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It was never about the debt ceiling

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It was never about the debt ceiling

What a time for my domain to become live again, just when Congress leaves town after finalizing a rise in the ‘debt ceiling.’

There will be several parts to this post.

First, to some of the more sweeping or superficial distortions and debt-ceiling politics:

  •  On balance, I think the Democrats in Congress, the White House, and the public came out better—given the situation–than has been indicated by some progressive outlets. Admittedly I am influenced by the fact that some of the most vitriolic ‘progressive’ voices against Dems and the WH are also corporate-allied. They do tend to get all rabble-rousing in the abstract, simultaneously resisting options to help improve the lot of working people (such as writers) themselves. They also tend not to be very effective, politically speaking. They also tend to have dismissed candidate Obama’s chance of winning early. So in a sense it is natural for them to lob attacks on the president, rather than fight 1) against the GOP corpo-party and 2) for working people. That aside, the final bill avoided default (more on default later); prohibited another debt-ceiling ruse for the next couple of years; and kept the GOP on the hook for its program cuts, government spending, and tax favoritism for the wealthy and corporations.
  • That last item is so significant that I have been a little surprised to see it so neglected in political commentary over the last few days. The lift on the debt ceiling was passed by Republicans in the House.
  • Let me repeat that: After all the hoopla about the Tea Party, a ‘rift’ or schism in the GOP, threats to John Boehner’s position as Speaker, etc., etc., the bill raising the debt ceiling was passed by Republicans in the House. The bill was supported by more Republicans than Democrats, with 174 Republicans voting to raise the debt ceiling and 95 Democrats. The bill was opposed by more Democrats than Republicans, with 95 Dems voting against it and only 66 GOPers.
  • Our political reporters have not highlighted this fact. While the final tally pretty much had to be reported, the party break-down is being spun so far as a revolt against the president in Democratic ranks; or as a sign of weakness for Dems/WH; or as a sticking point for progressives re 2012; etc. (Again the refrain: So much for the liberal media.)
  • Even in the Senate, where the bill passed 74-26 and more Democrats voted for it, more Republicans voted for it (28) than opposed it (19).
  • Btw, one factoid sheds some light on the supposed popularity of opposing, or rebelling, or shaking things up, re those Republican primaries. Of the 19 Republican senators who voted not to raise the debt ceiling, 13 are not up for re-election until 2016. Four are not up for re-election until 2014. Every GOPer up for election in 2010 voted to raise the debt ceiling, except Hatch (R-Utah) and Heller (R-Nev.). Theoretically Hatch and Heller know the electorates of their states best. In any case, the final vote tally casts some doubt on the much-vaunted electoral clout of the Tea Party, at least measured against the importance of Wall Street contributions.
  • Any Dem running for Congress who allows himself to be put on the defensive about ‘gummint spending’ after this deserves to lose.

 

The bigger distortions are misrepresentations on a more fundamental level. Some of the deeper issues go to the heart of political reporting in large media outlets:

  •  This fight in Congress was never about the debt ceiling. With the exception of a few Tea Party members, mainly from South Carolina, who were genuinely ready to become defaulters, the GOP in both House and Senate has repeatedly voted in the past to raise the debt ceiling, under both Republican and Democratic presidents, or to vote no only in a symbolic gesture after it was already clear that it would be raised. Every member of Congress had access to former Federal Reserve Chairman Alan Greenspan’s remarks on the debt ceiling, including Greenspan’s call for eliminating the debt ceiling. (Yes, the right wing distrusts the Fed. That doesn’t mean they mistake Greenspan for Greenpeace.) Every experienced Congress member knows that, as the president said, raising the debt ceiling simply allows the U.S. “to pay its bills on time, as we always have.”
  • The fight from Republicans in Congress was never about reducing the deficit. As President Obama said earlier, “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires.” The congressional GOP could have attempted what Sen. Tom Coburn (R-Okla.) is attempting, to find genuine examples of waste, fraud and abuse to cut. It could have voted—for the past thirty years—to trim military spending, reining in federal contractors. It could have eliminated tax breaks, unneeded by any measure, for Big Oil. It could have voted against the Iraq War. It could have reined in the intelligence establishment, which failed to prevent 9/11 and was rewarded for failure by more far-flung billions than ever, with the massive additional layer of bureaucracy known as the Department of Homeland Security. Congress could even have opted to run itself more frugally.

  • Instead, the Republican apparatus in government has worked, often behind the scenes, to drive up the cost of government more, regardless of the wishes of ordinary Republican voters. Every delay in Congress adds to the cost of government—added on top of other damage done in delaying needed legislation (the FAA is a prime example). Every delay in confirming judges and other federal appointees adds to the cost of running the agencies involved, and this GOP has delayed judicial confirmations and backlogged the courts more than any other party in U.S. history. The delay in raising the debt ceiling alone cost U.S. taxpayers billions. Furthermore, top GOPers have resisted efforts to make large federal contracts (mainly in military-security spending) more competitive, sometimes while simultaneously resisting efforts to exempt small contracts from competition. All this, of course, comes on top of the massive trillion-dollar hole of two wars and tax breaks for the wealthy and corporations, all funneled into effect by the GOP with some acquiescent Democrats.
  • The fight was never over the national debt. What GOPer has seriously called (publicly) for refusing to pay the interest, let alone the principle, on U.S. Savings Bonds bought by Americans or by other people? Come to think of it, what Republican in office has mentioned U.S. Savings Bonds recently?

  • Conclusory statement: Regardless of ‘red-meat’ campaign rhetoric, the GOP in office never strays far from the Wall Street fold. If you really want to analyze current GOP politics you can forget guns, god and gays.
  • Second conclusory statement: Regardless of ‘the base,’ the middle class, or the rest of the electorate, Republican policy in office is about using the power of office to break the middle class. GOP honchos have tried to replace Social Security; they are trying to weaken Medicare and Medicaid, using Orwellianisms the while; they fought tooth and nail to prevent enlightened single-payer health coverage and to keep insurance companies the gatekeepers for health care. For three decades they have boosted corporate efforts to undermine pension plans. They support every corporate effort to jettison pensions and health benefits. Their financial policy, if you call it that, enabled the mortgage-derivatives industry to damage trillions of dollars worth of pension security. They support easy bankruptcy for corporations and impose stringent bankruptcy standards on the unemployed. They oppose every effort toward accountability and transparency (‘regulation’) in both government and corporate bureaucracies. They oppose every effort to protect ordinary people’s ability to seek redress for harm, harm up to and including death, in our taxpayer-funded courts. The strategy is to reduce the clout of the middle class—i.e. the bottom 90 percent of the population, as Inside Job puts it—and to make most of the population ever more dependent on the few. And when individual GOP congress members interrupt the over-all strategy on some particular legislation, they lose. The one exception to this big-picture GOP rule in his own way, the one congressional Republican who opposed the invasion of Iraq, Rep. Ron Paul (R-Tex.), is retiring from Congress.

All of this has passed largely unreported in the same news media that also missed (among other things) the lead-up to the Iraq War, the bubble and bust in the real estate boom, and the impending crisis in the mortgage-derivatives industry.

 

Thought for the week, passed along from Local 2336 of Communications Workers of America (CWA): “Do you remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401K’s, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses and paid no taxes?  YEAH, ME NEITHER!”

 

Side note: In what is being reported as bad news financially, Americans are spending less and saving more. Setting aside if one could that that is actually good news, what did they expect after the charade over what should have been a routine rise of the debt ceiling?

Did anyone catch the language coming out of Washington last month, along with the name-calling? Debtdebtdebtdebtdebtdebtdebt . . .

 

More later

Drowning the Middle Class in the Bathtub, part 2

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Yesterday the public won one: The Senate upheld rules reining in debit card ‘swipe fees’ in the Dodd-Frank legislation passed last year.

The vote was uncomfortably close—with 54 senators voting to delay implementation of much-needed rules limiting the fees. Banks and major credit-card lenders, the same people helping drive college kids to suicide for years with unbridled credit-card marketing to young people untrained in handling debt, lobbied intensely against the bill. The fees pull in an estimated $20 billion a year for the industry, for debit-card services that cost lenders little to provide. You might remember that more people than ever are using debit rather than credit, part of the current trend toward less consumption and more saving that the public is engaged in that so threatens the GOP.

Some of the lobbying was done by Dick Armey of ‘FreedomWorks,’ a former Houston congressman who spends considerable time and energy trying to rally Tea Partiers in support of measures protecting the financial services industry. FreedomWorks gives every sign of considering the Tea Party gullible. Protecting abusive mortgage lenders, credit card lenders and other members of the financial sector from shouldering some of the burden of their own abuses is not in the public interest.

That doesn’t keep them from trying to claim it is, though. The D.C. Metro system has had large advertising signs posted for the past few weeks, urging the public not to let “big retailers” defeat our beloved credit card companies. You’d think VISA was Winnie Churchill. Following the Senate vote, banks pronounced yesterday a “dark day.” Here’s the darkness: Starting in July, swipe fees will be set at a flat rate of 12 cents per transaction. Multiply that 12 cents by billions of transactions, and the lenders still take away something that, to most people, looks like real money.

Meanwhile, Armey of FreedomWorks sent around a mass email under the subject line, “Stop Government Price Controls on Debit Cards.” More of that finish-off-the-public-once-and-for-all renaming (previously written about), but this one carries considerably less punch than renaming teachers and police ‘government jobs.’ ‘Price controls’ do not strike the same fear in a grass-roots movement with a populist tinge—too little populism, admittedly, but still it flashes out intermittently—that they strike among insurance companies, and anyway the accusation that the Obama administration or congressional Democrats are trying to implement price and wage controls the way Richard Nixon did is a bit much for anyone to swallow.

In fact, the white-collar goon squads slipped up big-time on this one. “TAKE ACTION!” Armey says in bold caps:

“Unless the law is changed, new Federal Reserve regulations will impose price controls on “interchange fees,” the price retailers pay for the ability to use debit cards. These price controls are yet another example of unnecessary government intervention that will likely result in higher fees and new restrictions on debit cards to include the end of banks issuing free debit cards and debit card reward programs.

Government bureaucrats should never be in the business of trying to set prices. The market should be allowed to operate free from government intervention in setting interchange fees.”

For one thing, this looks like an admission that swipe fees do add to consumers’ costs—“prices.” For another, this is another of those threats by the financial sector, like the insurance companies’ threat to raise their rates if health reform were implemented. Insurance companies raise their rates every year. There has not been one year in the past three decades when insurance rates did not go up. This time, the threat is that the public will lose free debit cards and debit card reward programs.

That last one is really a seriously hollow threat, as anyone who bothers to check the details of those ‘reward points’ programs can tell you. The customer has to rack up about half a million ‘reward points’ to purchase even a small item for ‘free.’ To get a ‘free’ round-trip flight to anywhere, it’s more like half a billion ‘reward points.’ This is an exaggeration, but not by much. It still takes an almost unthinkable number of purchases to get one freebie.

Quick reminder of the bigger picture here: 1) The GOP in Congress and GOP White House hopefuls are weeping crocodile tears over a federal budget deficit that their party largely created, with trillions down the drain through two wars and wasteful tax cuts for the rich and for corporations; 2) the same public figures go around saying that the federal government should balance its budget ‘the way people have to balance their household budgets,’ knowing full well that most households are surviving, if at all, partly on their mortgages, auto loans and education loans if not on other credit; 3) regardless of the wishes of individual rank-and-file members, the top party apparatus of the GOP has prevented or at least opposed every measure that might improve employment in the U.S. in the long term; 4) regardless of the wishes of individual rank-and-file party members, the same GOP apparatus has opposed every attempt to rein in abuses by the financial sector; and 5) because of that opposition, not one top executive in the industry that created the multi-trillion-dollar meltdown of mortgage derivatives has gone to prison or made adequate financial restitution.

To call this picture ‘irony’ would be too weak a sentiment. It represents quite simply an organized effort to break the back of the middle class, generally well orchestrated (though not with regard to swipe fees) and always well funded–being given a pass by the political press, which is missing this story the way it missed the story of Bush-Cheney’s true objectives back in the 2000 election campaign, missed the story of the 2000 non-vote count in Florida, and missed the story of the lead-up to invading Iraq.

And now they’re doing it again.

The picture is by no means just Dick Armey. Armey is just unusually crude and up-front—“Join the Fight Against the Unions,” reads another of his message lines—and I am undoubtedly doing him a favor (unsolicited and uncompensated) by writing this. That said, the FreedomWorks messages are peculiarly blatant. The most recent message reads, “Do Not Raise the Debt Ceiling and Save Medicare!”

Uncle Sigmund, call your office.

Another message from spring 2011 read, “First Wisconsin, Now Ohio!”

More eagerness to get public sector workers fired.

Not to harp on the misfeasance of the entrenched know-it-all political press, but that FreedomWorks has not been laughed out of town—along with the GOP budget proposals–really is a measure of institutional feebleness. Right now the entrenched are focusing most of their energy on Rep. Weiner, at the expense even of other sex scandals: Last word is that there are more shoes to drop re Gov. Arnold Schwarzenegger. Btw In case anyone missed it, Schwarzenegger was propped up, not to say boosted, by the same know-it-alls for years.

to be continued

Governor Palin’s Ride

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Palin on Harley

Governor Palin’s Ride

 

Listen, my children, and you shall hear

Of Palin’s requital for snubs severe

From electable candidates, in 2008:

Hardly a politico can now relate

He remembers that famous time and year.

 

She said to her friends,–“If Romney announce

By land or sea from the town tonight,

Tweet a message, or text, don’t let it bounce,

To me or a fan if we lose the limelight,–

One if by land and two if by sea;

And I on somebody’s Harley will be,

Ready to ride and spread the alarm

Through every sex-messaging village and farm,

For the knuckleheads to be up and to arm.”

 

Then she said good-night, and with muffled oar

Silently rowed to Max Factor’s shore;

Meanwhile, her friends, through alley and street

Wandered and watched with eager ears,

Till in the silence around them they hears

The muster of men at the green-room door,

The clink of mugs, and the tramp of feet,

And the shuffling of photo-grenadiers

Slouching down to their marks on the floor.

 

Palin in greenroom

Beneath, they could hear, like a sentinel’s tread,

The watchful night-wind, as it went

Creeping along from tent to tent,

And seeming to whisper, “All is well!”

A moment only they feel the spell,

For suddenly all their thoughts are bent

On a shadowy something far away,

Where the river widens to meet the bay,–

Like literacy, but it’s still the GOP—

A line of black, that bends and floats

On the rising tide, like a bridge of boats.

 

Meanwhile, impatient to mount and to ride,

 [another “Meanwhile,” Henry, really? Seriously?]

Alarmed that somebody’s boat might be raised by a tide,

Black-jeaned and leathered, with heavy stride,

On a different coast walked Governor Rear

Now she patted the Harley’s side,

Now gazed on the landscape far and near,

But mostly she watched with eager search

The twinkling monitor of the old iPod.

 

Palin and Harley fan

And lo! As she looks, on the menu site,

A glimmer, and then a gleam of light!

She springs to the back seat, the angle she turns,

But lingers and gazes, till full on her sight

A second light on the monitor burns!

 

A hurry of Harleys in a village-coast,

A shape in the moonlight, a bulk in the dark,

And beneath from the pebbles, in passing, a spark

Struck out by a Hog that flies fearless and fleet:

That was all! And yet, through the gloom and the light,

The fate of a career was riding that night;

And the spark struck out by that hog, in her flight,

Kindled the launching of Romney to toast.

 

Romney launches bid for president

It was one by the village-clock

When she rode into Lexington.

She saw the gilded weathercock

Swim in the moonlight as she passed,

Like a tweety bird already staring aghast.

 

It was two by the village-clock

When she came to the bridge in Concord town.

She heard the bleating of the flock,

And one at the bridge would be first to fall,

Pierced by his own tweeted photo-ball.

 

Former Rep. Weiner

You know the rest. In the books you have read

How the former governor fired and fled,–

How the GOP regulars gave ball for ball,

From behind each fence and farmyard-wall,

Chasing other knuckleheads down the lane,

Then crossing the fields to emerge again,

While Governor Palin denied it all.

 

 

So in the spotlight did not ride Revere;

Through the night went his cry of alarm

To every Middlesex village and farm,–

A cry of defiance, and not of fear,–

A voice in the darkness, a knock at the door,

And a word that shall echo forevermore!

As long as people try to get it right,

Through all our history, if we read,

In the hour of darkness and peril and need,

The people will waken and listen to hear

The hurrying hoof-beat of that steed,

And the midnight-message of Paul Revere.

 

 (“The liars are winning! The liars are winning!”)

Drowning the Middle Class in the Bathtub, part 1

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Alan Greenspan called for eliminating the debt ceiling

–and the press missed the story.

In response to Republican so-called budget proposals, President Obama says it best: “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires.”

That has not stopped the GOP in Congress, of course. In between publicizing the offenses of Rep. Anthony Weiner (D-N.Y.), as of this writing congressional Republicans, their allies in the media, and their lobbyists are still seizing every available moment to publicize the U.S. budget debt and the debt ceiling—even while calling for more tax cuts for the rich, resisting every effort to reduce health care costs, and adding to the cost of government by delaying needed confirmation votes. The Obama White House has a higher proportion of its judicial nominees and other nominees whose confirmation is being held up by the opposition party—that would be the Republicans—than any other White House in U.S. history. The immediate fiscal cost, setting aside any human costs if one could, is horrible: Every day that a judge is not confirmed is a day the docket in that court continues to backlog, with consequent loss of productivity even in the narrowest fiscal terms. That in itself is grist for GOP club-for-growth types and their henchmen, of course: They can then point to any failures of gummint, with a further view to discrediting the American form of government itself, while omitting to point out their own part in the failures.

They’re getting away with it, or getting away with it to some extent, largely because these shenanigans are not being adequately reported in the nation’s capital.

As with the justice system and other federal agencies, so with the federal budget deficit and the national debt: Just as the continuing refusal to confirm qualified appointees to judgeships costs the justice system, every day that John Boehner, Mitch McConnell and their henchmen dig in their heels and announce that they will refuse to raise the debt ceiling costs the U.S. Treasury billions of dollars.

This is no accident. This is the game plan. It is part of the over-all GOP strategy of breaking the middle class, breaking the national economy, to defeat President Obama, a strategy now so overt it is astounding that even the political press in Washington can still miss it. Let me repeat that: the GOP strategy to prevent the reelection of a Democratic president boils down, quite simply, to this: Break the middle class.

Part of the process is the passive-aggressive approach of simply refusing to adopt relatively simple measures that would improve matters.

Again, they’re getting away with it because the press in Washington is letting them get away with it. This is the part you would think no political reporter worth his salt could fail to mention, yet mind-bogglingly, it is going almost unreported.

At least in regard to the debt ceiling, for example, former Federal Reserve Chairman Alan Greenspan has offered a simple solution to eliminate the destructive and costly delays, the waste-of-time disputes and the consequent toll on both the economy and ordinary people’s faith in our system of government: Eliminate the debt ceiling.

On April 17, on NBC’s Meet the Press, Greenspan had this to say about the perennial question of whether the raise the debt ceiling:

“I have a more fundamental question. Why do we have a debt limit in the first place? We appropriate funds, we have tax law, and anyone reasonably adept at arithmetic can calculate what the debt change is going to be.”

Greenspan went on to point out that Congress and the White House already have signed legislation predetermining what the budget number is, adding, “Why we need suspenders and belts is something I’ve never understood.” He also rebuffed threats by congressional Republicans to stop government, pointing out that most GOP leaders were simultaneously saying they would not allow the federal government to default.

The content of Sunday morning talk shows is often reported in newspapers the next day and sometimes through the following week, as in the months during the lead-up to invading Iraq, when the Bush-Cheney administration routinely used morning television on all three traditional networks as well as Fox to boost the idea that Saddam Hussein was a second Hitler, except with nukes this time. When shortly after April 15 the former Chairman of the Federal Reserve, Dr. Greenspan, the man whom John McCain famously said he would re-appoint even if he were dead, called for eliminating the debt ceiling entirely, surely that would seem to be a news story. Right? The headline almost writes itself: “Greenspan Calls for End to Debt Ceiling.” Sub-head: “Former Fed Chair calls for Bush tax cuts to expire.”
Inside sub-head: “Greenspan asks why we need ‘belts and suspenders’.”

Greenspan’s remarks were not reported in any major newspaper. The Washington Post, which is the morning paper this writer subscribes to, did not report Greenspan’s call for ending the debt ceiling. Not one word went to that interesting exchange between Greenspan and host David Gregory. Instead, the Post focused on arguments between Treasury Secretary Tim Geithner and Republican honchos in Congress over whether the debt ceiling would be raised. Other newspapers followed suit—and incredible as it might seem to say so, Greenspan’s unusual and sensible position went unreported in print. Online publications did pick up on it, including a blog at the Post by Ezra Klein—meaning that the print periodicals could also have caught it, had they wished to do so.

In the meantime, Greenspan also supports raising the debt limit. He also had this to say: “the country’s financial crisis is “so imminent and so difficult that I think we have to allow the so-called Bush tax cuts all to expire.”

Another headline, one would think: “Former Fed Chief says let Bush tax cuts expire.”

Not reported.

As Greenspan said, “I think that what we have to become aware of is that if we allow taxes to fill in the holes here, we are going to find that we are getting ever closer to the type of economies that exist in Europe, which are very heavily laden and not rapidly growing the ways ours can.” He also warned that economic recovery is by no means as easy, quick and cheap as congressional Republicans and GOP presidential candidates are pretending: “there’s a lot of headwinds that are hitting the economy now and slowing it down, and we are in a soft patch.”

None of this made the headlines. Since the Meet the Press round table, Greenspan has continued to call for the debt limit to be raised, again with little reportage in newspapers.

The bigger picture, politically speaking, is bigger than the national debt: Regardless of the wishes of rank-and-file Republicans who vote for them, the strategy of Republicans in congress is quite simply to break the middle class. Every substantive policy proposal aggrandizes the few over the many. Each splashy ‘values’ struggle, over abortion or stem cell research or religious language in public buildings, is used as smokescreen—augmented by what seems to be an unending series of sex scandals involving politicians of both parties, playing out in the news media to maximum effect. Regardless of the values of their religious supporters, and regardless of the values of fiscally prudent people, GOP policy makers, their allies in the media, and their lobbyists always collide at some point with anyone working in any way for the public interest.

In this atmosphere of imaginary budget-cutting and real destruction, Orwellianisms abound. So-called ‘budget hawks’ and ‘deficit cutting’ are just more Orwellianisms.

For starters, anyone serious about trimming the budget would raise taxes on millionaires and billionaires. In March Congresswoman Jan Schakowsky (D-Ill.) introduced a good bill, the Fairness in Taxation Act, which would create new tax brackets for millionaires and billionaires. The law, which Republicans are fighting with all their might, would increase the income tax by one percent per bracket, for anyone with an income of a million or more a year. For people with incomes of one million to ten million dollars, income tax would be 45 percent. For people with incomes of ten to twenty million, it would be 46 percent. For people at $20 million to $100 million, it would be 47 percent. And for people bringing in income over $100 million, the tax rate would be 48 percent.

This, be it noted, is not only less than the top tax rates throughout the periods of our greatest economic growth in the postwar twentieth century, it is even less than the top tax rates during the Reagan years, as pointed out in a good analysis by Lawrence O’Donnell on last night’s The Last Word.

[note: I would have liked to link to the Last Word web site as a courtesy, but the MSNBC and Think Progress web sites both seem to have attached themselves to some kind of cyberspace bog. You go there, you don’t come back, at least not any time soon.]

On the question of tax fairness, a Wall Street Journal-NBC opinion poll shows that 81 percent of Americans support a surtax on the wealthiest individuals.

In the bigger picture, every reliable statistical survey since the 1970s has shown an increasing proportion of U.S. wealth and income going to the top percentiles. Wallace Peterson wrote in 1994 in his Silent Depression, which sounds like a psychology book but isn’t, that between 1983 and 1989—Reagan years—the share of household net worth owned by the top one percent of households jumped from 31.5 percent (already high) to 37 percent. The share of net worth owned by the next 9 percent of households near the top declined from 35.1 percent to 31.2 percent.

So as of 1983 the top ten percent of households owned 68.2 percent of U.S. net worth. Meanwhile, the share of net worth owned by the bottom 90 percent of households in the U.S. fell from 33.4 percent to 31.8 percent.

That was never a healthy economic situation to begin with. It has only gotten worse since then. Income inequality in the Land of Opportunity is not only worse now than in the Reagan years, it is worse than at any time since the lead-up to the Great Crash of 1929, and for analogous reasons. Today, the top 1 percent of America’s households own 34 percent of the nation’s wealth, as Schakowsky points out, while the bottom 90 percent own 29 percent.

As previously written, my own working definition of the term middle class is that phrase so lucidly used in the Oscar-winning documentary Inside Job–“the bottom 90 percent.” Benefiting the ‘bottom’ 90 percent of the population brings far greater economic gains than benefiting the top 10 percent, let alone (further) benefiting the top 1 percent.

That’s why the GOP in Congress will have none of it. Their goal is not to benefit the middle class but to break it, partly by cutting Social Security, Medicare, and every other social service–“if you can google, cut it”—as the ludicrous Tim Pawlenty says. Needless to say, every federal, state and local agency can be googled, so that doesn’t leave out anything. Isn’t he cute. But then these are the people who refer to teachers, police and firefighters as—any guess?—“government jobs.” My darling rightwing high-school English teacher, whom I loved, must be rolling over in her grave.

They are trying to drown the middle class in the bathtub.

To be continued

New intelligence at the White House: Osama bin Laden killed

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President Obama announced Sunday night that Osama bin Laden was killed in a compound in Abottabad, Pakistan:

” . . . shortly after taking office, I directed Leon Panetta, the director of the CIA, to make the killing or capture of bin Laden the top priority of our war against al Qaeda, even as we continued our broader efforts to disrupt, dismantle, and defeat his network.

Then, last August, after years of painstaking work by our intelligence community, I was briefed on a possible lead to bin Laden. It was far from certain, and it took many months to run this thread to ground.  I met repeatedly with my national security team as we developed more information about the possibility that we had located bin Laden hiding within a compound deep inside of Pakistan. And finally, last week, I determined that we had enough intelligence to take action, and authorized an operation to get Osama bin Laden and bring him to justice.”

Slightly after 1:00 a.m. Sunday, a U.S. Joint Special Operations Force attacked, and almost ten years after the attacks of Sept. 11, 2001, the man who served as icon for violent networks is gone. From an intelligence standpoint, it is regrettable that bin Laden was not captured alive. He could have been a useful intelligence source. But the pursuit and its conclusion still demonstrate what rational, effective intelligence looks like.

After bin Laden went missing in late 2001, Bush and Cheney publicly downplayed bin Laden. Bush administration emails also show little interest in bin Laden behind the scenes.

Prolonged inquiry under the Freedom of Information Act (FOIA) has produced emails between the Bush White House and offices in the Bush Justice Department. The FOIA search included email records from former Attorney General John Ashcroft; Michael Chertoff, previously assistant attorney general in the Criminal Division and later secretary of Homeland Security; former Deputy Attorney Gen. James Comey; former Deputy Attorney Gen. Paul McNulty; Philip J. Perry, acting associate attorney general and son-in-law of Vice President Dick Cheney; former Associate Attorney Gen. Jay B. Stephens; and David Ayres, Ashcroft’s chief of staff.

The Office of Information Policy, which handles FOIA requests, found emails mentioning bin Laden in the Bush administration only in Attorney General and Office of Public Affairs records. Alberto Gonzales, Bush’s first White House counsel and then Attorney General, did not use email.

White House emails from 2001 through 2008, generally reported as missing, numbered in the millions. Thousands went between the White House and top Justice officials, through government accounts and private accounts including some at the Republican National Committee.

The FOIA requests produced 26 emails pertaining to Osama bin Laden. The 26 emails between Bush’s White House and his Justice Department that mention bin Laden break down as follows:

Seven insider emails referred to bin Laden in 2001. Five were press releases from White House Press Secretary Ari Fleischer, between Sept. 24 and Dec. 17. One was a copy of Bush’s address to the Joint Session of Congress a week after 9/11 sent around by Kenneth B. Mehlman, later chairman of the Republican National Committee, in which Bush mentioned “a person named Osama bin Laden.” The other email mention of bin Laden in 2001 occurred in a forwarded newspaper article about Ashcroft.

In 2002, one email referred to bin Laden—a bogus claim, forwarded under the heading “Do you remember?,” that Oliver North warned Congress about bin Laden in the Iran-Contra hearings but was shut off by then-Sen. Al Gore. North himself denied this claim, which is debunked on Snopes.com.

Three emails referred to bin Laden in 2003—one press briefing, one forwarded newspaper article, and a statement from Director of Public Affairs Mark Corallo criticizing a records access study.

In election year 2004, fifteen internal emails mentioned bin Laden–again, only forwarded press releases, newspaper articles, or talking points, some reacting to disclosure of the famous Aug. 6, 2001, Presidential Daily Briefing titled “Bin Laden Determined to Strike in U.S.”

In short, no email archives indicate that Bush’s inside circles were interested in capturing Osama bin Laden (or Mullah Omar of Afghanistan). A talking point, not a target–bin Laden became chiefly, as we now know, a public relations tool to gear up the invasion of Iraq.

Anne Arundel Community College teaches wrong lesson: Break Maryland law and get what you want

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Anne Arundel Community College teaches wrong lesson: Break Maryland law and get what you want

The unfair treatment of instructor Bert Hubinger

Colleges should not break the law.

 

AACC

Background: In Maryland, recording a private conversation requires the consent of both parties. Secretly recording a conversation falls legally under the heading of an “intercept,” as defined in “Wiretapping and electronic surveillance” in the Annotated Code of Maryland (“Courts and Judicial Proceedings, Title 10. Evidence, Subtitle 4.)

Incidents of secret videotaping proliferating

The law on being recorded in a conversation without consent varies from state to state. As shown in a number of similar or parallel incidents, numerous states permit audiotaping or videotaping a conversation, even a private conversation, if only one party to the conversation consents. Maryland, where Anne Arundel Community College is located, is not one of these states.

On March 31, AACC adjunct English professor Bert Hubinger met by prior arrangement with one of his students, Michael A. (Mike) Fowler, 38. The meeting took place in the classroom, after everyone else had left—“I don’t really have an office,” says Hubinger, who has taught at AACC since 1998—to discuss issues arising from Fowler’s conduct, including non-attendance and disruptions in class.

Hubinger was interviewed by telephone and has communicated several times by email and phone. Fowler responded to questions by messages through his Facebook page.

 

After receiving a grade of 65 on his first essay in Hubinger’s English 112 class, Fowler was “furious,” Hubinger wrote to AACC administrators, telling Hubinger that he knew better how to teach, because he taught swimming, and that he had a military background in Special Forces. Fowler’s Facebook page lists his major as psychology. Hubinger’s wife is a child psychologist. Hubinger says that he assumed Fowler had dropped the course after missing classes from March 10 to March 29, when he returned but stormed out mid-class.

The March 31 meeting was their second private talk. Fowler told Hubinger that he had complained about Hubinger to the English department chair, Ronald A. Deabreu. Hubinger wrote to AACC administrators, “He said that he had gone to DeAbreu to complain about me, and that DeAbreu’s instructions to him were to instruct me to help him catch up on all the work he had missed during his absences.” DeAbreu has not responded to a call for comment.

Hubinger, who says he “used the f-word twice,” adds that “Fowler even had the impertinence to tell me what I could say or do. That’s when I reached my limit, and cursed at him.” Hubinger says that he angrily refused to make up for the student’s missed work after being repeatedly insulted. Fowler, he says, seemed to stay calm in the individual conference despite his previous anger and disruptions. At the end of the conversation, Fowler exited the classroom, pulling his cell phone camera out of his pocket and waggling it at Hubinger, who says Fowler smiled at him and said, “Got you! Thanks!”

Fowler posted the video clip online the same day, posting it on his Facebook page, on YouTube, and at toshcommunity.comedycentral.com. He also joined the Tosh.O online community March 31, but his page at toshcommunity.com has no profile and no other postings. The video remained on Facebook Apr. 26, captioned “AACC Professor Bert Hubinger goes way to [sic] FAR!” It has since been removed from Facebook but appears on other web sites, some dedicated to practicing English.

Fowler also sent a copy of the video to DeAbreu, the English Department chair, “as a precautionary measure,” he says. He has not replied to a question whether he sent the clip to anyone else at AACC.

Under Maryland law, every further transmission of the original illegal recording is also a violation of law.

AACC Interim Director of Public Relations and Marketing Laurie Farrell, returning a call for comment, says only that the college “does not discuss personnel or student actions, or any actions, if any, taken by the college with regard to either.”

 

“I haven’t seen it myself”

Links to the video bring up the message “This video is private.” “I haven’t seen it myself,” says Hubinger. Fowler has not replied to questions whether he would allow viewing access to Hubinger, or to a journalist.

 

At Tosh.O on May 11, the video shows 92 views. Heading: “AACC Professor Bert Hubinger Uncensored!! Watch it . . .”

  • Caption: “English professor Bert Hubinger and I had a bit of a disagreement..It is a bit slow in the begining..wait for it because he GOES WAY OUT OF LINE FOR A PROFES…”

Hubinger was shortly informed by superiors that “certain people,” meaning administrators, had seen the video. He was also informed that his teaching services would not be needed in fall 2011, and his tutoring—a regular part of his job, approximately ten hours a week–was terminated immediately.

Fowler is 38 according to his MySpace page. Asked about the incident, Fowler begins cautiously: “What position are you taking with this article?”

Responding to further questions, he writes, “I posted the video shortly after the situation occured..and no the video is completely unedited..I sent a copy to the english department head as a precautionary measure.”

The audio-visual aid worked with unusual effectiveness. As stated, Hubinger was informed by superiors that he was not going to be offered tutoring or fall classes. Hubinger says that Fowler was transferred to another class.

 

Back to the law

The Maryland statute is commendably clear; see “§ 10-402. Interception of communications generally; divulging contents of communications; violations of subtitle”:

“(a) Unlawful acts. –Except as otherwise specifically provided in this subtitle [law enforcement] it is unlawful for any person to:

(1) Willfully intercept, endeavor to intercept, or procure any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication;

(2) Willfully disclose, or endeavor to disclose, to any other person the contents of any wire, oral, or electronic communication, knowing or having reason to know that the information was obtained through the interception of a wire, oral, or electronic communication in violation of this subtitle; or

(3) Willfully use, or endeavor to use, the contents of any wire, oral, or electronic communication, knowing or having reason to know that the information was obtained through the interception of a wire, oral, or electronic communication in violation of this subtitle.

(b) Penalty. –Any person who violates subsection (a) of this section is guilty of a felony and is subject to imprisonment for not more than 5 years or a fine of not more than $10,000, or both.”

In a nutshell: An Anne Arundel Community College student broke Maryland law when he video-recorded a private conversation without the professor’s consent, broke the law again when he posted the video online, and broke it again transmitting the video to the department chair. Any administrator who then transmitted the video access to others, aside from legal counsel, also violated the statute.

That no administrator viewing the video saw fit to give the instructor himself access to it looks as snaky as the initial videotaping.

Even for a non-lawyer, it is easy to understand why school administrators refuse to discuss a matter involving personnel or a student. It is particularly easy to understand in a matter where administrators have not only the official obligation to protect others’ privacy but also the constitutional protection against self-incrimination.

But it is more difficult to understand why AACC, or any institution funded by Maryland citizens, would not have a policy of compelling its students to abide by Maryland law in the first place.

As clarified by Raquel Guillory, Public Information Officer for Maryland Attorney General Douglas Gansler, “It doesn’t matter whether a student is on campus or not, they have to abide by Maryland law. Being on campus doesn’t make them immune.” Guillory adds, succinctly, “The student issue is not an issue. If you’re in Maryland, you have to abide by Maryland law.”

 

The same principle should apply to campus administrators.

Too bad it was not applied in the Hubinger incident.

Fowler has not responded to further questions. Hubinger has filed charges with Anne Arundel County and with the State’s Attorney for AA County. “We’ll see what happens,” he says.

It will be interesting to see, going forward, what if any legal costs AACC administrators try to stick the public with. A more economical as well as more principled route in future would be to inform incoming college students of the right not to be secretly taped in Maryland, and of available channels for complaint or redress on campus.

 

To be continued

[This article, deleted by the system among hundreds of articles and blog posts in summer 2011, is re-posted using archives and Word files.]

Osama bin Laden killed, president announces

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Osama bin Laden was killed in a compound hidden deep in Pakistan, President Obama announced Sunday night. Complete transcript of the president’s statement linked here. From the statement:

“Yet Osama bin Laden avoided capture and escaped across the Afghan border into Pakistan.  Meanwhile, al Qaeda continued to operate from along that border and operate through its affiliates across the world.

And so shortly after taking office, I directed Leon Panetta, the director of the CIA, to make the killing or capture of bin Laden the top priority of our war against al Qaeda, even as we continued our broader efforts to disrupt, dismantle, and defeat his network.

Then, last August, after years of painstaking work by our intelligence community, I was briefed on a possible lead to bin Laden.  It was far from certain, and it took many months to run this thread to ground.  I met repeatedly with my national security team as we developed more information about the possibility that we had located bin Laden hiding within a compound deep inside of Pakistan.  And finally, last week, I determined that we had enough intelligence to take action, and authorized an operation to get Osama bin Laden and bring him to justice.

Today, at my direction, the United States launched a targeted operation against that compound in Abbottabad, Pakistan.  A small team of Americans carried out the operation with extraordinary courage and capability.  No Americans were harmed.  They took care to avoid civilian casualties.  After a firefight, they killed Osama bin Laden and took custody of his body.”

Almost ten years after the attacks of Sept. 11, 2001, the man who served as icon for violent networks is gone.

From an intelligence standpoint, it is still regrettable that bin Laden was not captured alive. He would have been a source of useful information.

But the pursuit and its conclusion demonstrate what a rational, effective intelligence project looks like.

“Missing” White House emails retrieved from Bush administration records indicate that top Bush Justice Department officials had little interest in the pursuit of Osama bin Laden or Mullah Mohammed Omar, head of the Taliban in Afghanistan.

Under the Freedom of Information Act (FOIA), prolonged correspondence has pursued “missing” emails between the Bush White House and Bush’s attorney general, deputy attorney general, associate attorney general, Office of Public Affairs, Office of Legal Counsel and Office of the Inspector General, in the Justice Department.

After a lengthy search, President Obama’s Office of Information Policy, which handles FOIA requests, found emails pertaining to Osama bin Laden or to Mullah Omar only in Attorney General and Office of Public Affairs records from the Bush administration. Alberto Gonzales, previously Bush’s White House counsel and then Attorney General, did not use email.

White House emails from the Bush years, often reported as missing, numbered in the millions. Thousands of emails were sent between the Bush White House and top Justice Department officials, through both government email accounts and private accounts including the Republican National Committee.

FOIA inquiries have produced two emails, totaling four pages, between the White House and Justice under the former administration relating to Mullah Mohammed Omar.

The FOIA requests produced 26 emails, totaling 119 pages, relating to Osama bin Laden.

The first internal reference to Mullah Omar, according to email records, occurred Dec. 7, 2001. White House staffer Edward Ingle forwarded a series of talking points titled “Meet Mullah Omar” from Deputy National Security Adviser James R. Wilkinson to a distribution list of several dozen government personnel in Cabinet offices and the Pentagon including Paul Wolfowitz. Omar has continued to evade capture and is believed to be living in neighboring Pakistan. There is no reference in the emails to Omar dating from the period when he was evading US forces. The next, and only other, mention of Omar’s name was an incidental reference in a Sept. 23, 2004, New York Times article on Afghanistan forwarded the same day by White House staffers.

The 26 emails that mention Osama bin Laden in correspondence between the Bush White House and Justice Department break down as follows:

There were seven email references to Osama bin Laden in 2001. Five occurred in press releases from White House Press Secretary Ari Fleischer forwarded by Ingle — one Executive Order, two transcripts of press briefings and two sets of talking points — dating from Sept. 24 to Dec. 17, 2001. Kenneth B. Mehlman, then in the Executive Office Building and later chairman of the Republican National Committee, sent around a copy of Bush’s address to the Joint Session of Congress Sept. 21, 2001, in which Bush briefly mentioned “a person named Osama bin Laden.” The other mention of bin Laden in 2001 comes in an Oct. 15 St. Louis Post-Dispatch article about John Ashcroft and terrorism, forwarded by David Israelite.

One email reference to bin Laden occurred in 2002, also forwarded by David Israelite. Under the heading “Do you remember?,” Israelite distributed to colleagues, including Barbara Comstock, a description of a purported 1987 video clip saying that Oliver North warned Congress about Osama bin Laden in the Iran-Contra hearings but was shut off by then-Sen. Al Gore. This claim had already been debunked by North himself (see www.snopes.com). Comstock went on to chair Scooter Libby’s defense fund in 2007 and in 2008 ran for Congress from Virginia.

There were three email references to bin Laden in 2003 — a press briefing, a forwarded newspaper article, and a December statement from Director of Public Affairs Mark Corallo criticizing a Transactional Records Access Clearinghouse study.

Fifteen emails mentioned bin Laden in 2004. Some were in response to criticism of the White House after disclosure of the famous Aug. 6, 2001, Presidential Daily Briefing, “Bin Laden Determined to Strike in U.S.” All email references are forwarded press briefings and other press releases, forwarded newspaper articles, or talking points related to bin Laden.

The Department of Justice represents the US government in enforcing the law in the public interest. According to the official definition of responsibilities printed under a photograph of then Attorney General Ashcroft, “Through its thousands of lawyers, investigators, and agents, the Department plays the key role in protection against criminals and subversion … It represents the government in legal matters generally, rendering legal advice and opinions, upon request, to the President and to the heads of the executive departments. The Attorney General supervises and directs these activities, as well as those of the U.S. attorneys and U.S. marshals in the various judicial districts around the country.”

Either top Justice Department personnel under the previous administration were not a set of bloodhounds, or documents have been suppressed. The email archives contain no indication that inside circles in the Bush White House and DOJ were paying attention to capturing Osama bin Laden or Mullah Omar. Mentions of bin Laden and Omar come strictly in the context of public relations.

There are no records of emails to or from Alberto Gonzales, presumably because he did not have an email account.

Email records searched under FOIA include those of previous Attorney General Ashcroft; Michael Chertoff, previously assistant attorney general in the Criminal Division and later secretary of Homeland Security; former Deputy Attorney General James Comey; former Deputy Attorney Paul McNulty; Philip J. Perry, acting associate attorney general and son-in-law of Vice President Dick Cheney; former Associate Attorney General Jay B. Stephens; and David Ayres, Ashcroft’s chief of staff.

After leaving Justice, Ayres co-founded The Ashcroft Group. His corporate biography describes Ayres thus:

“After the September 11, 2001 terrorist attacks, Mr. Ayres managed the Department’s crisis operations and restructuring of the FBI to focus on preventing terrorist attacks. As the Attorney General’s principal counter-terrorism advisor, Mr. Ayres oversaw numerous counter-terrorism operations, program reorganizations and policy reforms to prevent additional terrorist attacks.”

Many persons in the Department of Justice and the executive offices of the White House had responsibilities in the “war on terror,” at least according to public pronouncements. Given all the public emphasis on “information sharing” and cooperation among law enforcement and security entities, and the speechifying against a purported “wall” between domestic and foreign information gathering, one would think there would have been extensive correspondence about bin Laden and Omar among others.

Again, either there was such extensive correspondence, and it is being suppressed; or there was no such interest in bin Laden at the highest levels of government, meaning that indeed the previous administration viewed bin Laden chiefly as a public relations tool.

What did they know about bin Laden that they did not share with the public? Were they confident, for undisclosed reasons, that he posed no threat? Why are there no expressions of concern about his whereabouts?

With this plate handed to him, it is a wonder that President Obama’s hair has not turned white already.

Margie Burns is a Texas native who now writes from Washington, D.C. Email margie.burns@verizon.net. See her blog at www.margieburns.com

From The Progressive Populist, December 15, 2009

Bin Laden, Pakistan, and corporate media narrative

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With thousands of Afghanis, Iraqis, and U.S. troops killed in Afghanistan and Iraq since Sept. 11, 2001, Osama bin Laden, the fugitive icon of terrorist networks, was finally tracked down and killed in Pakistan. And not just in Pakistan, either, but in the city of Abbottabad, in the neighborhood of Pakistan’s military academy.

Let’s say this clearly, just once: Part of the unnecessarily prolonged failure to catch bin Laden, and a very large part of the tragic diversions of two bloody wars, can be laid to the account of the large media outlets in this country. Foreign policy under the Bush administration was dictated by selfish concerns, and corporate media outlets almost entirely went along. Foreign policy was influenced—to put it nicely—by politics, and politics was influenced—again, to put it nicely—by money, and the big media almost entirely went along.

Indeed, it would be more accurate to say that foreign policy, like domestic policy, was determined by political advantage—in simplest terms, money to get position, position to get money. Thus the previous administration (like others before it) bound the full faith and credit of the American public, largely without its consent and often without its knowledge, to a series of repressive regimes in the Middle East perpetually at odds with their own populations.

That this strained and upside-down affiliation was not in the best interest of the American public was spectacularly demonstrated by the official response to 9/11. Just a few outstanding and (by now) widely known facts in the public record reflect the discrepancy between Bush policy and public interest:

  • Most of the skyjackers were Saudis, yet members of the Saudi ruling family were permitted to fly out of the U.S.—actually, helped to fly out of the U.S.–immediately after the 9/11 attacks.
  • Foreign affairs experts and security experts knew that the Saudi regime was financing terrorism, yet the Bush administration enabled some of these special flights with Saudis aboard, just after 9/11, to leave from Las Vegas. Their luggage and cargo were not even searched, according to people I have interviewed.
  • Similarly, anyone with expertise in pertinent fields knew that training for violent Islamist partisans took place in Pakistan, with collusion in the Pakistani military and Inter-Services Intelligence (ISI), its secret service. Furthermore, some of the money that went to skyjacker Mohamed Atta was quickly traced to an account in Pakistan. Yet Gen. Musharraf, Pakistan’s dictator, was swiftly photographed sitting next to President Bush in the White House, a “partner” in the ‘war on terror.’
  • There were no Afghanis among the skyjackers. Yet in spite of the key facts of Saudi finance and Pakistani training, White House emphasis and rhetoric in late 2001 was all about “harboring.” Pitiful Afghanistan, whose people had little to no say in Osama bin Laden’s having been harbored there, bore the brunt of a massive U.S. assault ostensibly in response to 9/11—until the Iraq war.
  • There were no Iraqis among the skyjackers, and there was no affiliation between Iraqi dictator Saddam Hussein and Islamist partisan networks. Quite the contrary. Yet from at least 2002, the Bush-Cheney was obsessively focused on invading Iraq.

As someone said, “Why didn’t we lash out at Saudi Arabia?”

Instead, we got a narrative from the then-White House that was all about a Dr. No-type ‘mastermind,’ later enriched with anthrax—until the source of the anthrax mailings was determined to be domestic rather than exotic—and spiced up with ‘caves’ and mountain wilderness impenetrable to anyone but National Geographic photographers. And the largest media outlets, with few exceptions, went along with this Aladdin-influenced narrative every step of the way.

This is a spectacular demonstration of what can happen when news outlets (television) pay more attention to production values than to research, evidence and investigation. I said in a radio interview years ago that if just one, just one, of our three traditional television networks had had a division dedicated to research, data and investigation, the entire history of America following 9/11 would have been different. (Ted Koppel, then at ABC, soon afterward at least devoted an hour or so to reading the names of American troops killed in the war.)

This whole bloody, tragic exercise in futility is also a demonstration of what can happen when news outlets (print) pay more attention to who’s who than to research, evidence and investigation. I have always loved newspapers, but there was remarkably little appetite in the political press in our nation’s capital for close scrutiny of the Bush administration or of its policies, domestic or foreign. Access uber alles.

It’s not like they didn’t have some hints, either. Back to Pakistan and some known facts about Pakistan:

  • Gen. Musharraf, universally regarded as a dictator by any standard, attained his office in the first place through a coup d’etat.
  • Pakistan’s military and ISI openly supported partisan networks during and after the Afghani ouster of the Soviet Union from Afghanistan, receiving CIA support to do so.
  • Pakistan’s Lt. Gen. Mahmud Ahmed resigned his position at the ISI immediately after 9/11. So complete was the ISI’s lack of oversight and lack of help (for the U.S.) regarding the 9/11 attacks that Ahmed had been in the United States, visiting members of the Bush administration, on Sept. 11.

But in the major media outlets, virtually none of the information above was allowed to dilute the central Bush-Cheney narrative “We’re at war”—first with Afghanistan, next with Iraq, next if they’d been able to manage it with Syria and Iran. The narrative remained almost unquestioned, and of course actively supported by neo-cons in PNAC and elsewhere, even when Wall Street Journal reporter Daniel Pearl was kidnapped and murdered in Pakistan.

Things could have been different. I am far from being an expert on the Middle East and have spent only one month there, but even I could provide a short overview in 2001 on Pakistan’s sponsoring terrorism.* Strange how little we heard of that from Bush or Cheney, I always thought. But anyone who mentioned it in Washington was persona non grata.

Needless to say, we all make mistakes. So completely did Bush-Cheney obviate bin Laden’s existence that even I thought at one point that bin Laden was dead. Gen. Musharraf was among those who said bin Laden had been killed at Tora Bora:

“Musharraf, a Bush ally, made some of his comments on CNN. The FBI speculated openly around the same time that bin Laden was dead. So did the Pentagon.

According to “The News,” Islamabad’s main newspaper, “Fed up by the questioning [about bin Laden], the U.S. military authorities announced finally that they would stop chasing shadows and instead focus on other aspects of the so-called war on terrorism.” (“Musharraf Advised to be Less Forthcoming While Commenting on bin Laden,” Jan. 20, 2002).”

A security and intelligence expert I interviewed, Theodore Pahle, thought the same, and said so. Shortly after that, bin Laden surfaced in another video, all but explicitly displaying as an icon. This was immediately before the 2004 election. (I have thought for years that bin Laden was reading his own press. Current news on information cached at bin Laden’s hideout is reporting some heterodox schemes for attacks on anniversaries, etc.)

Daniel Pearl was killed in Pakistan, Benazir Bhutto was assassinated when she returned to Pakistan, Abu Zubaydah was captured in Pakistan. Yet the focus was always on Afghanistan, Iraq, Syria, Iran—anywhere, anywhere but Pakistan (and Saudi Arabia). Follow the little bouncing ball. President Zardari of Pakistan also speculated publicly that bin Laden was dead.

And in connection with the Bush-Cheney never-ending war, those imaginary glittering caves in Afghanistan—“poor as field mice” said a man who was kidnapped there, describing the actual inhabitants of that terrain–were replaced only with imaginary rustic huts in the mountainous border region. Aladdin replaced by Indiana Jones. This although the production values in bin Laden’s videotapes made it highly unlikely that they could have been produced in such a venue.

*A version of this article ran in the Prince George’s Journal. It, like the other Journal newspapers—a local chain in metro D.C.—no longer exists. The chain was bought out by the barking-dog rightwing Examiner company in 2004. (All the columns I had published in various Journals from 1996 to 2004 disappeared except in some sheets I saved. I was barely able to print out most of the titles before the web site was wiped by the publishers.)

Goldman Sachs shorted its own products, Senate investigation reports

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Senate Permanent Subcommittee on Investigations: Goldman Sachs shorted its own products

Sen. Carl Levin intends to refer Goldman Sachs to the Justice Department and the SEC for possible prosecution and civil litigation, regarding its trading in subprime mortgage-related paper.

Goldman Sachs

The Senate Permanent Subcommittee on Investigations, chaired by Levin, released its report on the subprime lending crisis yesterday, following months of investigation into the financial debacle culminating in 2008.

Sen. Levin

“The investigation found that the crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”

Among the most hair-raising instances of the latter, the report summarizes, were problems at the formerly hallowed Wall Street firm of Goldman Sachs.

Saving discussion for later, following are some pertinent passages from the Executive Summary on Goldman Sachs, one of two case studies on investment bank abuses. (The other is DeutscheBank.)

As the Subcommittee notes,

“Investment banks can play an important role in the U.S. economy, helping to channel the nation’s wealth into productive activities that create jobs and increase economic growth. But in the years leading up to the financial crisis, large investment banks designed and promoted complex financial instruments, often referred to as structured finance products, that were at the heart of the crisis. They included RMBS [residential mortgage backed securities] and CDO [collateralized debt obligation] securities, credit default swaps (CDS), and CDS contracts linked to the ABX Index. These complex, high risk financial products were engineered, sold, and traded by the major U.S. investment banks.”

Wall Street commerce in these complex packages based ultimately on ordinary homeowners’ mortgages became brisk and then became huge:

“From 2004 to 2008, U.S. financial institutions issued nearly $2.5 trillion in RMBS and over $1.4 trillion in CDO securities, backed primarily by mortgage related products. Investment banks typically charged fees of $1 to $8 million to act as the underwriter of an RMBS securitization, and $5 to $10 million to act as the placement agent for a CDO securitization. Those fees contributed substantial revenues to the investment banks, which established internal structured finance groups, as well as a variety of RMBS and CDO origination and trading desks within those groups, to handle mortgage related securitizations. Investment banks sold RMBS and CDO securities to investors around the world, and helped develop a secondary market where RMBS and CDO securities could be traded. The investment banks’ trading desks participated in those secondary markets, buying and selling RMBS and CDO securities either on behalf of their clients or in connection with their own proprietary transactions.”

This is where the plot thickens:

Two investment banks in particular, Goldman Sachs and Deutsche Bank, “illustrate a variety of troubling practices that raise conflicts of interest and other concerns . . .”

Goldman was engaged not only in selling complex derivatives, i.e. boosting them, but also in betting against complex derivatives:

“From 2004 to 2008, Goldman was a major player in the U.S. mortgage market. In 2006 and 2007 alone, it designed and underwrote 93 RMBS and 27 mortgage related CDO securitizations totaling about $100 billion, bought and sold RMBS and CDO securities on behalf of its clients, and amassed its own multi-billion-dollar proprietary mortgage related holdings. In December 2006, however, when it saw evidence that the high risk mortgages underlying many RMBS and CDO securities were incurring accelerated rates of delinquency and default, Goldman quietly and abruptly reversed course.

“Over the next two months, it rapidly sold off or wrote down the bulk of its existing subprime RMBS and CDO inventory, and began building a short position that would allow it to profit from the decline of the mortgage market. Throughout 2007, Goldman twice built up and cashed in sizeable mortgage related short positions. At its peak, Goldman’s net short position totaled $13.9 billion. Overall in 2007, its net short position produced record profits totaling $3.7 billion for Goldman’s Structured Products Group, which when combined with other mortgage losses, produced record net revenues of $1.2 billion for the Mortgage Department as a whole.”

Investment bank and investment advisor Goldman did not go the extra mile in transparency:

“Throughout 2007, Goldman sold RMBS and CDO securities to its clients without disclosing its own net short position against the subprime market or its purchase of CDS contracts to gain from the loss in value of some of the very securities it was selling to its clients.” [emphasis added]

There are four such mega-packages in particular, “four CDOs that Goldman constructed and sold called Hudson 1, Anderson, Timberwolf, and Abacus 2007-AC1.”

“In some cases, Goldman transferred risky assets from its own inventory into these CDOs; in others, it included poor quality assets that were likely to lose value or not perform. In three of the CDOs, Hudson, Anderson and Timberwolf, Goldman took a substantial portion of the short side of the CDO, essentially betting that the assets within the CDO would fall in value or not perform. Goldman’s short position was in direct opposition to the clients to whom it was selling the CDO securities, yet it failed to disclose the size and nature of its short position while marketing the securities. While Goldman sometimes included obscure language in its marketing materials about the possibility of its taking a short position on the CDO securities it was selling, Goldman did not disclose to potential investors when it had already determined to take or had already taken short investments that would pay off if the particular security it was selling, or RMBS and CDO securities in general, performed poorly.”

Taking these four packages one by one:

  • “In the case of Hudson 1, for example, Goldman took 100% of the short side of the $2 billion CDO, betting against the assets referenced in the CDO, and sold the Hudson securities to investors without disclosing its short position. When the securities lost value, Goldman made a $1.7 billion gain at the direct expense of the clients to whom it had sold the securities.”
  • “In the case of Anderson, Goldman selected a large number of poorly performing assets for the CDO, took 40% of the short position, and then marketed Anderson securities to its clients. When a client asked how Goldman “got comfortable” with the New Century loans in the CDO, Goldman personnel tried to dispel concerns about the loans, and did not disclose the firm’s own negative view of them or its short position in the CDO.”
  • “In the case of Timberwolf, Goldman sold the securities to its clients even as it knew the securities were falling in value. In some cases, Goldman knowingly sold Timberwolf securities to clients at prices above its own book values and, within days or weeks of the sale, marked down the value of the sold securities, causing its clients to incur quick losses and requiring some to post higher margin or cash collateral. Timberwolf securities lost 80% of their value within five months of being issued and today are worthless. Goldman took 36% of the short position in the CDO and made money from that investment, but ultimately lost money when it could not sell all of the Timberwolf securities.
  • “In the case of Abacus, Goldman did not take the short position, but allowed a hedge fund, Paulson & Co. Inc., that planned on shorting the CDO to play a major but hidden role in selecting its assets. Goldman marketed Abacus securities to its clients, knowing the CDO was designed to lose value and without disclosing the hedge fund’s asset selection role or investment objective to potential investors. Three long investors together lost about $1 billion from their Abacus investments, while the Paulson hedge fund profited by about the same amount. Today, the Abacus securities are worthless.”

[update]

Goldman spokesman Michael DuVally returned a call for comment on the Subcommittee report and referral to the DOJ. His statement, by email:

“Margie,

As discussed.

Michael

General response:

“While we disagree with many of the conclusions of the report, we take seriously the issues explored by the Subcommittee. We recently issued the results of a comprehensive examination of our business standards and practices and committed to making significant changes that will strengthen relationships with clients, improve transparency and disclosure and enhance standards for the review, approval and suitability of complex instruments.”

On the issue of GS allegedly giving misleading testimony:

“The testimony we gave was truthful and accurate and this is confirmed by the Subcommittee’s own report. The report references testimony from Goldman Sachs witnesses who repeatedly and consistently acknowledged that we were intermittently net short during 2007.  We did not have a massive net short position because our short positions were largely offset by our long positions, and our financial results clearly demonstrate this point.””

More later

Free Speech and Attacking Social Security

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Applying lessons from some of the history below, up top:

  • Regardless of the individual views of ordinary Republicans as citizens, the national party apparatus of the GOP has never ceased trying to undo Social Security;
  • The GOP-and-finance-sector daisy chain indicated below, potent as it has been in some elections, is dwarfed by current use of the federal budget deficit as a pretext to gut Social Security.

As to the budget deficit, Think Progress posted a good overview of the size of U.S. military spending. Genuine, sober-minded fiscal conservatives would be looking there for cuts.

Instead, the self-proclaimed deficit hawks of the right have, for at least the past twenty years, taken other political routes:

“USA Next,” a political interest group formerly called “United Seniors Association,” targeted seniors by hiring the same people who made the infamous Swift Boat ads of the 2004 election to make ads attacking the American Association of Retired Persons (AARP) in 2005. The hiring was reported in the New York Times Feb. 21, 2005:

“Taking its cues from the success of last year’s Swift boat veterans’ campaign in the presidential race, a conservative lobbying organization has hired some of the same consultants to orchestrate attacks on one of President Bush’s toughest opponents in the battle to overhaul Social Security.

“The lobbying group, USA Next, which has poured millions of dollars into Republican policy battles, now says it plans to spend as much as $10 million on commercials and other tactics assailing AARP, the powerhouse lobby opposing the private investment accounts at the center of Mr. Bush’s plan.”

As we know, the plan of private (Wall Street) investment accounts as a substitute for Social Security went nowhere. Public opinion of the plan was one problem; of Mr. Bush another; of Wall Street and the stock market a third.

But the campaign launched against Social Security in the blatant Bush years did not actually end.

“Though it is not clear how much money USA Next has in hand for the campaign–Mr. Jarvis will not say, and the group, which claims 1.5 million members, does not have to disclose its donors–officials say that the group’s annual budget was more than $28 million last year. The group, a membership organization with no age requirements for joining, has also spent millions in recent years vigorously supporting Bush proposals on tax cuts, energy and the Medicare prescription drug plan.

“So far, the groups dueling over Social Security have been relatively tame, but the plans by USA Next foreshadow what could be a steep escalation in the war to sway public opinion and members of Congress in the days ahead.” [emphasis added]

Make that years, and you’ve got yourself a prognostication.

As so often happens in these matters, the epicenter of evil in the known universe was northern Virginia, the hidey-hole of those gummint-hatin’ redneck-exploiting good ol’ boys who do their best to turn elections into foreordained conclusions while simultaneously turning the world of finance into a rodeo:

“To help set USA Next’s strategy, the group has hired Chris LaCivita, an enthusiastic former marine who advised Swift Vets and P.O.W.’s for Truth, formerly known as Swift Boat Veterans for Truth, on its media campaign and helped write its potent commercials. He earned more than $30,000 for his work, campaign finance filings show.

Officials said the group is also seeking to hire Rick Reed, a partner at Stevens Reed Curcio & Potholm, a firm that was hired by Swift Vets and was paid more than $276,000 to do media production, records show.

For public relations, USA Next has turned to Creative Response Concepts, a Virginia firm that represented both Swift Vets–the company was paid more than $165,000–and Regnery Publishing, the publisher of “Unfit for Command,” a book about Senator John Kerry’s military service whose co-author was John E. O’Neill, one of the primary leaders of Swift Vets.”

Chris LaCivita, for now somewhat submerged, is the political consultant perhaps most notable for making an anti-John Kerry ad that even Fox would not air. His firm LaCivita Consulting LLC is located in Richmond, Va.; his Advancing Strategies LLC in Midlothian. Stevens Reed Curcio is in the Washington, D.C., suburb of Alexandria, Va., as is Creative Response Concepts, Inc. Republicans for Choice (former advisor, Pres. Gerald R. Ford) and its PAC are or were headquartered at the same Eisenhower Avenue address, along with least one federal contractor, Logistics Applications, Inc.

As ever, an uneasy coalition of silk-stocking Wall Street-leaning Republicans, barking-dog demagogues, and the Christian right rubs shoulders together financially while fighting internally for market share, with the sincere losing every fight.

Filings for Creative Response Concepts during the Bush years were available only for 2000 and 2004—election years. Company basics: 2760 Eisenhower Av Ste 402, Alexandria, VA  22314; Pres. Gregory Mueller, Chairman Leif E. Noren, Dir. Justin D. Dudley, Dir. Curtis J. Herge.

Herge was also Registered Agent (RA), the person legally empowered to receive mail and papers for the firm. Herge’s previous business at 8201 Greensboro Drive, is located in McLean, Va., along with the more recent Elm Street address c/o Herge, Sparks & Christopher LLP, now partly morphed into the more respectable Sparks & Craig LLP.

Creative Response Concepts (CRC) had another location at 1150 S. Washington St, Alexandria 22314, where one of its neighbors was the International Brain Injury Association, which also keeps turning up in the same neighborhoods, the American branch of the association at 8201 Greensboro. (Herge is now in private practice as an attorney.)

The Virginia corporate database system listed only one officer for Stevens Reed Curcio & Potholm, RA Greg Stevens. (Stevens died in 2005 at age 58.) Stevens Reed began filing in August 1993, suggesting that its raisonne d’etre, or anyway its donor base, was connected to the hated Clinton presidency. The firm’s web site listed Greg Stevens as founder and president, with partners Rick Reed, Paul Curcio, and Erik Potholm. Potholm’s clients have included Wal-Mart, former congressman Tom Davis, and health insurance company Anthem BCBS. Anthem has since merged with WellPoint, where GWBush uncle William H. T. Bush was a director. Clients of Betsy Vonderheid, Director of Advertising, included Vornado Realty.

The entity names, be it noted, have changed with some frequency over the years. But the key personnel kept being re-mixed. Before the Bush years, Greg Stevens had already surfaced in connection with an entity called “Citizens for the Republic Education Fund,” which in 1996 raised some $2 million for GOP interests through a public relations campaign. As reported by the Annenberg Center, the tax-exempt group was among other things a client of Triad Management Services, with Stevens as a consultant. ‘Citizens’ was incorporated in D.C. by Lyn Nofziger June 20, 1996. Contact information included Angela Buchanan–sister of sometime pundit and presidential candidate Pat Buchanan–6862 Elm St, Ste 210, McLean 22101.

In 1995 Stevens worked with another likeminded group, this one called “Coalition for Our Children’s Future,” also with hdtrs address at 8201 Greensboro Drive, McLean. One of the political consultants working for the Coalition was Houston-based Denis Calabrese. The source of the funds ($700,000) for the 1996 ads was kept confidential by agreement with the donor. J. Curtis Herge was also listed as a principal in the ‘Coalition,’ which began in 1995 but went dormant until weeks before the 1996 election and then ran ads–apparently without the knowledge or consent of some principals–spending $4 million in 1995 and over $700,000 in 1996.

The Coalition for Our Children’s Future is among almost innumerable entities listed as ‘Terminated’ in the Virginia state database system: former address 7704 Leesburg Pike, Falls Church 22043; Robert P. Odell Jr, P/T; J. Curtis Herge, Secretary. Herge was also given as the RA, current at the 6862 Elm address, old at the 8201 Greensboro address (as of 10-23-97). Annual reports were filed through 2001; the firm dissolved apparently owing the Commonwealth of Virginia $35 (“Fee delinquent”).

It should be obvious from the numbers included above that such networks developed sub rosa in the nineties, reached mega-proportions in electoral influence in 2000 and 2004, went farther than ever—unsuccessfully—in 2008, and will, to say the least, try again (on steroids) in 2012. Referring to this mutual-back-scratching, one-hand-washes-the-other, one-face-to-the-public and another-to-each-other fundraising and propaganda mill populated by slick lobbyists and corporate mouthpieces as “free speech” is like using some sort of code to which only a selected few have been given the key.

Meanwhile, the fact that groups with names like ‘coalition for children’s future’ turn out to be aimed against organized labor—and to be funded by interests invested in destroying organized labor–goes almost completely unreported in the political press in the nation’s capital.

Until it’s too late.

To be continued