have know that data from 2001 showed a very high rate of filings due to the financial stress of medical care and crises. Did they care? Do they care now? Has anything been done to correct this injustice?

While citizens suffer in financial distress, often due to illness, at the behest of influential bankers and investors, the Department of Justice crafts a settlement with lenders and their representatives to relieve them of the stern justice due for their specific crimes and the larger horrors they visit upon citizens, all in the name of short term profit.

We are most emphatically not a nation of laws. We are a nation where the law is used by a very few for their own purposes, without regard for the well being of the nation or its citizens. We are a lawless nation.

1. “Remarks to the National Association of Home Builders in Columbus, Ohio.”
2. “M. Collins, Money Party to Citizens – Drop Dead!, Scoop.”
3. Lawless, et al. “Did the Bankruptcy Reform Fail? An Empirical Study,” American Bankruptcy Law Journal, Vol 82, 2008.October 2008.

Members of Congress are different.  They get to retire at age 62 with lifetime pensions and health benefits.  To qualify, they need just five years of service.   They get free phone, mail, and other communications plus paid domestic and foreign travel.   Supposedly, they’re not allowed to take gifts but the list of exceptions offers plenty of room for luxurious appreciation.

The biggest gift of all – a six to seven figure job with a major corporation or lobbying firm right after retirement – is still fair game for any member.  The revolving door never stops.

But supposedly Congress passes laws for the public benefit.  They come to power based on contributions from their patrons, usually large donors.  Then members resolutely deny that these contributions translate into legislation favorable to the donors.  If pressed, member’s state that the contributions merely buy access not votes.

In fact, members routinely vote the interests of their largest patrons.  Thus, the contributions are a form of legalized bribery (“a favor or promise given to influence the judgment or conduct of a person in a position of trust.”).

The financial industry contributed hundreds of millions to current members.  When Wall Street was about to fail in late 2008, they called in their markers and got an immediate bailout of $700 billion and “total potential Federal Government support (that) could reach up to $23.7 trillion”  from the Federal Reserve and other government sources.  This was in the midst of the 2008 federal election cycle when members solicited funds from the very people they bailed out.

Would this have happened without years of contributions by the financial industry?

What other incentives were involved that were not revealed?

The people face a health care crisis of epic proportions, losing insurance, under coverage for life threatening conditions.  They have to delay or cease medication due to ever rising costs.  Health care is unaffordable to many.

Congress addressed the problem much like they did the financial crisis.  A bill was passed that left health insurance companies at the center of health care taking a handsome profit for doing little to nothing.  Prior to passage of the health bill, the insurers raised rates shamelessly and did so again after the legislation was enacted, using the very health reform passed for the people to gouge the people for more money.

In the midst of total unemployment at about 20%, with poverty on the rise, what has Congress done?  The vast majority of citizens get little or no attention while those who cause the financial meltdown are handsomely rewarded.  Members of Congress fret that they simply can’t get the votes to help the people.   But we know different.

It’s planned failure that  serves their wealthy donors.  That’s not a system of laws.  It’s an oligarchy with a strong dose of kleptocracy.

Congress routinely ignores the Constitution.  Article I outlines “All legislative Powers herein granted shall be vested in a Congress.”  Section 8 of the article lists this power:  “To declare War.” When presidents make war without congressional authorization, Congress passes legislation that negates its war making powers in order to legitimize the illegal act by the executive branch.

These wars are funded by Congress even when a war was found to be based on lies, as was the case in Iraq.  Congress continues to fund the efforts claiming it is necessary to protect the troops.  They fail to acknowledge that the absence of illegal wars harmful to the nation is the best troop protection available.

With the illegal wars underway, Congress passes legislation to address the problems created by the illegal wars in the name of national security.  As they do this, the real issues of national security, the legal rights of citizens and the economic well being of the nation, are violated or ignored.

A key function of Congress is oversight and investigation.  When the nation was attacked on 9/11, the hapless response by the executive branch was on full display.  A 2002 House – Senate Joint Committee detailed the extensive government knowledge of the emerging plot over years without effective executive action to stop it.  Nothing came of the report.  It is as though it never occurred.

When the 9/11 Commission was finally established, Congress allowed a former Bush administration insider to serve as the executive director and appointed co-chairmen who thought that the executive director was just fine.  It came as no surprise when a thoroughly inadequate report was produced with key sections blacked out.

Illegal wars, the stripping of fundamental rights like habeas corpus, the declaration that presidents have the right to assassinate U.S. citizens by executive order, the rendering of charges without having to specify those charges were all ratified by Congress.  It must be legal.  Didn’t Congress pass a law?

But they couldn’t do this without the full cooperation of the judicial branch of government.   Surely, our Supreme Court and federal judiciary are the last bastion of the law that is to protect us all.

Even if that were the case, the sheer weight of executive and legislative lawlessness presents an overwhelming tide that is irresistible to those in power.   The seamless system of self-supporting lawlessness is an efficient structure denying citizen rights by mocking the laws of the nation.

An LA Times article on 15 September states:

President Obama, sidestepping a possibly heated confirmation battle, will appoint Harvard law professor Elizabeth Warren as a special advisor to the Treasury Department to launch the government’s powerful new Consumer Financial Protection Bureau, according to two Democratic officials familiar with the decision.

An interim appointment would have given the no-nonsense Warren the full authority to structure consumer bureau in the interests of the people. A special adviser role is defined in a New York Times article on 15 September  as follows:

Ms. Warren will be named an assistant to the president, a designation that is held by senior White House staff members, including Rahm Emanuel, the chief of staff.

She will also be a special adviser to the Treasury secretary, Timothy F. Geithner, and report jointly to both men.  

The title of the Times article says it all: “Warren to Unofficially Lead Consumer Agency.”

Of course, President Obama could have set it up for Warren to officially lead the agency through an interim appointment. Warren’s outstanding efforts and her extraordinary record of being right on the issues are more than enough justification for that.

Even better, the president could have submitted the nomination to the Senate for approval and dared any or all members of that body to challenge Warren. Her record of written and live presentations has been excellent. Why should we believe the storyline that confirmation is out of the question? It’s probably just more corporate media stenography dictated by White House operatives who opposed the appointment from the start.

But here’s the kicker.  Ryan Grim, in an article on 14 September, wrote that the soon-to-be retired Chris Dodd (D-CT) warned that the consumer agency might implode if Warren received an interim appointment:

Outgoing Senator Chris Dodd (D-Conn.) warned Tuesday that an interim appointment of Elizabeth Warren to head the Consumer Financial Protection Bureau ‘jeopardizes the existence’ of the nascent agency.

That would be the same Sen. Dodd who crafted a financial reform bill that had a highly favorable impact on a financial services firm that employs his wife.

So there you have it. The chairman of the Senate Finance Committee who got a deal we’d never get on a mortgage from a big bank and who authored a self-serving financial reform bill is determining who will protect citizens against the rapacious greed of the financial services industry. Telling, isn’t it?

How will Warren be treated by “co-boss” Geithner?

Here’s an excerpt from Warren’s questioning of her new boss at an oversight hearing on the AIG bailout. She wanted to know why AIG counterparties (mainly large financial institutions) got 100 cents on the dollar while investors in other bailed out entities got much less. Specifically, she wanted Geithner to tell her if he’d had conversations with any of the beneficiaries of the sweet AIG deal. Here’s a key portion of the exchange beginning at 1:44: .

Geithner: Where are you going. What would you like to know?

Warren: Did treasury have conversations with any of the counterparties…

Geithner: I was not Secretary of Treasury but I was president of the New York Fed and, of course, I was central to the basic judgment we reached together to prevent default by AIG. I’m sure that was the right judgment at the time and you’re right to point out that that action did help make the system more stable, did have broad benefits to the stability of the system, including the direct counterparties.

Geithner refused to answer the question about conversations with those who would benefit from the AIG deal. He looks like a horse’s ass, and he got beaten up in the press as a result of that encounter. Yet we’re expected to believe that the Treasury Secretary will be supportive of Warren’s efforts to institute real consumer protection from the same industry that Geither protects so fiercely.

A bit later in the hearing — starting at 4:07 – Warren had Geithner so flustered, he clearly alluded to the foreign banks that got 100 cents on the dollar from the AIG bailout. They are the “people abroad” whom he’s so reluctant to mention or acknowledge meeting.

“By preventing default we helped AIG meet its financial obligations, not just to people abroad, insurance protection, savings protection products, but to its broad counterparties.” (Author’s emphasis)¹

Warren has been challenging Geithner and the socialism for the rich program known as the bailout from her first days as chair of the Congressional Oversight Panel monitoring the bailout. Now we’re expected to believe that she will be given real authority to advocate for the people in an unofficial capacity while reporting to Geithner, as well as President Obama. We are asked, further, to believe that Obama couldn’t get the nomination approved by the Senate and that he couldn’t appoint her as the consumer bureau’s interim director.

The people know a fraud when they see it. This one is in sharp relief against the background of the great wealth transfer program from just about everybody to the self-selected few who own the controlling interest in the executive, legislative, and judicial branches of our government.

The Democratic Party as “The Cooler”

We’ve entered an extraordinary era in U.S. politics. The financial and power elite are now in a no lose situation. The Republicans are in full lock step with the rigged game for the super rich. This includes relentless anti-union activities; the continuation of the same Wall Street practices that toppled the financial system; a failure to relieve people losing retirements, homes, etc.; and an economy dependent on wars of any type. Despite their numerical superiority in the Senate, the Democrats claim that they just can’t get anything passed without 60 votes, no way around it. That, of course, is fiction. The end result is stasis, the status quo, and the continuation of failed policies with a few cosmetic changes on the margins.

Rather than acting like a real opposition party, the Democrats enable the worst excesses of the Republican era of greed by their failure to undo those excesses. They pawn tepid “reform” and then run to their corner begging for mercy from the people who elected them to bring real change and some degree of social justice.

In the case of Warren, a fake drama was created whereby the White House could get credit for appointing Warren for full Senate approval while snatching back both that appointment and an interim slot; all in the name of political necessity. Whose necessity? Who benefits?

All involved in this destructive drama should be ashamed. But they won’t. They don’t care because they don’t have to care. They’re above the law and the real world consequences of a truly open political system.

Chalk it up as another big triumph of The Money Party.

1. The Geithner Squirm Video

The current leak was posted to their web site on August 25. It is titled “CIA Red Cell Memorandum on United States “exporting terrorism”, 2 Feb 2010.”

The leak describes Red Cell as a CIA unit created by the Director to develop “out-of-the-box” analysis offering “alternative viewpoints” on key intelligence issues.

This document doesn’t disappoint in being out-of-the-box.

CIA Perception Management: How the World Sees the United States

CIA Red Cell starts out by stating, “This report examines the implications of what it would mean for the US to be seen increasingly as an incubator and exporter of terrorism.” Don’t hold your breath. There’s nothing there about the School of the Americas, the shock and awe invasion of Iraq and the carnage that entailed, or 300 dead Panamanians and United States soldiers as a result of the 1981 manhunt for General Manuel Noriega, a former US asset.

This document lists four examples of terrorism exported by citizens of the United States. Five Muslim Americans traveled to Pakistan, tried to join the Taliban, and were arrested. Red Cell notes that, “In 1994, Baruch Goldstein, an American Jewish doctor from New York, emigrated to Israel, joined the extremist group Kach, and killed 29 Palestinians during their prayers.” Also singled out are those Irish Americans who provided cash to the Irish Republican Army used to fund terrorist attacks in the United Kingdom.

Of most interest, convicted terrorist David Headley is cited as an example. A Pakistani American from Chicago, Headley recently plead guilty to providing “advanced surveillance” for the 2008 mega-terror attack on the Indian financial capitol, Mumbai.

The London Sunday Times pointed out that Headley had been “working for” the US Drug Enforcement Administration as part of a plea deal in 1997. The Times of India quoted unnamed Indian officials investigating the attacks as speculating that Headley “could have been a double agent for American agencies and Pakistan-based outfits.” US government officials deny any connection with Headley after a brief association with DEA.

The analysis concludes “that Americans can be great assets in terrorist operations overseas.”

The perception that the US is an “incubator and exporter of terrorism” may create push back by other governments in the War on Terror. The report cautions that this may lead to formal inquiries concerning US citizens by foreign intelligence agencies who may “even request the rendition of US citizens.” Renditions involve the transfer of suspected terrorists from one state to another where torture is used to extract information.

The report warns that US failure to cooperate with these requests, “might lead some governments to consider secretly extracting US citizens suspected of foreign terrorism from US soil.”

All this might limit cooperation by US allies in anti-terror efforts.

The Red Cell Memorandum Makes No Sense

We are told that the perception of the US exporting terror would limit the cooperation of other nations in anti terror efforts. If that’s true, then we would expect that the US would be less than cooperative with other nations that export terrorism, defined as citizens leaving their country and committing terrorist acts elsewhere.

Didn’t President George W. Bush kiss the Saudi King and hold his hand in a garden walk in 2005? Was that indiscreetly affectionate behavior deterred by the perception that the Saudis are an “exporter of terrorism” in the form of bin Laden and the Saudi citizens named as pulling off 9/11? Didn’t the current Justice Department support Saudi Arabia’s attempt to block a suit by 9/11 victims? Didn’t the US have up to 10,000 troops in Saudi Arabia from 1991 through 2003 at the very time that Saudi nationals were sponsoring schools throughout the Middle East that taught hatred of what is now called the homeland?

Other nations allow the US to violate their sovereignty to kidnap and torture their citizens as a result of asymmetrical power. The US can crush these nations militarily and financially. The US also offers financial inducements to the leaders of some nations involved. Therefore, they cooperate.

The report assumes that there’s some sort of rule book that allows other nations to behave toward the US as the US does toward them, if somehow US citizens leave the country and commit terrorist acts. In reality, there’s no referee or rule book, just a one-sided power equation in favor of US action. It’s all about power and dominance.

This leak doesn’t amount to much more than a peek at what is viewed as a “thought provoking alternative” view within the CIA. It misses the main point regarding the perception of the US throughout the world.

The Real Export of Terror: Reality Trumps Perception

The United States operates what is commonly known as the School of Americas in Georgia. The school offers training in counterinsurgency, interrogation, and anti terror tactics and strategies. Thousands of Latin American military personnel have trained there over the years. Graduates include some of the worst dictators in that region including those behind the deadly Operation Condor in the 1980s. Some of the worst atrocities in the region were committed by school graduates. The school’s level of responsibility for the behavior of it’s graduate can’t be quantified in precise terms. However, for some graduates, the training failed to instill a respect for humanity and taught tactics that were employed against the citizens that the military leaders were to protect.

The US has held the leadership position in NATO since its inception in 1949. In 1990, the European Parliament passed a resolution condemning Operation Gladio and US involvement (European Parliament resolution on Gladio, Nov. 22, 1990, Clause G. 2). This involved paramilitary groups in NATO member nations and France. The groups were created by US and British intelligence after World War II. The original goal was to provide resistance in case of a takeover by the Soviet Union. Long after that was a viable concern, the groups continued by staging false-flag terror attacks against their own citizens. The incidents, which killed thousands, were committed by the Gladio groups and falsely attributed to Communists and Soviet sympathizers.

These are just two examples of the unrestrained and counter productive use of power exported by successive US administrations. It’s no accident that this information is kept from US citizens. Sufficiently informed, the vast majority would find these programs offensive and counterproductive. But it’s no secret to the rest of the world. The concerns expressed in the Red Cell Memorandum are moot. It’s too late. The word is out.

“I think we have an agreement with the Iraqis that both governments have agreed to, that we will be out of Iraq at the end of 2011,” he (Gates) said. “If a new government is formed there and they want to talk about beyond 2011, we’re obviously open to that discussion. But that initiative will have to come from the Iraqis.”

At the time of this post, if you do a Google “News” search for the sentence underlined, you will find it only at the VOA source. The article notes that Gates made the statement, “to reporters on his aircraft during a domestic trip on Wednesday.” Apparently, it wasn’t newsworthy except to the official news agency for the United States government.

President Obama’s withdrawal promise has been treated with some skepticism. Now we’ve got Robert Gates adding a cynical codicil: “if they want to talk … we’re obviously open to discussion.”

Who’s in charge here?

We’re used to some military officials challenging President Obama’s authority. Both General David Petraeus and former Afghanistan commander General Stanley McChrystal have contradicted Obama. But now we have the Secretary of Defense encouraging the Iraqi government to speak up if they want us to stay. He’s giving that government leverage to force a discussion of a set policy at a critical juncture.

One has to wonder where Gates gets the confidence that Congress would approve another year or ten simply because the Iraqis government asked.

Creating a Storyline

The Voice of America charter states that, “The long-range interests of the United States are served by communicating directly with the peoples of the world by radio.” VOA How well did it do its job in this article?

The narrative presented the troop withdrawal as being on time but then raised questions about the wisdom of the overall policy and the removal of all US troops by the end of 2011. VOA quoted Iraqi Lieutenant General Babakir Zebari and alluded to a larger unnamed group as questioning the 2011 deadline.

At that point, the article brought in “Iraqi expert” Michael O’Hanlon of the Brookings Institution, a DC think tank supposedly aligned with the Democratic Party. Part of O’Hanlon’s expert credentials were earned as an early supporter of the invasion planning by former Secretary of Defense Donald Rumsfeld.

The Iraqi “expert” of choice said that General Zebari’s views were probably those of most Iraqi commanders. Then he offered this endorsement of an ongoing occupation.

“Why do you want to run the risk of taking away this good friend of the Iraqi people, and this sort of stabilizing, independent, neutral capability in the form of the United States military, when you’re not yet sure all the Iraqi wounds have adequately healed for that country to really be on a path toward stability,” asked O’Hanlon. (Video.)

It was time for VOA’s message to the world, Gate’s offer to change the withdrawal deadline.

There was no mention of competing arguments including the stated policy of the US government. There was certainly no rebuttal offered for the absurd statement in O’Hanlon’s set up about the U.S. as “this good friend of the Iraqi people. Can he read? And there was not a mention that the Iraqi people have consistently favored a U.S. withdrawal in six to twelve months for years.

Corrective Action?

The VOA presented a one sided set of arguments for breaking the commitment of the President of the United States, Congress, and the will of citizens.

Surely, the president will fire the head of VOA and take Gates to the woodshed for creating confusion about a vital national security interest. Otherwise people might conclude that he agrees with this backpedaling on a full withdrawal by the end of 2011.

The officers charged were allegedly part of Sledgehammer, the latest plan in a series of military plots and coups by the Turkish high command. The military and its allies were to blow up mosques, churches, and synagogues; then blame these acts on terrorists, Kurdish separatists, for example. In addition, the military planned to provoke the shoot down a Turkish aircraft by the Greek military and down a civilian airliner blaming it on terrorists.

In the midst of the chaos, the military planned to assume total control of the government, chase off the ruling AK Party, and end democracy in Turkey. The Turkish Constitution gives the military the option to step in to restore order if the civilian government fails in this regard. The elaborate Sledgehammer false flag operation was designed to make the ruling AK Party government look “weak” and promote public acceptance for military rule. The full plot was to be hatched in 2003, shortly after the refusal of the Turkish parliament to provide a launching area for the United States invasion of Iraq.

The conflict in Turkey is not between the military, supposed guardians of secular democracy, and the government of the AK Party. It is a conflict between the Turkish people and their independent judiciary versus what is widely regarded as the Turkish deep state. The secret arm of the Turkish state was acknowledged by various factions in Turkey. It consists of elements of the military, media, and civil government that conduct terror in behalf of their vision of the Turkish state. Over 14,000 individual were murdered through 1998 by deep state operations.

In addition to Sledgehammer prosecutions, there are over 150 senior military officials and civilians under indictment for the Ergenekon coup plot dating back to 1980. Operation Cage was exposed after Sledgehammer. Hatched in 2009 by the military, this plot involved attacks on citizens by the military posing as Kurdish or other “radical” elements. The main goal of “Cage” was outlined in the planning document:

To increase pressure by both local and foreign communities on AKP Government, to keep the public opinion pre-occupied and change the agenda, particularly Ergenekon Case. Operation Cage Action Plan

There are three elements of this crisis that are coming to a head right now.

The military is preventing arrests by allowing the accused Sledgehammer plotters refuge on military bases where they are shielded from arrest. This defies the civil authority represented by Turkish prosecutors and courts.

The military is proposing to promote officers, many of whom are among the 102 subject to arrest, in defiance of tradition and law preventing promotions of those accused of committing crimes against the state. Turkish Prime Minister Erdoğan is refusing to ratify the promotions if made.

Finally, on September 12, the nation will vote on a constitutional amendment that will strip the military of their previously granted right to intervene with coups when, in their opinion, the state is threatened.

The outcome of this most recent crisis will determine the direction that Turkey takes in the quest for full democracy absent the shadow of the military deep state.

The virtual silence of Western governments and media regarding the crisis in democracy in Turkey betrays a casual indifference, perhaps even endorsement, of the various crimes planned for and inflicted upon the Turkish people.

Just ask the Ogoni people from Nigeria’s oil rich central Niger Delta. Their experience over decades offers a model of things to come without serious changes in consumption and regulation.

Since the early 1960′s, oil spilled from Shell pipelines has fouled their region. Food and fresh water sources vanished. Their economy collapsed. While Shell and the Nigerian elite reap their rewards, the people in the polluted oil regions live with steadily declining jobs, incomes, and living standards.

The amount of oil spilled in just this region during the 1970′s far exceeds that of the 1989 Exxon Valdez disaster. The problem has been continuous since then. Most of it is still sitting there

In some critical ways, oil exploration, pollution, and the reaction of Shell and the Nigerian government parallel the Gulf of Mexico catastrophe.

There is virtually no regulation of oil exploration and operations in Nigeria. Similarly, new deep water drilling permits in the Gulf of Mexico were granted without environmental impact studies.

The government of Nigeria abandoned its sovereign obligations to protect the people by failing to take charge of clean up operations. In the Gulf of Mexico catastrophe, BP took the lead in repair efforts while the United States government accepted an oversight role.

The Nigerian oil industry ignores locals in hiring and contracting. BP uses locals as public relations props for its cleanup operations.

The Nigerian government makes blames oil companies for turning the country into ‘World Oil Pollution Capitol‘, yet does little to stop the situation. The U.S. government is investigating criminal charges against BP while it allows BP control of the crime scene.

Nigerian and international press are chased off of the scene by Shell and the other oil giants just as BP chases away the media and citizens who try to document and report on the Gulf catastrophe.

The Nigerian government blames “rebels” for the oil spills. The government tried and hanged those who resisted what economists call the Dutch Disease, Shell’s ruinous impact in Nigeria’s economy. There have been few demonstrations in the U.S. and no trials of protesters. However, federal whistleblowers who tried to warn the world of what we’re seeing today were ignored.

They can’t do that here. Can they?

It’s happening here right now. Why think the BP catastrophe is the first and last of its kind. There are 4,000 active drilling platforms in the Gulf. BP isn’t the only oil giant to make major mistakes.

Think of it as a lottery. This year it’s BP. Next year it could be Exxon, Shell, or one of the smaller companies.

This deep water drilling foul-up threatens to turn large sections of the Gulf of Mexico into dead zones for decades. It will happen again.

How many dead zones can we tolerate?

Oil at Any Cost

The U.S. consumes 25% of the world’s oil supplies. The breakneck pace of exploration and extraction activity worldwide is a direct outcome of that consumption. The Nigerian oil spills, the deaths, the suffering, and the long term pollution are an outcome of the voracious consumption of oil led by the oil dependent G-20 nations.

New G-20 club members are ready to join the first world’s oil orgy. China consumes 10% of the global oil supply currently. That figure will soar over the next few years. India represents another rapidly expanding market for oil. The two combined will soon shove the U.S. into third place among the major nations reliant this toxic substance.

Drilling for oil in the Gulf of Mexico is directly tied to the demands of U.S. consumers. The public must quickly make the links between oil dependence, human suffering, and the destruction of the habitat.

Solutions Offered

The American Power Act was hailed as the grand effort that would change the face of U.S. energy consumption and dependence. Analysis of the act shows that it maintains oil as a key pillar of the economy. Assumed oil use in 2030 is about the same as it is today and today we’ve got BP ruining the Gulf of Mexico with other disasters pending.

Doesn’t it occur to our so-called leaders that we’re in a crisis situation?

We can’t maintain our society, as it stands now, without maintaining big oil. That means more major catastrophes that will foul large segments of the earth; the places where we live and earn our living.

Industry friendly analysts say there’s no way to get rid of oil it as they deride alternative fuels. The rulers assent by accepting this false premise. This is their excuse to issue more drilling permits in ever riskier locations.

And no one in the power structure has the courage to call out the G-20 governments and oil concerns (many of which are government run).

We’re in a death spiral of industrial calamities that are all for the sake of producing petroleum products that will, in turn, create another set of appalling calamities called man made climate change.

Major regions of the world stand in peril from looming Gulf of Mexico class catastrophes. And all the oil companies and their friends can say is: You’re stuck with us. Give us more drilling permits now.

Where’s the leadership, the innovation, the mobilization like that seen for the fateful project that created an entirely new form of energy, the Manhattan Project?

How about a Manhattan Project to save the planet?

British Petroleum (BP) had the resources to drill the well but lacked the planning and ability to deal with its failure.  The oil giant’s performance inspired ridicule by Jon Stewart in a recent Daily Show comment (“There will be blame“).  The White House was not amused, however.  Nobel Prize winning physicist and Secretary of the Energy Steven Chu is now in Houston with a team of cutting edge scientists tasked with mentoring BP and devising a viable solution as the oil giant continues to falter.

There is a well known history of oil company accidents including blazing oil rigs, the Exxon Valdez tanker leak, and the Prudhoe Bay pipeline collapse (another BP special).  But nothing matches the collapse of BP’s Deepwater Horizon structure at the Macondo prospect, Gulf of Mexico.

The failed site is gushing between 200,000 and one million gallons of oil a day into the Gulf of Mexico.  The Center for Biological Diversity reported that the Minerals Management Service (MMS), the federal agency that approved drilling, routinely ignored Federal biologists by issuing waivers that failed to take in to account the impact of drilling on endangered species.

Adding humans as an endangered species might be a timely move.  The National Oceanic and Atmospheric Administration (NOAA) produced a document on April 28 indicating the leak could reach over two million gallons of oil a day.  In addition to ravaging the Gulf of Mexico, the damage caused by oil may extend to the Florida straits and the Atlantic coast of the United States.

While BP estimates that it can contain the gusher within a week, Admiral Thad Allen of the U.S. Coast Guard is planning for the event to become a full scale catastrophe.  His candid admission that half a million gallons of the toxic oil dispersant have been released above and below the gulf indicates the current  level of desperation to contain the accumulating mess.

Too Big to Exist

BP is a $250 billion company, one of the six largest oil and natural gas exploration and marketing companies in the world.  It’s the largest corporation in the United Kingdom.

A look at its public safety record over the past five years raises questions about the ability of the company to function safely.  In 2005, BP’s Texas refinery had a series of explosions that killed 15 and injured 170 more people.  Residents near the refinery were confined to their homes to limit toxic exposure.  The U.S. Chemical Safety Board issued a thorough report laying responsibility at BP’s doorstep.  The company’s poor maintenance of the Alaska pipeline at Prudhoe Bay due to “draconian cuts” in maintenance resulted in a major oil spill in 2006.

CNN conducted a major review of BP’s challenges in light of these two disasters in 2006.  Presented with evidence showing  neglect of pipeline corrosion at Prudhoe Bay, Alaska, the BP executive in charge claimed, “We were blindsided by the recent leaks.”  At congressional hearings, one BP officials invoked the Fifth Amendment to avoid “self incrimination.”  BP senior management promised to take the steps necessary to moderate the company’s obsession with the bottom line at the expense of safety.

Despite promising to remedy the problems it created in both disasters, BP had a poor track record of keeping its promises prior to the current catastrophe.

After being chastised by President Barack Obama for creating a “ridiculous spectacle” in the midst of the crisis, BP’s CEO Tony Howard tried to diminish the scope of the problem.  The CEO insisted that deep sea oil drilling will continue.  He’s right.  BP has 32 Gulf of Mexico oil operations at greater than 5000 feet.

BP is not the only oil company with a poor safety record.  It’s the first big oil company to cause a catastrophe of this magnitude.  It must be the last.  We simply can’t tolerate these lumbering giants that place cost cutting for bigger executive bonuses above the safety and survival of those who use their energy products.  If you put your customers out of business and injure or kill them, they can’t buy anything.

We are the endangered species.

The second debate changed all of that.  Gordon Brown, the current Prime Minister, took deliberate aim at Clegg and Cameron dismissing them as though they were foppish boulevardiers stalling the progress of his carriage.  “You remind me of my two young boys at bath time,” he chided.  He also delivered the lash on several occasions when he accused Clegg of being “anti American” and a threat to Britain’s nuclear deterrent.   Cameron got off a bit lighter as a threat to Great Britain’s relationship with the rest of the European Union.

The roughhouse tactics by Labour’s Prime Minister (who lost an eye playing rugby) had an effect.  By tonight’s debate, the Liberal Democrat’s ascendancy was stalled and the once high flying Conservatives were nowhere near their 43% figure before the first debate.  The Sydney Morning Herald analyzed the polls this way:  “many voters have not made up their minds and will only do so when they enter the booths next Thursday.”

The Debate: The Economy

If the debate were judged on overall presentation and polished delivery, Conservative David Cameron was the clear winner.  His opening statement reprized President Obama’s campaign themes as he said “our economy is stuck in a rut and we need change to get it going.”  He spoke of the need to “fix our banks … get them lending again” and the task of “making things in our economy.”

Liberal Democrat Clegg sounded like the Robert Redford character in The Candidate (“For a better way”) when he said “I think we’ve got to do things differently.”

The battered Prime Minister Gordon Brown made a substantive point that he repeated several times:  “Support the economy now and you will insure there are jobs and a recovery …  shrink the economy now as the Conservatives would do and they risk your jobs, your living standards,  and tax credits.”

The debate was divided into sections based on questions from audience members at the Great Hall of the University of Birmingham.  As the debate unfolded, it was apparent that Conservative Cameron and Labour’s Brown were the main combatants.  Brown warned of return to the disastrous policies of the late Prime Minister Margaret Thatcher.  Cameron kept busy co-opting themes from the Obama campaign and avoiding Brown’s repeated questions on specifics.  Clegg was oddly reticent in light of branding himself as something different and better in British politics.  A pattern emerged.

Clegg’s Grand Betrayal

Clegg revealed what I’m calling the grand betrayal early on while discussing budget cuts.  His solution was process based.  It was time “for once to get the politicians working together on this. I don’t know whether David Cameron and Gordon Brown want to take up my invitation.”  This statement was made with urgent sincerity even though Clegg had indicated just days before that he would form a coalition government with the Conservatives but not with Labour.

What would Brown’s incentive be to work with Clegg when he’d already made up his mind that the Conservatives were the preferred party to rule (Cameron leads in the polls and, presumably, would be able to form a government with the Liberal Democrats).  Why would Clegg need to work with Labour considering the super majority that the proposed coalition would bring?  Could Clegg actually believe that Cameron’s Conservatives, the arch enemy of Labour, would even allow it?

Brown pointed out that both Cameron and Clegg were ready to cut the “child tax credit” at a time when it was needed more than ever.  Clegg and Cameron failed to respond.

Brown raised the issue of Conservative proposals for inheritance tax breaks for the “richest 3000″ citizens.  “It’s simply unfair and immoral,” Brown challenged.  Cameron failed to explain this position despite several direct questions by Brown.  Clegg was largely silent.

When Brown argued that “The biggest beneficiary of the Conservative manifesto are the richest in this country” Once again, Clegg was on the sidelines with little to say.

When Brown warned against “same old Conservative party of the 1930′s, 1980′s, and 1990′s,” Clegg demurred.

A questioner asked what would be done about people relying on unemployment benefits. Brown’s responded that the first order of business was to create enough jobs to provide employment.  Cameron criticized “welfare dependency” by beneficiaries and Clegg said that welfare benefits are promoting “greater dependency on state.”

Brown said, “I’m interested in social mobility.” Neither of the challengers had anything to say about that.  It was as though the jobs and fairness they both spoke of had nothing to do with economic class.

Brown told Cameron and Clegg: “You’re not telling us that a million people would lose coverage under both of your proposals.”  The two showed unity in their silence.

After cleverly branding the Liberal Democrats as something different, an alternative to the old parties, Clegg surged in popularity after the first debate.  Brought down to earth after the second appearance and greater scrutiny, Clegg then revealed his true colors.

Proposing an alignment with the party of Margaret Thatcher and her latest political heir is a betrayal of the image that Clegg advanced from the start of his campaign.

In the Liberal Democrat’s Manifesto, Clegg opens by asking this question: “Doesn’t it make you angry that after 65 years of red-blue government, a child’s chances in life are still more determined by their parents’ bank balance than by their own hopes and dreams?”  But when Brown said that he was “‘passionate about opportunities for children,” the Liberal Democrat offered little support.

How angry will the Clegg supporters be when he joins the enemies of the National Health Service, social welfare, and jobs programs in the midst of a severe recession?

A senior campaign official with Labour summed up what may be the outcome of this election. Lord Mandelson, Labour’s election strategist, immediately warned in a campaign memo that “voters who flirt with Nick Clegg are likely to end up married to David Cameron.”

Before the conference began, Assange described this as a “very rich story.”  He opened with a brief statement and then showed the video tape. 

WikiLeaks received the tape through unspecified channels.  Assange did say that the leak to his organization “sends a message that there are some people in the US military who don’t like what’s going on.”

The video captures an incident on July 12, 2007 in a Baghdad suburb.  This event has been a matter of controversy since a Reuter’s photo journalist, Namir Noor-Eldeen, and his assistant, Saeed Chmagh, were both killed in the incident.

Reuters described the scene as follows:

Reuters has asked the US military to conduct a full and objective investigation into the deaths of two employees in Baghdad on 12 July. Photographer Namir Noor-Eldeen, 22, and driver Saeed Chmagh, 40, a father of four, were killed while working in the eastern area of the Iraqi capital.

The cause of their deaths is unclear. The US military issued a statement describing the incident as a firefight with insurgents and said the killings were being investigated. Witnesses interviewed by Reuters said they saw no gunmen in the immediate area and that there had been a US helicopter attack, which police described as “random American bombardment”. Reuters reported it was doing everything it could to work with the authorities to find out how the men died, and was supporting the families.¹

The Army never released the video tape from the two Apache helicopters responsible for the attack despite a freedom of information request and pressure by Reuters.

A “random American bombardment”

Today’s tape clarified the concerns about the killings and provided no evidence that this was an engagement with insurgents.  Adult men are seen gathering on a street in the suburb of Baghdad.  Assange pointed out that the two experienced Reuters journalists present seemed relaxed and casual despite the presence of the helicopters.  WikiLeaks’ analysis showed the possibility of an RPG and possibly an Uzi machine gun.  Uzi’s are legal weapons in Baghdad.  RPG’s are a common weapon in the civil strife in Baghdad. As the Apache helicopter circled overhead, communication between the pilots seems bland and matter of fact.  There’s the assumption that these are hostile forces but there is no indication of a “firefight.”

After the attack on the people gathered, the tape went on to show a van stopping to rescue Saeed Chmagh, the photojournalist assistant.  People are seen loading Chmagh into the van.  Recent investigation in Baghdad by WikiLeaks and their Icelandic media partners confirmed that the van was driven by the father of two taking his children to tutoring.  The children were in the front seat and seriously injured. US military personnel arrived in an armed carrier and sent the children to an Iraqi hospital.  Photojournalist Noor-Eldeen is seen run over by an armored personnel carrier.  He and Chmagh both died in the incident.

Assange showed additional footage from the attack after a 20 minute gap in the tape, present when WikiLeaks acquired the video.  In this instance, a building on a busy street is attacked by the same Apache helicopters.  The tape showed one man entering the building, while the US military reported more.  There was no reaction to the helicopters overhead by those seen on the street.  Shortly after the helicopters began circling, they attacked the building with their onboard cannon.

In the question and answer period after the well attended video presentation, Assange pointed out that this was not the video tape from Afghanistan referenced previously by General David Petraeus.  Wikileaks has the tape but is still analyzing it.  Assange was asked why the tape wasn’t released immediately.  He pointed out that analysis was a complex matter and WikiLeaks needed some on the ground investigation in Baghdad to make the tape as meaningful as possible.

He said that the tape was “conveyed” to WikiLeaks through the US military but would not say that the leak was provided by a member of the military.

The highly evocative tape will be seen around the nation and world today and, no doubt, form the basis for an ongoing investigation by Reuters which can now view what they requested nearly three years ago.

WikiLeaks has produced more scoops than the Washington Post has in the past thirty years according to a report by The Guardian. The web based service was “founded by Chinese dissidents, journalists, mathematicians and start-up company technologists, from the US, Taiwan, Europe, Australia and South Africa” according to their “About” page. WikiLeaks targets oppressive regimes throughout the world, as well as regimes seeking to repress information on illegal and unethical government actions and policies.

1. Reuters, July 13, 2007.

When I read a statement like that, it’s like hearing the opening music for The Twilight Zone.   What on earth is Perry talking about?  Every CENTCOM commander, from General Tommy Franks, through Petraeus, has endorsed the continuation of the Iraq war and occupation.  That’s as essentially political as you can get.

There was no basis for invading Iraq: no weapons of mass destruction and no terrorist threat.  Even the flawed October 2, 2002 National Intelligence Estimate (NEI) admitted that the primary threat of an Iraqi terrorist attack on the United States would come if, “an attack that threatened the survival of the regime were imminent or unavoidable, or possibly for revenge.”

The invasion commenced despite the fact than an invasion was the one scenario described in the NEI that could cause a terrorist attack in the United States.  It was a political decision that had nothing to do with the safety of the nation.

Petraeus’ accuracy is undeniable on the impact of the unresolved Israeli-Palestinian conflict.  U.S. standing is compromised by our ongoing promises to Arab leaders that we’ll deal with the Israel-Palestine conflict while, at the same time, we endorse Israeli settlements in occupied Arab territory by continually turning a blind eye.

But there’s a larger picture to examine.

Let’s see what else impairs U.S. standing and our national interests in the Middle East.  How about the continued occupation of Iraq?  Then there’s the over one million dead Iraqi’s due to civil strife caused by our invasion.  Forty thousand new troops to Afghanistan might have an impact on our standing.

To generalize, U.S. standing in the Middle East is severely compromised by wars of aggression, ongoing occupations, and the expansion of existing war efforts.

This controversy is nothing more than a tactical strike by a military establishment that is tired of dealing with the blowback from our longstanding policies in the Middle East and South Asia.  There are policies beyond those toward Israel that harm our interests.

The endorsement and participation in U.S. military acts of aggression form the basis of the problematic policies.

How about a new doctrine to improve U.S. standing everywhere?  The United States will engage all foreign governments constructively to assure benefits to our citizens and the citizens of the foreign country.  The U.S. will not initiate invasions or efforts to destabilize foreign countries.  The U.S. military will protect the citizens of this country but never use its military force to further the financial or other special interests of any individual or group.

That would enhance U.S. standing beyond words and repair the decades of government and private meddling overseas.

As for the current controversy, it should just be ignored or condemned.  Petraeus isn’t the first military leader to advance a purely political position.  The White House wasn’t hit “like a bombshell” with the Petraeus comments about Israel.  And why was Vice President Biden surprised by new Israeli settlements?  That’s been going on for decades.

It’s all just theatrics to distract us from the fundamental problem with U.S. foreign policy.  Military and diplomatic efforts have been used throughout U.S. history  to advance interests of those other than the vast majority of citizens, often times at the expense of those citizens.  They benefit, we pay.

The public is angry. Why should the public pay for the bankers mistakes.

– Iceland blogger Halldor Sigurdsson

Who cleans up the mess when ignorant, greedy bankers rack up massive debt then go broke? The people of Iceland made a strong statement Saturday. The sins of big bankers and government regulators shouldn’t fall on the citizens. By a 93% to 2% margin, they voted down a proposal requiring them to cover bad debt incurred by one of the nation’s oldest and largest banks. Covering the debt would have cost Iceland’s 317,000 citizens around $17,000 each.

Iceland’s national referendum was the first opportunity for the people of any nation to vote directly on who pays when the financial elite fail.

As citizens voted, Iceland’s Prime Minister was dismissing the importance of the vote and promising to negotiate a payment scheme obligating citizen subsidies for bad debt created by Iceland’s beyond-bad bankers.

Icelanders are struggling with a collapsed economy. Businesses are failing at a startling rate, unemployment is soaring, and the prospects for the future are simply not there. Yet the British and Dutch governments demand that their swindled citizens receive compensation from beleaguered Icelanders. Where were the British and Dutch central banks and politicians while their citizens were being fleeced? Aren’t the rulers of these countries aware that the failed Icelandic bank was owned by wealth investors, not the citizens?

Iceland’s size and the very dire circumstances offer a focused preview for citizens around the world. The banks make bad deal after bad deal. When they’re about to fail, the government steps in with a taxpayer bailout. It doesn’t matter which faction of the narrow political spectrum is in charge. The message is starkly clear — when the banks fail, you pay. The solution is presented to citizens as a fait accompli, a mandatory submission to indefinite financial slavery for the benefit of the failed financial elite. The will of the people doesn’t matter even when there’s a direct vote.

The failed financial enterprises that control global commerce are opening their new show on the road in Iceland. Greek citizens are next in line for indentured servitude, thanks to their lying leaders and Wall Street’s Goldman Sachs.

Citizens in the United States remain overwhelmingly opposed to bailouts for Wall Street and big banks. Like Iceland’s Prime Minister, members of Congress and the president don’t care. Big banks have now received at least $12 trillion in credit and cash from the US Treasury and Federal Reserve Bank. The 17 million citizens out of work, their families, and the eight million forced to work reduced hours are barely mentioned and get just a pittance compared to the ultra wealthy bankers.

How did the financial elite and their political minions do it in Iceland? The lesson is instructive.

Tiny Iceland‘s Bankers Fool British and Dutch Regulators

Iceland’s second largest bank wanted some new customers. In 2006, the bank created the Icesave banking service. For the British market, Icesave pushed high fixed interest rates and easy access to online banking. The Netherlands sales pitch was based on banking transparency, seeing how the bank functioned online, with a 5% interest rate on deposits.

British regulators voiced no major problem with Icesave’s policies until the bank collapsed in October 2008. The Netherlands central bank (just now in a liquidity crisis) gave its stamp of approval to Icesave even though there were substantial warning signs that the bank was in trouble.

By the time Icesave was insolvent, its 300,000 British depositors and over 100,000 in the Netherlands saw their money vanish. The finger pointing began. The Dutch central bank claimed Iceland’s regulators lied to them. British regulators were shocked at the disarray of Iceland’s banking system.

Dutch and British regulators failed to mention that they’d outsourced regulation for their citizens to tiny Iceland’s central bank. These financially savvy nations couldn’t be bothered with their own people until the Icesave scheme did its damage.

Dutch and British political leaders somehow forgot to mention that Sweden and Norway insured the deposits of their citizens when another Icelandic bank failed in those countries.

Icelanders Stuck with the Bill

Icesave’s failed business tactics, negligent regulation by Iceland’s government, and indifferent British and Dutch authorities created the problem. But citizens are taking the fall. The usual suspect, the International Monetary Fund (IMF), offered up billions in cash in return for covering the lost deposits for British and Dutch citizens. IMF backed off of this position as it became clear that Icelanders would reject the March 6 referendum.

Ultimately, the financial machinations by international bankers and G-20 leaders don’t matter. The people of Iceland are in no position to pay the bill. Pretending otherwise only prolongs the charade of some order for the comatose global financial system. Who benefits? The financial elite who continue to accumulate more and more money as though it’s actually worth something.

Furious Citizens – Bloggers Won’t Give Up

Icelanders take their voting seriously. Turnout is usually above 80%. But the turnout for this referendum was 57%, the lowest figure in years.

The very good news is that Icelanders are providing real analysis and hitting the streets on a regular basis to protest the big con pulled by their leaders and financial elite. This is a sample of the vibrant dialog of the people who choose to fight back.

Independent Icelandic News – The Icesave Fraud Case

"The public was deliberately lied to and the deception was complete. The banks fell, the Brits and Dutch, and Germans too are pissed off and we Icelanders have to loose our savings, our homes, our jobs, our dignity. We also have to pay for the Germans, the Dutch and the Brits.

"We are only starting to ‘feel the cold dead hand of the neoconservatist financial free market monster’ that tore through the world and is still squeezing the Icelandic nation, even after its death. We don’t get a recession, we get a complete collapse." June 23, 2009

*****

Economic Disaster Area – Arrogant, Humiliating, Short Sighted, and Stupid

"Right now the nation is numb. Everyone is waiting for something while trying to stay afloat. Businesses and individuals who have been watching their cash fly out the window atop exorbitant interest rates for years are experiencing a drowning feeling. It seems like many are just shutting their eyes and resigning their fate to fate itself while still waiting for rescue to appear somewhere on the horizon.

"Most people agree that something must be done. They just cannot agree on what exactly." @ Dadi, May 24

*****

The Iceland Weather Report – Johanna (Iceland’s Prime Minister) sends a clear message

"As if the government wasn’t in enough trouble with public opinion here at home, Prime Minister Johanna Sigurðardóttir has publicly announced that she plans to shun the referendum tomorrow.

‘To me it is pointless and I find it is very sad that the first referendum since the founding of the republic revolves around legislation that is already obsolete. Consequently I see no point in taking part in this referendum,’ (said Iceland’s Prime Minister). alda March 5, 2010

*****

Iceland Banking Crisis News and More

"According to numbers, 1.5 % percent have said yes to the agreement to pay Icesave, but 93.6 say not to that. But this does not change anything. The Prime minister and finance minister say that there is a new deal on the table. Iceland’s President says that a Referendum makes the democracy stronger. The outcome of the referendum does not have any affect on the government in Iceland." Halldor Sigurdsson, Mar 7

*****

Economic Disaster Area – National Referendum – A Sad Day for Democracy in Iceland

"Tomorrow is the first national referendum Icelandic citizens have been allowed to participate in by the political elite since the conception of the republic in 1944. By all measures, this should be a happy day for democracy in Iceland.

"But instead it is not a cause for celebration but a large milestone in the farcical power play which has taken place between the four largest political movements in Iceland since 1944.

"Yes, a farce.’Isn‘t that what this whole thing really is’, asked a Dutch journalist yesterday after surveying the scene? It is a sad day.’ March 5 @ Dadi

But the biggest outrage is what’s happened in public.

We Made Goldman Sachs what it is Today

If it weren’t for our tax dollars and the cash flow that citizens provide for the United States Treasury, Goldman Sachs would have joined Bear Sterns and Lehman Brothers in the graveyard of financial high flyers.
But they were saved. Bush Secretary of the Treasury Henry Paulson came to the rescue when he assured that one of Goldman Sachs most important customers, the AIG group, survived a financial mess of its own creation.

Our original contribution was in the $20 billion range but then our elected representatives helped Goldman even more when they jacked up the subsidy to $85 billion. That’s enough money to hire a workforce of one million people at a salary of $60,000 a year, plus benefits.

Had AIG tanked, Goldman would have been in very serious trouble. In September 2008, Paulson, a former CEO of Goldman met with Tim Geithner, soon to be President Obama’s Secretary of the Treasury, when Geithner headed up the New York Federal Reserve Bank. Goldman’s CEO was “the only Wall Street chief executive” at the critical meeting.

This back room meeting was exposed by Gretchen Morgenson in an outstanding New York Times article: “Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner … A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.”

While Lehman Brothers got nothing, AIG got some serious cash and survived, thus assuring Goldman’s survival. Secretary Paulson and Geithner came through with the guarantees. When Paulson left with Bush, Geithner showed up to take Paulson’s place at Treasury. The beat goes on.

It’s The Money Party at work. They have no permanent friends or permanent enemies, just permanent interests. Goldman’s interest was turning a sow’s ear, the financial collapse that they helped create, into a silk purse. Mission accomplished.

Goldman’s chief financial officer attributed the $39 million a day income to the firm’s reputation for “very, very strong culture of risk management.” Is he kidding? Their success is based on that $85 billion of our money that saved their asses. Goldman’s average $1.0 million per employee bonuses wouldn’t exist were it not for citizens paying for their survival.

Have you received your thank you card from Goldman Sachs yet?
Don’t hold your breath. But you can be sure that when they’ve screwed up what people are trying to pass off as a recovery, they’ll be back at our Treasury Department again for the next big bailout courtesy of you know who.

We have no government left. It’s simply a welfare agency for the most favored failed financial giants; a paper money producer to wrap the ugly truth in fictional dollars; a subprime governance scheme developing Potemkin Villages everywhere.

It’s socialism for the ultra rich and survival of the fittest for the rest of us.

Millions get sick, suffer and die without medical coverage. But Goldman bags $39 million a day in the Wall Street casino. Millions of hardworking citizens lose their jobs and can’t find work. But Goldman gives out bonuses averaging $1.0 million per employee. Their survival is based entirely on our assistance but when citizens need some help, there’s no room at the inn.

And count on it, nobody in power will do a single thing about it. Not one thing.

Fairness, equity, civility, good taste, discretion, opportunity, even the least degree of common decency — all dead — thanks to The Money Party.

The public knows which party bears the primary blame for all of this and they’re not about to forget any time soon. The Republican Party is headed for the political graveyard.

They’re not going to rely on past achievements though. Through their self-proclaimed national leader, the odious Rush Limbaugh, they’ve chosen to attack the first Latino nominee to the Supreme Court, Judge Sonia Sotomayor, for being a “racist.” Former Oxycontin addict Limbaugh said, “She brings a form of bigotry and racism to the court.” He went on to say that nominating her was like nominating Klansman and Aryan Nation advocate David Duke for the highest court.

These charges are quite literally bizarre, particularly with Limbaugh calling anyone else a racist. Newt Gingrich has joined Limbaugh in a duet of stupidity. This is appropriate since Gingrich is the architect of the power and policies used by Republicans to drive the nation into its current crisis.

The political impact for Republicans will be devastating. Sotomayor is the first Latino nominated to the Supreme Court. Latinos represent the fastest growing ethnic group in the United States.

They’re the fastest group ever to assimilate to U.S. culture and achieve middle class status. Latinos went for Obama 67% to McCain’s 33%, and comprised 9% of the electorate in 2008. Among Latino youth, the fastest growing segment of the Latino population, the choice was 76% Obama compared to 19% McCain.

Sotomayor is also a woman nominee. Women comprised 53% of the electorate in 2008 and they went for Obama 56% to 43% for McCain. Many of those women are working and struggle with fools like Rush Limbaugh and Newt Gingrich on a regular basis.

The Republicans are like an early adolescent frenetically trying on new identities, each seemingly stranger than the last. Led by the Southern wing, the party began by opposing the bailout for the big three U.S. automakers. Acting as though the nation doesn’t need any heavy industry or a few million people don’t need a job, their mask of fiscal rigor hid the fact that key southern states have the manufacturing base for major foreign automakers.

They then turned to Rush and, at the same time, held a national protest in April. Sparsely attended, this nationwide event acquired the unfortunate name of “Tea bagging.” It failed to produce anything more than some Jerry Springer quality footage for a brief spot on local news. Recently, the national Republican Party, backed by early presidential aspirant Gingrich, tried to rename the Democrats as the “Democratic Socialist Party.” There is no end in sight to this parade of irrelevant, out of touch efforts.

We’re now seeing the final phases of the Republican dance macabre. The Limbaugh-Gingrich anti-Latino campaign is so dangerous that some Republican senators, including right wing Sen. John Cornyn (R-TX), are moving away from the slanders against Sotomayor. John McCain (R-AZ) also sees the implications for his party. He’s signed up to attend the National Council of La Raza conference this summer to counter the anti Latino rhetoric spread by other Republican leaders.

Democratic loyalists are acting as though the Republican demise is an accomplishment on their part. It is as though their understated — but very complicit — support of the Republican policies of empire and wealth transfer to the ultra wealthy will go unnoticed.

Congressional Democrats voted in the majority to authorize the Iraq invasion. They voted in the majority to fund the Iraq adventure long after the lies leading to war were well known. A majority of Senate Democrats voted for the Patriot Act. A Democratic controlled Senate allowed further government spying on personal communication (FISA Amendments) in 2008 and a third of Senate Democrats supported the Military Commissions Act of 2006, which gutted habeas corpus, and Democrats voted for the initial Wall Street welfare bill; also know as the bailout.

Right now, the Obama administration is responsible for doubling the Bush administrations cash transfer form the U.S. Treasury to Wall Street and the banks. Democrats failed to pass the only major bill to ease rampant foreclosures. This left 1.7 million families likely to lose their homes. Democrats did pass a credit card reform bill but forgot to cap those 29% interest limits that the banks arbitrarily assign.

There was an announced policy to leave Iraq. To date, all we’ve seen are plans to open up a new phase of the Afghan war with tens of thousands of troops simply switching job assignments from Iraq to an even more treacherous landscape. Ominously, we now have plans for super embassy in Pakistan to rival the fortress constructed in Iraq.

Democrats don’t want people to see pictures of Bush-Cheney torture from the prison at Guantanamo, probably because it occurred with funding that they helped provide. They don’t want to close that facility if it means housing prisoners in the United States. This forced their president into the extraordinary and troubling position of maintaining current prisoners in Cuba. As the Democratic Senators participated in the 90 to 6 vote to refuse President Obama funds to close Guantanamo, they were resolute in failing to mention that only 10 of over 400 prisoners there are charged with a violent crime. To borrow an appropriate response, You’ve done enough. Have you no sense of decency, at long last? Apparently not.

Democrats won’t even talk about the deaths of over a million Iraqi civilians due to civil strife caused by the war that they funded. Failing to talk about it means it never happened, they hope.

Despite all of the alleged but obvious crimes of Bush-Cheney against people here and around the world, the Democrats want to “look forward” and bypass prosecutions of any sort against the Bush administration.

The Binary Fallacy

The binary fallacy is the crude dialectic that assumes that the two political parties are the only choices for voters and that what’s bad for one party will always be good for the other. As evidence for this, we have Nixon’s Watergate scandal followed by huge Democratic victories in congressional elections. President Carter’s economically distressed four years begat the Reagan revolution and so forth.

Democrat Party operatives see the collapse of the nation and attendant pain as working against the Republicans since they were in control when the decline was assured by Republican sponsored programs. The situation is so bad, they argue, no one will take the Republicans seriously over the near and midterm. Add the highly favorable demographics among youth, women, and the emerging Latino population and you’ve got the dominant political party of the next few decades.

Republican loyalists speak of the risks that the Obama administration has inherited. When he falters, as he may given the circumstances that Republicans know all too well, his failure will assure a Republican comeback they argue.

Both parties fail to realize two flaws in their embedded fallacy.

First, the fallacy became a manufactured truth over decades due to the rigged game of U.S. politics. Funding and access to major media presume membership in one of the two major parties. Third party candidates need to poll equal or ahead in the public opinion polls, as Ross Perot did in 1992, in order to get any media attention or money. When the system is heavily rigged to exclude third parties, then, of course, there are only two choices.

The second flaw in the binary fallacy is embodied by our current troubles. The fallacy does not take into account successful performance during extreme crises. We’re either in a depression or we’re in the most severe financial crisis since the Great Depression. Times are desperate for tens of millions. The vast majority lives in fear of entering the world of the unemployed, homeless, and bereft. Iraq is the biggest foreign policy disaster in modern times. Our new plans for an Afghanistan adventure have the potential to equal Iraq in terms of national loss and increased threats of blowback.

One party created the current disaster. The other has embraced the broadest parameters of the policies that created the disasters that voters want fixed — wealth transfers to the ultra rich while the vast majority gets just about nothing plus mindless, counter productive fantasies of empire through war.

The two parties and the elitists who look down their noses on the overwhelming majority of citizens assume that the people will simply tolerate the creation of a catastrophe by one party and the perpetuation of that grave injustice to citizens by the other.

When you’re broke, you know it.

When you’re out of work, you know it.

When there are no jobs, you know it.

And when the country continues to fight overseas but does nothing to protect economic security at home, you know it.

The game is up. The party is over. The people have a fundamental right to survive, at the very least. If both parties continue to promote policies that leave out almost all citizens, as is now the case, there will be alternatives that look nothing like the current two political parties. The binary fallacy and the two parties that fail to address our crises will be no more. Relying solely on the failures of the opposing party while embracing their programs will soon be defunct.

The denial of assistance to citizens by Senators is ironic given the fact that the origins of the current economic crisis came from Senate legislative actions in 1999 and 2000.

While their avarice knows no bounds, their memory suffers.

Apparently these multimillionaire aristocrats of the Senate “gentlemen’s club” haven’t been watching the news. The International Monetary Fund declared that the United States is in a depression almost three months ago. Delinquency and foreclosure rates around the country are rising at spectacular rates. Unemployment has jumped by 3.3 million in the last five months. Economic growth has declined at a rate of 6.3% in the first quarter of 2009.

What part of economic crisis can’t they understand? Apparently all of it.

Memo to stingy Senators: Workers and their families are in serious trouble or about to be in trouble. That means they lack the money to pay for their homes (also known as shelter, a basic human need). These citizens did nothing to bring on this crisis.

You, the members of the Senate, are largely to blame and you know it.

One of the most revealing remarks came from Democrat Ben Nelson (D-NE) who said:

“Do I want to have my rate go up so that somebody else might be able to cram down” their mortgage payment?” asked Sen. Ben Nelson, D-Neb., who voted against the bill.

Nelson has never been regarded as the sharpest tool in the shed but he’s set a new standard for ignorance with this remark. Nelson was worth at least $7.0 million as of reporting in 2008. Obviously he needs to skimp on every penny to stay afloat. He’ll offer no breaks for financially strapped citizens on the brink of ruin even if they are in trouble as a result of his support of Wall Street welfare. The bill would have no impact on his or anybody else’s mortgage rate unless they qualified for help. In those cases, the rate would go down.

The Durbin bill offered a reasonable change in bankruptcy law that would allow those in foreclosure to ask (simply ask) bankruptcy judges to invoke a “cramdown.” In that process, the bankruptcy court would set a lower interest rates and longer terms on loans. This takes the case out of foreclosure and allows citizens to keep their homes and the lets banks collect the money owed at a lower rate over an extended period. (See this for a real cramdown to benefit all citizens.)

The Durbin bill provided limited options since it presumed that homeowners at risk had the money to get in bankruptcy court; that the courts would be able to handle all those in need; and that the judge would accept the request for a cramdown to keep people in their homes. But the bill might have helped as many as 1.7 million homeowners.

Even with those limitations, Sen. Durbin was forced against the wall and had to negotiate the bill to a lower level of protection. The final bill rejected by the Senate. Associated Press reported: “The latest proposal would have restricted eligibility to homeowners already in foreclosure whose lender had not offered better terms. Homes would also have to be worth less than $729,000 and apply to mortgage loans originated before 2009.”

Durbin’s last stand would have provided protection some homeowners but know there’s now protection for anyone.

William K. Black is the chief fraud investigator who untangled the 1980′s Savings and Loan fiasco. His comments on the current economic meltdown are instructive and assign blame:

“We need some chairmen or chairwomen … in Congress, to hold the necessary hearings (on banking fraud) and we can blast this out. But if you leave the failed CEOs in place, it isn’t just that they’re terrible business people, though they are. It isn’t just that they lack integrity, though they do. Because they were engaged in these frauds … they’re not going to disclose the truth about the assets.”

Senators, you allowed changes in banking regulations that turned Wall Street in to a big casino for the “in crowd” and wiped out millions of small investors and retirement funds.

You failed to monitor the new freedoms you gave the banks and Wall Street after you stripped away citizen protections in law since the Great Depression.

You created the current depression.

And now, you’re so stingy you won’t even help a few of the many people victimized by the massive corporate fraud schemes, Ponzi schemes according to Black.

Is there any reason why even one single Senator of the 51 who voted down this assistance should remain in office to complete his or her term?

Is there any reason to hold back from recalling them where allowed or demanding their resignations in every state that they represent?

I can’t think of one. Can you?

Here’s what we can expect:

Surely habeas corpus will be restored in an unashamed expression of support for that centuries old protection of civil liberties.

No doubt, we’ll see a repeal of the Patriot Act. That step back to some degree of civilization is sure to come.

There will be a long overdue recognition that the first people in line for help from the government are the citizens of this great country who work overtime to just keep their heads above water.

That will happen at the same time that trillions in Wall Street welfare are stopped and replaced by actions that allow people to stay in their homes, pay for their health care, and send their children to college. No doubt about it.

We won’t be forced into mindless wars that obligate us to more deaths and the inevitable blowback from overseas adventures. Let the word go forth from Washington. The troops are coming home.

The Glass-Steagall Act will be restored and the Commodity Futures Modernization Act of 2000 will be repealed ending the enabling acts for an era of greed.

No more talk about having too many “big picture” items on the agenda to allow working men and women to organize and fight for their rights in unions.

We’ll surely mount a massive program to save us all from the looming eco catastrophes due to climate change and pollution.

Elections will be transparent, open to all, and subject to public review and verification.

We will no longer countenance wire tapping, Internet snooping, and other forms of illegal surveillance by the government.

Don Siegelman’s conviction will be overturned while Susan Lindauer and all the other victims of Bush fascism will receive apologies for the vicious government harassment visited on them.

All it takes is Arlen on board and Al ready to hop the freedom train to the promised land of a government that serves the people and public servants that know the meaning of the word servant.

There can be no doubt that those who have erred and sinned against the people will be reborn into a new life as representatives of the nation that they serve. They will cast away their Money Party sympathies and hop on board.

Senators Blanche Lincoln (D-AR) and Mark Pryor (D-AR) will start voting for the working people that they represent. The 21 FISA supporting Democratic senators will take the time to read the Constitution and change their ways. The Senate Committee on Finance headed by Sen. Max Baucus (D-MT) will actually investigate that $140 billion gift to banks allowed by the likely illegal Bush White House authored tax code changes. The Nelsons, Ben and Bill, along with 16 other Democratic senators will repent for their vote on that horrid bankruptcy bill.

And all of them will join in unison and say no more funding for illegal wars.

Happy days are here again. Pop the cork!

Our financial system looks ruined beyond repair. The credit default swaps crisis is 40 or so times bigger than the real estate meltdown over subprime derivatives. The top 25 banks in the United States are loaded down with $13 trillion in credit default swaps and the deal is coming unraveled. If we accept the highly dubious assumption that the debt from the financial meltdown needs to be repaid by us, were looking at $43,000 a citizen right now. And we’re just starting.

It didn’t get that way by accident. There was special legislation that enabled the current crisis.

This was classic Money Party strategy and tactics.

The strategic goal was to turn Wall Street into a big casino for the “in crowd” of major investors, funds, and institutions. No rules and no regulations: “let the market take care of it” was the philosophy.

The tactics were easy. First you set up a scholarly group called the Law and Economics movement to give your scheme legitimacy. Then you give money and other favors to members of Congress.

At the right moment, you call in your congressional markers to let the banks start doing what they did to spark the Great Depression. Walk into the Wall Street casino loaded with cash and spend like they’re on coke. Your corny academic group has a couple of judges who decide a case that gives legal grace to the scheme. The casino is legit says the court. You then go for the whole nine yards by bringing back the long outlawed derivatives, subprimes, credit default swaps, etc.

The corporate media either ignores your “long con” altogether or covers it on their back pages.

Done deal! It’s the perfect storm to create economic chaos allowing the most massive transfer of wealth since the Visigoths sacked Rome in 410 CE. It’s all about socialism for the rich and survival of the fittest for the rest of us.

But Congress and the Treasury Department will preserve the financial elite in perpetuity. Why? To begin with, they’d have to admit that they created the problem in the first place with their enabling legislation. Congress would also have to admit to absolutely zero oversight on this matter despite warnings.

Legislative, Judicial and Executive Branches — Acting in Unison Deliver the Goods

Three distinct events enabled the current economic chaos. The baseline requirement for the era of greed was satisfied in 1999 when Congress repealed key provisions of the Glass-Steagall act. That law was established during the first Great Depression. It tightly restricted the opportunities for reckless speculation by banks. They were barred from selling stocks and other speculative schemes. Title 1 of the Financial Services Modernization Act, 1999 says it all:

Facilitating affiliation among banks, securities firms and insurance companies

Commercial banks, brokerage firms, hedge funds, institutional investors, pension funds and insurance companies can freely invest in each others businesses as well as fully integrate their financial operations.

This was a bipartisan effort with the Senate version passing 90 to 8 and the House 362 to 57.

The once scorned derivatives had been the Holy Grail for “free” market radicals on Wall Street and elsewhere for years. They said that the restrictions on these products were unnecessary and stifled the free market (“free” for them). Even before Congress acted definitively in December 2000, the U.S. Court of Appeals for the 7th Circuit struck down the ability of the Securities and Exchange Commission (SEC) to rein in ruinous high risk financial schemes on Sept. 1, 1999.

Reagan appointees Richard Posner, then chief judge, and current chief judge Richard Easterbrook were key movers. They’re also heavily involved with the Law and Economics movement, a right wing, free market movement that opposes almost all regulation in Pavlovian fashion.

Credit default swaps and other derivatives had been illegal for decades. In 1981, specific rules were set up to tighten restrictions against these schemes. But all that changed on Dec. 21, 2000 when the lame duck Congress passed the “Commodity Futures Modernization Act of 2000′” making these products legal. The legislation also barred the gathering of information that would serve as early warning on the legalized gambling on credit worthiness. Regulators were helpless in looking out for the public. Here’s the title of the House version of the bill:

To reauthorize and amend the Commodity Exchange Act to promote legal certainty, enhance competition, and reduce systemic risk in markets for futures and over-the counter derivatives, and for other purposes.

This is the vital wording modifying the Securities Act of 1933 that undid the economy:

“Section 2A–Swap Agreements The Commission is prohibited from — promulgating, interpreting, or enforcing rules; or issuing orders of general applicability.” The Senate and House bills were combined in to H.R. 4577, an appropriations bill for the Departments of Labor, Health and Human Services, and Education signed by President Clinton. Someone had a perverse sense of humor.

In other words, Congress legalized what had been illegal for decades and it secured the 7th Circuit’s opening gambit of handcuffing the SEC in dealing with the new high risk financial products. Congress fixed the game so that the short staffed regulatory agencies couldn’t monitor the market even if they wanted that function.

Good luck trying to find the legislative debate on this momentous change. There was none. The enabling legislation for this disaster was passed by an overwhelming majority in the House of Representatives and by unanimous consent in the Senate.

It’s important to have a “Roll Call” for the sponsors of the “Commodity Futures Modernization Act of 2000.” They made it happen.

Expect More of the Same

The bailout and other efforts to save Wall Street firms and the large banks are essentially an effort to deal with the problems of derivatives and other market failures. Wall Street got the court decisions and legislation it wanted and then promptly proceeded to create today’s disaster.

They sold these risky products and now they have to pay off. But they don’t have the money even with the current bailouts. Where will they get it? The federal government was the only sucker left to tap and that bet came through to the tune of $4.6 trillion. There’s $4.6 trillion awaiting further requests from the Federal Reserve

The culprits are still in place at failing financial institutions.

Don’t hold your breath waiting for political action to fix the situation. Both parties were in on this mess. Huge majorities in both houses of Congress voted for key legislation to allow the biggest bank heist of all time. But his time, it was the banks pulling the heist.

That’s why the bankers have to stay in place. To remove them, would be telling, as William K. Black said recently:

But the other element of your question is we don’t want to change the bankers, because if we do, if we put honest people in, who didn’t cause the problem, their first job would be to find the scope of the problem. And that would destroy the cover up.

But it was all legal, wasn’t it?

He has the help of a citizens group called ABA Publishing headed by Arminda and Bob Alexander with Jude Morford. The all-volunteer group recently sent Bugliosi’s cover letter and book to 2,200 local prosecutors across the country.

Bugliosi is offended by the prominence of proposed torture charges to the exclusion of what he argues is the much larger charge: murder.

Prof. Jonathan Turley of the George Washington University School of Law was asked what charges were the most likely if there’s ever a serious investigation into Bush administration criminal activities. Turley noted:

“The two most obvious crimes in this administration are the torture program and the unlawful surveillance program. Despite the effort to pretend that there is some ambiguity or uncertainty on these crimes, the law is quite clear.” (Blog of Legal Times, Dec. 23, 2008)

Torture and illegal wiretapping are important concerns to Bugliosi.

But murder is by far the larger crime with a much stronger case, Bugliosi argues.

The former top prosecutor demands justice for the deaths of 4,200 U.S. citizens, soldiers who gave their lives in a war based on calculated lies by the Bush administration. Their loss is the basis for his murder charge. While Bugliosi couldn’t find a way to attach the 1.2 million dead Iraqi civilians to the indictment, those deaths are part of the larger record of Bush crimes Bugliosi stated with passion.

I interviewed Vincent Bugliosi about his book, The Prosecution of George W. Bush for Murder in August 2008. He outlined his case in detail and the challenges he’d faced in getting the word out after the corporate media blacked out advertising and interviews on his groundbreaking book.

Recently, I contacted Mr. Bugliosi to explore his reaction to President Obama’s position on prosecuting Bush and others members of the regime and his opinion of the focus on a Bush prosecution for torture instead of the much more serious murder indictment.

Interview with Vincent Bugliosi
Conducted by Michael Collins
March 29, 2009

Michael Collins: Do you think that President Obama is reluctant to investigate and, presuming the findings we’d expect, prosecute Bush and others in his administration for their alleged crimes.

Vincent Bugliosi: President Obama was on the ABC news program This Week With George Stephanopoulos, and the issue came up about the prosecutions of the Bush administration, potential prosecutions, and he said words — I can give you his exact words. He said that he was of “a belief that we need to look forward as opposed to looking backwards.” (ABC News, Jan. 11, 2009) Now, the interpretation that has been placed on these words, and I agree with that interpretation, is that he does not intend to pursue George Bush or his administration for any crimes they may have committed.

This is in contradistinction to what he said months ago before he became president. He said words to the effect that if he became president, he would have his attorney general investigate the Bush administration to see if things that they had done involved crimes or just merely bad policy. He said if they involved crimes, he said no man is above the law, and the implication was that he would ask his attorney general to proceed forward, so he’s changed his position.

I was mentioning the interpretation on his words. The article in The New York Times that quoted him: “President-elect Barack Obama signaled in an interview broadcast Sunday that he was unlikely to authorize a broad inquiry into Bush administration programs like domestic eavesdropping or the treatment of terrorism suspects.” (New York Times, Jan. 12, 2009)

I have to say that I’m disappointed in the president on his apparent position that he doesn’t want the Department of Justice to conduct a criminal investigation.

MC: What would you say to the president if you had the opportunity?

VB: If I were to speak to President Obama, I would inform him of one thing and advise him of a couple of other things. I’d inform him, and I guess this sounds a little sarcastic, but I would inform him that when he talks about only looking forward and not backwards, I agree that most of his efforts have to be towards the future. I’m not quarreling with him on that, but you can’t forget the past.

When he says that he intends to give Bush a free pass simply because whatever crime Bush may have committed was in the past, I would inform him of something he already knows: that all criminal prosecutions, without exception and by definition, have to deal, obviously, with past criminal behavior. Obviously we cannot prosecute someone for a crime that they may commit in the future.

And if we prosecute for even petty theft in America, what do we do with Bush, who I’m very convinced took this nation to war under false pretenses and has caused incalculable death, horror, and suffering?

I would advise him of two things, kind of using his words against him. If indeed Obama’s sole emphasis seems to be the future, I don’t think anything could improve our image around the world more, restore our credibility more than prosecuting George Bush for his monumental crimes. We would be telling the world’s people that what George Bush did in taking this nation to war on a lie against a sovereign nation like Iraq, without any provocation whatsoever, was not the real America. That was only George Bush’s America. The real America would never do something like that. And then in the real America, no man is so high he is above the law, and even presidents have to be accountable for their crimes. So talking about the future, using President Obama’s own emphasis, I think it would be very advisable to bring Bush to justice if, in fact, he’s guilty, as I say he is.

Talking about the future, if we want to deter future presidents from taking this nation to another war under false pretenses, some president in the future that gets a funny thought, I think that deterrence would increase immeasurably if he knew what America did to George Bush, put him on trial for murder, and if he was convicted, of course, the punishment would either be life imprisonment or the imposition of the death penalty.

I gave you a long answer to the question, but I had always suspected that if there was going to be a prosecution in this place, it would be at the local level. The ideal venue is, in fact, the Department of Justice.

MC: Ultimately, isn’t it the responsibility of the attorney general to determine the crimes that are investigated and what aren’t? For example, if Obama called up Holder and said, “Lay off any prosecutions against the Bush crew,” Holder may take that advice or he may not. But wouldn’t he have to ignore the request?

VB: Well, there’s no question that independent of Obama, Holder has the authority to bring criminal charges against Bush, no question about it. There’s also no question that each of the 93 U.S. attorneys around the country have the power and the authority to do so, but let’s jump from there to reality. The reality is if there’s some U.S. attorney in Chicago that wants to do it, it’s possible, but he’s not going to do it without checking with his boss. You don’t take on the biggest most important murder case in American history without letting your boss know about it, you know — that is, not if you want to remain a U.S. attorney; and likewise with Holder. He has the authority and he has the power to completely ignore Obama, but the reality is what do you do? If Obama indicated that he was opposed to it, it would take quite a man to overrule the president.

MC: Where does that leave the cause of justice for those who died?

Since Obama’s not going to do anything and the International Criminal Court has no jurisdiction, the reality is that the only game in town is what took place several weeks ago up in Seattle when Bob Alexander, just a regular citizen, but an American patriot, sent out with volunteers, copies of my book, The Prosecution of George Bush for Murder, to DAs all over the country, with a cover letter from me, asking the DAs to read the book, and, if they agreed that the evidence of guilt was clear and that there’s jurisdiction to proceed against him, I offered to help out in any way that I could, any way that they deemed — any way that they wanted me to, which would range all the way from being a consultant up to and including being appointed as special prosecutor.

MC: I’ve followed Professor Jonathon Turley of George Washington University, and he’s come out and said there are two clear crimes to prosecute Bush for. One is torture, which Bush has essentially admitted, and the other is under the statutes against illegal surveillance. I’m trying to understand why Turley doesn’t — and I don’t know if you’ve talked to him or not –

VB: No, no.

MC: I’m trying to understand where the murder charge is.

VB: I told you that I was disappointed with Obama. I have to take it a step further and say I am offended. I am offended by this movement by those who want to get, quote, even with Bush to just talk about torture. I find it very offensive. And I’ll tell you why. I’m not saying that Bush and his people should not be prosecuted for torture, but I want to get into that in depth in a while. But it should only be at most a footnote to going after him for murder. It should only be a footnote.

The New York Times said in an editorial a month and a half or so ago that there were two dozen verifiable cases of torture at Abu Ghraib. Let’s assume that that number is very conservative, very conservative. Let’s say there’s 100 cases; let’s say there’s 200 cases of torture that can be verified.

How do you compare 200 cases of torturing Iraqis with the unlawful death, if what I say is correct, of one million Iraqis and 4,200 American soldiers? How do you compare these two? Again, is there something that I don’t know? Is there something that I have to be told? How do you compare the two?

They can’t be compared, obviously, and yet all I hear is torture, torture, torture, torture, and I’m offended by that, not because I’m not saying that Bush shouldn’t be prosecuted for torture, but because what’s wrong with these people? To give Bush a free pass on taking this nation to war on a lie. The majority of American people believe that Bush took this nation to war on a lie, and I can’t tell you the number of times there’s been TV and radio shows and articles about the lies of the Bush administration in taking this nation to war. Now all of a sudden they want to forget all about that, these people, and just talk about torture, torture, torture, torture.

There was a cover story in, I think it was Harper’s Magazine about two months ago, about prosecuting Bush. Obviously, I bought the magazine, and I opened it up to the prosecution. What was it all about? Torture. The New York Times had a pro and con in the op-ed section about two months ago, pro prosecution to Bush, anti prosecution to Bush. So I looked at what the prosecution was about — torture. I’m offended by this.

Who’s fighting to bring about justice for the perhaps one million innocent Iraqi men, women, and children and babies in their graves? Actually, I shouldn’t say I’m going to bring about justice for them, or try to, because I was unable to establish jurisdiction to go after Bush for the deaths of the Iraqi citizens. I did establish jurisdiction to go after him for the deaths of the 4,200 American soldiers. In any event, it would be a symbolic effort to bring about justice for the million people in their graves. Let’s say that number’s high. In my book I say over 100,000. Certainly there’s over 100,000 innocent Iraqi men, women, children and babies who died as a result of Bush’s war. Some numbers put it in excess of one million, and we know there’s 4,200 American soldiers.

Who’s fighting to bring about justice for those in their graves, decomposing in their cold graves right now as I’m talking to you, Michael? Who’s doing that out there?

MC: Right.

VB: No one seems to be interested in that. It’s all torture, torture, torture, torture, so apparently torturing 24 or 200 Iraqi citizens or Iraqi insurgents or what have you is more important than bringing about justice, let’s say, for 4,200 American soldiers who died in Bush’s war. So you can see where I am offended about that.

I’m not saying that Bush should not be prosecuted for torture.

Let’s talk about why it’s even more offensive to me than I’ve already told you. I’ve given you the main reason why I’m offended by it, that that’s all they talk about, as opposed to saying let’s go after him for taking this nation to war under false pretenses, and then let’s also add a count to the indictment for torture. Do you follow?

MC: Yes I do. Where does torture fit into the larger picture?

VB: I’m not saying he shouldn’t be prosecuted if he’s guilty of torture. I just don’t think it should be all that people are talking about. But let’s take it to another level. Who are these people who were tortured? Well, I guess virtually all of them were insurgents. There never should have been a war in Iraq. Iraq — there were no terrorists in Iraq, and when you go to war, a war against terror, you go against the terrorists, and there were no terrorists in Iraq, but we’re acting on a set stage here, so in Bush’s — in the Bush administration’s mind, once they were in custody there, they viewed — the Bush administration viewed these insurgents as enemies. So that’s their state of mind. If these insurgents are enemies, why would the Bush administration be authorizing torture? Well, to coerce from them intelligence information that would be helpful to America?

MC: Right.

VB: Which does not eliminate the legal liability but diminishes the moral culpability.

But there was no justification whatsoever under the moon that was helpful to America in invading Iraq, nothing, zero, cipher. Hussein had nothing at all to do with 9/11. He was not an imminent threat to the security of this country. Bush and his people lied to convince the American people on both of those things, that he was an imminent threat and that he had been involved in 9/11. So that diminishes the torture thing even further.

The main guy we’ve got to go after, and there would be many named in the indictment, of course, many others, at least Rice and Cheney, of course, but I believe Rove; the main guy is George Bush. Why is he the main guy? Because he’s the one that authorized it. If he didn’t authorize it, none of these things would ever have happened. I don’t care who influenced him, if anyone at all. He said, yes, let’s do it.

MC: Since we last spoke, there have been more revelations on the outrages of the Iraq War, all a direct result of the lies Bush and Cheney used to sell the war.. How do those revelations build your case?

VB: While all of these revelations are very good, you have to know, Michael, they don’t mean anything at all unless we do something about it. The revelations by themselves, by definition, don’t go anywhere. And that’s why when people hear these revelations, you know, they’re prompted to ask, “What now? Where do we go from here?”

MC: Right.

VB: And, again, not boasting, it’s just a fact that The Prosecution of George Bush for Murder is the what now, where do we go from here book, the only book, out of the probably over 100 out there attacking Bush, that provides a legal blueprint for bringing George Bush to justice.

By all appearances, it also locks the country into years of a weak economy. That means unemployment, underemployment, and more suffering for those willing to work, but left out of the job market. It means lowered opportunities for those who do work and troubles for dependants and indigents. Vital national priorities including affordable health care and the massive effort required to save everyone form calamitous environmental catastrophes are now on hold or under funded.

We don’t have enough dollars. It was the banks versus the people and we just lost.

The theory is that without these payments, the banks will fail and we’ll all be in a world of trouble without them.

All of this depends on the questionable assumption that by saving the banks, we’re saving our economy.

To date, the government has given banks a total of $4.4 trillion dollars. That’s half of the accumulated debt for the federal government.

Citizens get the following from the recently passed $787 stimulus package: a voluntary program that allows banks to lower mortgage payments to help those with troubled loans; an extension of unemployment insurance beyond that provided by states; some innovative environmental programs; and, a much needed start on infrastructure repair. For those working and meeting their obligations, there little but a promise of rescue from calamity.

Here’s how the federal government and Federal Reserve Board have spent your money and obligated your debt.

Graph: The banks received $3.2 trillion through the Federal Reserve, a $700 billion bailout in October, 2008 and 2009 budget item for another $750 billion bailout. An unspecified number of citizens will benefit from the recently passed $787 billion stimulus bill.

All the failed banks had to do was wag their tails in unison and dollars flowed their way.

There has been debate on how to describe the current economic state: recession or depression. Reluctant to admit that we’re even in a recession, private banks, most U.S. economic gurus, and the federal government consistently uses the term recession.

If you’re living this experience right now in an area hard hit, you’ll be interested to know what the International Monetary Fund (IMF) had to say. On Apr. 9, 2008, the IMF warned of a danger that the U.S. recession could become a depression. Nine months later, this February, it noted that the “Advanced economies are already in a depression.”

The program to avert a prolonged depression consists of massive infusions of money into the private banks. The recipient banks are, of course, the very same institutions and executives who brought us this economic catastrophe.

So right now, citizens are holding the bag for the money given to the banks, while the banks have no obligation to tell anyone where a majority of this money went or even to repay it.

The banks were expected to take our money via the federal government and create credit opportunities for citizens, credit that would boost the economy. Instead, they took the money and created much tighter credit. As a result, the dollars needed to save citizens from the suffering caused by a depression are not available for that purpose.

Even though citizens will see no benefit in the bank welfare program, they are allowed to anticipate years of economic hardship in order to pay for it. We are currently held hostage by false assumptions about the supposedly inevitable decline of the economy and the suffering that must follow. The most damaging assumption is that the public has to bail out private banks for losses due to massive negligence (at least) leading to their insolvency.

We have become indentured servants working to prop up a comatose financial system and the banks that crated this crisis in the first place.

Does it have to be this way?

The United States has the most productive workforce in the world, thirteen of the top twenty research universities anywhere, and plentiful natural resources. We can feed our selves reasonably well, provide health care for everyone if we choose, and address educational needs when they are recognized. In addition, we’re located between two very friendly countries and populations. That constitutes real wealth.

The nation and people possess everything needed to address the current financial crisis except one seemingly vital element, dollars. We lack the dollars in both the private and public sector to support needed public initiatives and the requirements of business. Citizens also lack the dollars to spend on essentials and non essentials, a critical step in bring the economy back to some semblance of stability.

What are the banks doing with all those dollars they’ve received from us? First, they won’t tell us because they don’t have to for all but the most recent $750 billion gift. Second, they’re in no hurry to make those dollars available for productive purposes. It raises a legitimate question. Do the banks even have this money anymore?

The suffering awaiting the ongoing economic collapse is guaranteed as long as we have faith in the necessity of preserving the current financial system and the assumption that underlies it: we need to pay the debt for what they spent and lost.

Why should we?

We have businesses, small and large, which meet important needs and provide services that are of value. We have citizens and organizations that want to acquire those goods and services. Paying the debt for financial institutions and investors who will do again what they’ve already done.

A great national debate should begin on what replaces the system that failed so miserably and it needs to start with the masses of people who actually do the work that produce our nation’s true wealth.