More ’sickening’ truths about torture soon to be revealed

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David Edwards and Muriel Kane
June 11, 2009 - Raw Story

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A crucial CIA Inspector General's report from May 2004 is expected to reveal some long-hidden truths about the Bush administration's use of torture.

According to MSNBC's Rachel Maddow, "This report is sort of the big kahuna in terms of what we have been waiting to see from the government's own files on torture. That report, which is long and has been described by people who have seen it as 'sickening,' apparently stopped the torture program in its tracks."

Senator Sheldon Whitehouse (D-RI) recently warned in a speech on the floor of the Senate that almost everything we think we know about the Bush administration's torture program is wrong.

"There has been a campaign of falsehood about this whole sorry episode," Whitehouse stated. "We've been misled about nearly every aspect of this program. … Measured against the information I've been able to get access to, the storyline that we have been led to believe … is false in every one of its dimensions."

Maddow then asked Newsweek's Michael Isikoff whether the report will fill in the mission information to which Whitehouse referred.

"We don't know how complete the disclosures are going to be," Isikoff cautioned. "Will we see the complete unredacted report? That is the key question here."

"There are three key questions to look for," Isikoff explained. "Were there harsh interrogations that began before the … legal authorizations? … Did they go beyond what was authorized? … Did it go beyond just finding out about possible plots against the United States to provide other information, such as supplying possible evidence that could be used to justify the war in Iraq?"

Isikoff noted that there are footnotes in the torture memos already released which "quote from the Inspector General's report that what was actually done went beyond what was authorized — that how waterboarding was conducted, the frequency with which it was conducted, and the manner in which it was conducted was beyond what the CIA told the Justice Department it was going to do when the Justice Department authorized the technique."

Isikoff emphasized, however, that almost none of this information is being released voluntarily. It's being slowly pried out through Freedom of Information Act requests, most of them filed by the ACLU, and "it's become trench warfare — document by document."

"The CIA and the intelligence community has pushed back hard," Isikoff stressed. "People in the intelligence community never wanted this stuff out to begin with."

This video is from MSNBC's Rachel Maddow Show, broadcast June 10, 2009:

http://rawstory.com/08/news/2009/06/11/maddow-more-sickening/

Cheney still in crosshairs of Senate Intelligence probe

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John Byrne
June 10, 2009 - Raw Story

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Former Vice President Dick Cheney isn't out of the woods yet for his role in briefing Congress on the Bush Administration's secretive harsh interrogation program.

In a carefully worded statement to Mother Jones' David Corn for an article Wednesday, a spokesman for Senate Intelligence Committee Chairman Dianne Feinstein indicated that the conduct of individuals who briefed Congressmembers on the CIA's interrogation program is under review.

"The Senate intelligence committee's study includes an examination of how the committee was briefed on the CIA's detention and interrogation program," Phil LaVelle, a Feinstein spokesperson, was quoted as saying. "This includes briefings of committee leadership, and is not limited by who conducted the briefing."

The Intelligence Committee's probe has been ongoing — quietly — since March.

But "there have been no public hearings," Corn writes. "In fact, Feinstein has made no commitment to hold hearings on this subject or to release a public report when the investigation is completed. The committee said in March that its investigation would take about a year.

"The committee has restricted this part of its review and is not examining briefings provided to other committees–such as the House intelligence committee–according to a congressional source familiar with the probe." he adds. "But given that Cheney briefed two senior members of the Senate intelligence panel, the committee can review what Cheney told Roberts and Rockefeller about the interrogation program and evaluate whether his assertions were supported by the facts. That is, the Cheney briefing is fair game for the Senate investigators.

Feinstein's spokesman declined to comment on whether the committee was investigating the 2005 briefing Cheney gave Senate Intelligence Committee members.

"The committee is not confirming or denying any specific aspects of its inquiry, including the witnesses it has or will be interviewing," Corn avers.

Tying Obama to Bush's Budget Mess

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Some people say that George W. Bush didn't solve any national problems during his eight years in office, but that's not exactly right.

Robert Parry
June 10, 2009 - Consortium News

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In 2001, Federal Reserve Chairman Alan Greenspan said the Fed might have trouble influencing interest rates if the entire federal debt were paid off – an event that budget projections then forecast. Nailed that one, ex-President Bush can declare.

Indeed, no one will have to worry about the "problem" of a completely repaid federal debt anytime soon, if ever.  Before leaving office, Bush had transformed what was projected in 2001 to be a $848 billion surplus for fiscal 2009 into a $1 trillion deficit, nearly a $2 trillion swing from deep black to bright red, according to Congressional Budget Office figures.

But one of the ironies of the early Obama administration is that the Republicans and their many allies in the U.S. news media have succeeded in shifting much of the blame for the ocean of red ink onto Barack Obama, leading the new President to scale back programs and to scramble politically. A recent Gallup poll found 51 percent disapproving of Obama's handling of federal spending.

That GOP success is a reflection of the Right's massive investment in media over the past several decades and the audacity of Republicans to tick off talking points regardless of reality. A steady propaganda barrage, especially when it's ineffectively countered, can create perceptions that influence the electorate and thus constrain political options.

If Americans think Obama is responsible for the massive deficits, they will be less willing to support his recommendations for addressing a host of pressing problems, from the environment to health care to the economy.

And to the degree they forget or don't know about Bush's role in the deficit problem, they are more likely to turn back to Republicans, the same people who enabled Bush with his extravagant tax cuts and open-ended wars to chart the nation into that red-ink ocean.

So, it is useful to read Wednesday's New York Times analysis of the CBO budget projections, which revealed that Obama's stimulus plan and other domestic programs account for "only a sliver" of the deficits, about 10 percent of the projected $1.2 trillion deficit for 2009.

The Times analysis by David Leonhardt blamed 37 percent of the $2 trillion swing from surplus to deficit on the business cycle, including the bursting stock-market bubbles and related recessions. The Times traced about 33 percent of the deficit swing to legislation signed by Bush, including his signature tax cuts and his Medicare prescription drug plan.

Though Bush is now out of office, continuation of other of his key initiatives, such as the Wall Street bailout and the Iraq War, contributed significantly to the deficit under Obama, the Times found.

"Mr. Obama's main contribution to the deficit is his extension of several Bush policies, like the Iraq War and tax cuts for households making less than $250,000," the Times reported. "Such policies – together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama – account for 20 percent of the swing."

Obama's stimulus bill, signed in February, accounted for 7 percent of the deficit expansion, and his other early programs, including health care, education and energy, added 3 percent, the Times said. So, the tally would indicate that Bush's policies contributed to 53 percent of the 2009 deficit swing compared to 10 percent from Obama's plans.

Yet the Republicans have scored some important political points by repositioning themselves as the party of fiscal responsibility and tagging Obama as a spendthrift.

Ironically, too, in his efforts to show bipartisan continuity with the Bush administration – especially on the Wall Street financial crisis – Obama has opened himself to GOP attack lines.

Not the First Time

This is surely not the first time that the Republicans have relied on the powerful right-wing news media and the careerists in the mainstream press to turn political reality inside out.

One telling example was how GOP congressmen and right-wing operatives in 1999-2000 linked Vice President Al Gore to the compromising of U.S. nuclear secrets to China, when the secrets were compromised years earlier under Ronald Reagan. [See Consortiumnews.com's "How America Fell."]

But a striking fact of the early Obama era is that – with only a few exceptions – Washington has changed very little, systemically.

The right-wing media remains the dominant megaphone; the same inept talking heads fill the air on CNN, CNBC and – for much of the day – on MSNBC; Republicans will say or do anything to sabotage a Democratic administration; and Democrats are still mesmerized by the pleasant mirage of "bipartisanship."

The hard reality for Obama, the Democrats and the progressives is that as long as they ignore these systemic features, especially the power of America's right-tilted media, the Republicans will always have the edge in framing the issues – and thus limiting the choices for the future.

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Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. He is the author of "Neck Deep: The Disastrous Presidency of George W. Bush".

The GOP’s 100-Reactor/Trillion-Dollar Energy Plan Goes Radioactive

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Harvey Wasserman
June 11, 2009 - CommonDreams.org

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As the prospective price of new reactors continues to soar, and as the first "new generation" construction projects sink in French and Finish soil, Republicans are introducing a bill to Congress demanding 100 new nuclear reactors in the US within twenty years. It explicitly welcomes "alternatives" such as oil drilling in the Arctic National Wildlife Refuge and "clean coal." Though it endorses some renewables such as solar and wind power, it calls for no cap on carbon emissions.

According to the New York Times, this is the defining GOP alternative to a Democratic energy plan headed for a House vote later this month.

But niggling questions like who will pay for these reactors, who will insure them, where will the fuel come from, where will waste go and who will protect them from terrorists are not on the agenda. Given recent certain-to-prove-optimistic estimates of approximately $10 billion per reactor, the plan envisions a trillion-plus dollar commitment to a newly nuke-centered nation.

With this proposed legislation the GOP makes atomic energy the centerpiece of its strategy to deal with climate change.

Nuclear power requires energy-intensive activities such as uranium mining, milling, fuel enrichment, plus other carbon expenditures for plant construction, waste management and more. Reactors also convert buried uranium ore into huge quantities of heat, much of which becomes hot water and steam emitted into the environment. Reactors in France and elsewhere have been forced to shut because adjacent rivers have been taken to 90 degrees Farenheit by hot water dumped from reactor cooling systems.

None of this troubled GOP hearings this week on the future of atomic energy. There were no answers to how new reactors would be insured. Since 1957 the federal treasury has been the underwriter of last resort for potential reactor disasters. Renewed in the 2005 Bush energy plan, the commitment applies to all new reactors.

So reactors licensed to operate through 2057---as would be virtually certain under the GOP plan---would extend to a full century the atomic industry's inability to cover its own risks. Neither the Obama Administration nor the GOP has presented detailed plans for dealing with such disasters, or explained how they would be paid for.

Despite the GOP's endless focus on the terror attacks of 9/11/2001, no significant structural upgrades have been made to protect the currently licensed 104 US reactors from an air attack. The new reactors will be required to demonstrate an ability to resist a jet crash, but testing that requirement remains an open issue.

The ability to fuel this new fleet of reactors remains questionable. Reprocessing used fuel into re-usable Mixed Oxide rods has proven dirty, expensive and dangerous.

The initial experience with building new reactors runs parallel. As reported in the New York Times and elsewhere, French-financed construction projects at Flamanville, France, and at Okiluoto in Finland have soared hugely over budget and behind schedule. Much of the economically catastrophic experience endured by utilities and rate payers in building the first generation of reactors in the 1960s-1990s appears to be repeating itself with even bigger deficits. The French government's front-group Areva, which is building the new plants, has sunk into serious financial and political chaos, with potentially devastating implications for this much-touted "new generation" technology.

Recent radioactive leaks in Vermont and Illinois have underscored bitter disputes over re-licensing the 104 "first generation" US reactors. Some could now operate past the 60-year mark, even though most were originally designed to operate just 30, and all have serious issues ranging from frequent leaks to structural decay, unworkable evacuation plans and much more.

Meanwhile, with the apparent cancellation of the proposed Yucca Mountain nuclear waste dump, the industry is no closer to dealing with its radioactive waste than it was 50 years ago.

None of which seems to daunt the industry or the Nuclear Regulatory Commission, which has yet to turn down a proposed re-licensing. Two states---Florida and Georgia---have now passed rate hikes aimed at funding new reactor construction. And Obama's Department of Energy may soon dole out $18.5 billion in construction loan guarantees put in place by the Bush 2005 Energy Plan. The DOE has identified four prime candidates for the money.

Nonetheless, since 2007 reactor opponents have three times defeated proposals for $50 billion in loan guarantees for new reactor construction. There is no indication from Wall Street and what's left of the private banking community that without heavy government guarantees, investments in nuclear power plants are at all attractive.

But while billing itself as the party of free enterprise---especially when it comes to health care---the GOP has made itself the unabashed champion of a technology that can't raise private capital without taxpayer backing, can't get private insurance, can't manage its wastes, and shows no sign of offering a meaningful solution to the problem of carbon emissions.

What the nuclear power industry does seem to have, however, is unlimited funding to push its product in the corporate media and Congress. This latest GOP proposal for 100 new nukes may not fly in this House session.

Sadly, Democratic-sponsored legislation is not nuke-free. The situation in Congress remains fluid and unpredictable, often changing from day to day. Various aspects of bills supported by various Democrats include hidden subsidies, disguised loan guarantees, counting nuclear power as "green" in proposed renewable portfolio standards, backdoor handouts and more. Sometimes the boosts are buried in obscure corners of sub-clauses that border on the indecipherable.

But surface they do, again and again. Thus far the anti-nuclear movement has done a remarkable job of blocking the worst of them. Continuing to do that will require eternal vigilance, endless grassroots action and the steadfast belief that in the long run, our species has the will and foresight to somehow avoid radioactive self-extinction.

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Harvey Wasserman's SOLARTOPIA! OUR GREEN-POWERED EARTH, A.D. 2030, is at www.solartopia.org. He is senior advisor to Greenpeace USA and the Nuclear Information & Resource Service, and writes regularly for www.freepress.org, where this article first appeared

Zen 'Light, Sweet Crude' Moment of the Day

Clifford Krauss of the New York Times reported recently, gas prices have risen 41 days in a row, and yet the price at the pump is still "lagging behind the increase in the price of oil."

It's Official -- The Era of Cheap Oil Is Over

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Energy Department Changes Tune on Peak Oil

Michael T. Klare
June 11, 2009 - Tomgram

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Every summer, the Energy Information Administration (EIA) of the U.S. Department of Energy issues its International Energy Outlook (IEO) -- a jam-packed compendium of data and analysis on the evolving world energy equation. For those with the background to interpret its key statistical findings, the release of the IEO can provide a unique opportunity to gauge important shifts in global energy trends, much as reports of routine Communist Party functions in the party journal Pravda once provided America's Kremlin watchers with insights into changes in the Soviet Union's top leadership circle.

As it happens, the recent release of the 2009 IEO has provided energy watchers with a feast of significant revelations. By far the most significant disclosure: the IEO predicts a sharp drop in projected future world oil output (compared to previous expectations) and a corresponding increase in reliance on what are called "unconventional fuels" -- oil sands, ultra-deep oil, shale oil, and biofuels.

So here's the headline for you: For the first time, the well-respected Energy Information Administration appears to be joining with those experts who have long argued that the era of cheap and plentiful oil is drawing to a close. Almost as notable, when it comes to news, the 2009 report highlights Asia's insatiable demand for energy and suggests that China is moving ever closer to the point at which it will overtake the United States as the world's number one energy consumer. Clearly, a new era of cutthroat energy competition is upon us.

Peak Oil Becomes the New Norm

As recently as 2007, the IEO projected that the global production of conventional oil (the stuff that comes gushing out of the ground in liquid form) would reach 107.2 million barrels per day in 2030, a substantial increase from the 81.5 million barrels produced in 2006. Now, in 2009, the latest edition of the report has grimly dropped that projected 2030 figure to just 93.1 million barrels per day -- in future-output terms, an eye-popping decline of 14.1 million expected barrels per day.

Even when you add in the 2009 report's projection of a larger increase than once expected in the output of unconventional fuels, you still end up with a net projected decline of 11.1 million barrels per day in the global supply of liquid fuels (when compared to the IEO's soaring 2007 projected figures). What does this decline signify -- other than growing pessimism by energy experts when it comes to the international supply of petroleum liquids?

Very simply, it indicates that the usually optimistic analysts at the Department of Energy now believe global fuel supplies will simply not be able to keep pace with rising world energy demands. For years now, assorted petroleum geologists and other energy types have been warning that world oil output is approaching a maximum sustainable daily level -- a peak -- and will subsequently go into decline, possibly producing global economic chaos. Whatever the timing of the arrival of peak oil's actual peak, there is growing agreement that we have, at last, made it into peak-oil territory, if not yet to the moment of irreversible decline.

Until recently, Energy Information Administration officials scoffed at the notion that a peak in global oil output was imminent or that we should anticipate a contraction in the future availability of petroleum any time soon. "[We] expect conventional oil to peak closer to the middle than to the beginning of the 21st century," the 2004 IEO report stated emphatically.

Consistent with this view, the EIA reported one year later that global production would reach a staggering 122.2 million barrels per day in 2025, more than 50% above the 2002 level of 80.0 million barrels per day. This was about as close to an explicit rejection of peak oil that you could get from the EIA's experts.

Where Did All the Oil Go?

Now, let's turn back to the 2009 edition. In 2025, according to this new report, world liquids output, conventional and unconventional, will reach only a relatively dismal 101.1 million barrels per day. Worse yet, conventional oil output will be just 89.6 million barrels per day. In EIA terms, this is pure gloom and doom, about as deeply pessimistic when it comes to the world's future oil output capacity as you're likely to get.

The agency's experts claim, however, that this will not prove quite the challenge it might seem, because they have also revised downward their projections of future energy demand. Back in 2005, they were projecting world oil consumption in 2025 at 119.2 million barrels per day, just below anticipated output at that time. This year -- and we should all theoretically breathe a deep sigh of relief -- the report projects that 2025 figure at only 101.1 million barrels per day, conveniently just what the world is expected to produce at that time. If this actually proves the case, then oil prices will presumably remain within a manageable range.

In fact, however, the consumption part of this equation seems like the less reliable calculation, especially if economic growth continues at anything like its recent pace in China and India. Indeed, all evidence suggests that growth in these countries will resume its pre-crisis pace by the end of 2009 or early 2010. Under those circumstances, global oil demand will eventually outpace supply, driving up prices again and threatening recurring and potentially disastrous economic disorders -- possibly on the scale of the present global economic meltdown.

To have the slightest chance of averting such disasters means seeing a sharp rise in unconventional fuel output. Such fuels include Canadian oil sands, Venezuelan extra-heavy oil, deep-offshore oil, Arctic oil, shale oil, liquids derived from coal (coal-to-liquids or CTL), and biofuels. At present, these cumulatively constitute only about 4% of the world's liquid fuel supply but are expected to reach nearly 13% by 2030. All told, according to estimates in the new IEO report, unconventional liquid production will reach an estimated 13.4 million barrels per day in 2030, up from a projected 9.7 million barrels in the 2008 edition.

But for an expansion on this scale to occur, whole new industries will have to be created to manufacture such fuels at a cost of several trillion dollars. This undertaking, in turn, is provoking a wide-ranging debate over the environmental consequences of producing such fuels.

For example, any significant increase in biofuels use -- assuming such fuels were produced by chemical means rather than, as now, by cooking -- could substantially reduce emissions of carbon dioxide and other greenhouse gases, actually slowing the tempo of future climate change. On the other hand, any increase in the production of Canadian oil sands, Venezuelan extra-heavy oil, and Rocky Mountain shale oil will entail energy-intensive activities at staggering levels, sure to emit vast amounts of CO2, which might more than cancel out any gains from the biofuels.

In addition, increased biofuels production risks the diversion of vast tracts of arable land from the crucial cultivation of basic food staples to the manufacture of transportation fuel. If, as is likely, oil prices continue to rise, expect it to be ever more attractive for farmers to grow more corn and other crops for eventual conversion to transportation fuels, which means rises in food costs that could price basics out of the range of the very poor, while stretching working families to the limit. As in May and June of 2008, when food riots spread across the planet in response to high food prices -- caused, in part, by the diversion of vast amounts of corn acreage to biofuel production -- this could well lead to mass unrest and mass starvation.

A Heavy Energy Footprint on the Planet

The geopolitical implications of this transformation could well be striking. Among other developments, the global clout of Canada, Venezuela, and Brazil -- all key producers of unconventional fuels -- is bound to be strengthened.

Canada is becoming increasingly important as the world's leading producer of oil sands, or bitumen -- a thick, gooey, viscous material that must be dug out of the ground and treated in various energy-intensive ways before it can be converted into synthetic petroleum fuel (synfuel). According to the IEO report, oil sands production, now at 1.3 million barrels a day and barely profitable, could hit the 4.4 million barrel mark (or even, according to the most optimistic scenarios, 6.5 million barrels) by 2030.

Given the IEA's new projections, this would represent an extraordinary addition to global energy supplies just when key sources of conventional oil in places like Mexico and the North Sea are expected to suffer severe declines. The extraction of oil sands, however, could prove a pollution disaster of the first order. For one thing, remarkable infusions of old-style energy are needed to extract this new energy, huge forest tracts would have to be cleared, and vast quantities of water used for the steam necessary to dislodge the buried goo (just as the equivalent of "peak water" may be arriving).

What this means is that the accelerated production of oil sands is sure to be linked to environmental despoliation, pollution, and global warming. There is considerable doubt that Canadian officials and the general public will, in the end, be willing to pay the economic and environmental price involved. In other words, whatever the IEA may project now, no one can know whether synfuels will really be available in the necessary quantities 15 or 20 years down the road.

Venezuela has long been an important source of crude oil for the United States, generating much of the revenue used by President Hugo Chávez to sustain his social experiments at home and an ambitious anti-American political agenda abroad. In the coming years, however, its production of conventional petroleum is expected to fall, leaving the country increasingly reliant on the exploitation of large deposits of bitumen in the eastern Orinoco River basin. Just to develop these "extra-heavy oil" deposits will require significant financial and energy investments and, as with Canadian oil sands, the environmental impact could be devastating. Nevertheless, successful development of these deposits could prove an economic bonanza for Venezuela.

The big winner in these grim energy sweepstakes, however, is likely to be Brazil. Already a major producer of ethanol, it is expected to see a huge increase in unconventional oil output once its new ultra-deep fields in the "subsalt" Campos and Santos basins come on-line. These are massive offshore oil deposits buried beneath thick layers of salt some 100 miles off the coast of Rio de Janeiro and several miles beneath the ocean's surface.

When the substantial technical challenges to exploiting these undersea fields are overcome, Brazil's output could soar by as much as three million barrels per day. By 2030, Brazil should be a major player in the world energy equation, having succeeded Venezuela as South America's leading petroleum producer.

New Powers, New Problems

The IEO report hints at other geopolitical changes occurring in the global energy landscape, especially an expected stunning increase in the share of the global energy supply consumed in Asia and a corresponding decline by the United States, Japan, and other "First World" powers. In 1990, the developing nations of Asia and the Middle East accounted for only 17% of world energy consumption; by 2030, that number, the report suggests, should reach 41%, matching that of the major First World powers.

All recent editions of the report have predicted that China would eventually overtake the United States as number one energy consumer. What's notable is how quickly the 2009 edition expects that to happen. The 2006 report had China assuming the leadership position in a 2026-2030 timeframe; in 2007, it was 2021-2024; in 2008, it was 2016-2020. This year, the EIA is projecting that China will overtake the United States between 2010 and 2014.

It's easy enough to overlook these shifting estimates, since the reports don't emphasize how they have changed from year to year. What they suggest, however, is that the United States will face ever fiercer competition from China in the global struggle to secure adequate supplies of energy to meet national needs.

Given what we have learned about the dwindling prospects for adequate future oil supplies, we are sure to face increased geopolitical competition and strife between the two countries in those few areas that are capable of producing additional quantities of oil (and undoubtedly genuine desperation among many other countries with far less resources and power).

And much else follows: As the world's leading energy consumer, Beijing will undoubtedly play a far more critical role in setting international energy policies and prices, undercutting the pivotal role long played by Washington. It is not hard to imagine, then, that major oil producers in the Middle East and Africa will see it as in their interest to deepen political and economic ties with China at the expense of the United States. China can also be expected to maintain close ties with oil providers like Iran and Sudan, no matter how this clashes with American foreign policy objectives.

At first glance, the International Energy Outlook for 2009 hardly looks different from previous editions: a tedious compendium of tables and text on global energy trends. Looked at another way, however, it trumpets the headlines of the future -- and their news is not comforting.

The global energy equation is changing rapidly, and with it is likely to come great power competition, economic peril, rising starvation, growing unrest, environmental disaster, and shrinking energy supplies, no matter what steps are taken. No doubt the 2010 edition of the report and those that follow will reveal far more, but the new trends in energy on the planet are already increasingly evident -- and unsettling.

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Michael T. Klare is a professor of peace and world security studies at Hampshire College in Amherst, Massachusetts, and the author of "Rising Powers, Shrinking Planet: The New Geopolitics of Energy" and "Blood and Oil".

Pentagon Travel Policies Criticized by Watchdogs

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Ann Scott Tyson 
June 11, 2009 - Washington Post

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Pentagon personnel took more than 22,000 trips paid for by foreign countries, private companies and other nongovernmental sources over the past decade, raising conflict-of-interest concerns, according to watchdog groups that yesterday released the first public database of such travel.

The trips, which took place from 1998 to 2007, cost at least $26 million and often involved companies or governments paying for travel by defense officials who were in a position to influence purchasing decisions that could benefit those footing the bill, according to a year-long investigation of ethics documents by the Center for Public Integrity and Northwestern University's Medill School of Journalism.

Defense officials say the travel was legal and took place in conformity with existing regulations, but those leading the investigation said it created relationships that had the potential to distort Pentagon spending and therefore should be curtailed.

"The Pentagon itself should be paying for these trips," said Bill Buzenberg, executive director of the Center for Public Integrity. He described the travel as being "riddled with conflicts of interest."

For example, he said, the biggest source of free travel was the medical industry, which funded about 8,700 trips worth $10 million for military doctors, pharmacists and others involved with the Pentagon's purchases of prescription drugs.

In one case, the investigation found that an Army doctor took at least 15 trips worth $13,000 to places such as Florida and Arizona that were paid for by the medical technology company Medtronic, and then wrote a journal article that overstated the benefits of a drug sold by Medtronic to treat bone injuries.

Foreign governments paid for 1,500 trips worth about $2.6 million. In one case in 2005, a senior official at the Defense Security Cooperation Agency, the Pentagon body responsible for approving weapons purchases by foreign governments, took his wife on a $24,000, eight-day trip to Saudi Arabia paid for by a Saudi prince. The prince was a commander of the Saudi national guard, and from 2003 to 2006 the Saudi government was involved in billions of dollars in weapons purchases through DSCA programs.

Another large category involved manufacturers of retail goods -- such as Nike, Sony and Mattel -- that paid about $470,000 for 500 trips, many of them by military personnel in charge of purchasing for outlets on military bases. The trips included thousands of jaunts to vacation destinations such as Honolulu, Paris and Rio de Janeiro, with spouses of defense personnel taking part in hundreds of such trips, the investigation found.

Pentagon officials said the trips were necessary, saved taxpayer money, and in the case of foreign governments were customary and if refused could have caused offense, according to the study.

"When we visit other countries at their invitation, it is common for the host country to pay for ground transportation, local security needs and officially hosted meals for the principal and perhaps one or two staff members," said Capt. John Kirby, a spokesman for the Joint Chiefs of Staff. "We do the same here in the U.S. when foreign military dignitaries accept our invitation to visit," he said, adding: "All costs either expended or accepted by the U.S. government for these trips are approved."

Although acknowledging that some outside-funded travel may be beneficial, Buzenberg and others involved with the research said it has the potential to generate unnecessary spending of taxpayer money and should at a minimum be opened to public scrutiny.

"The real point of this is to shed light on a little-known practice," said Ellen Shearer, director of Medill's Washington Program. The probe into Pentagon travel followed a similar investigation that turned up $55 million in lobbyist-funded congressional travel and led to rule changes in 2007.

What to do with enemy prisoners?

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Richard Reeves – Yahoo News

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On Sept. 14, 1948, Capt. Kenneth Slaker of Lincoln, Neb., was making his sixth flight as a Berlin Airlift pilot, bringing food and fuel to the World War II enemy capital, which was blockaded on land and on rivers by the army of the Soviet Union. The United States Air Force, along with Great Britain's Royal Air Force, was trying to keep alive more than 2 million people in West Berlin, which was surrounded by East Germany and hundreds of thousands of soldiers of the Red Army.

Slaker knew the way. He had flown 50 bombing runs over Berlin in 1944. The briefing this day, as the Soviet-American alliance of the war was deteriorating into "Cold War," had ended:

"The Russians say they will shoot down any aircraft that strays out of the Berlin air corridor, and that captured airlift pilots will be treated as spies. ... If you should find yourself down in the Soviet Zone, we cannot say that you should turn yourself in, or that you should try to escape. There is no published or firm policy on this, and it would be up to you or your crew as to what action you would want to take."

Both engines of Slaker's C-47 cut out over East Germany's Harz mountains. He and his co-pilot, Lt. Clarence Steber of Memphis, Tenn., bailed out less a thousand feet above the ground. Slaker landed in a potato field and was unconscious for four or five hours. He heard German voices when he came to at dawn and crawled into a forest. Standing and turning, in great pain, he walked straight into an East German farmer.

"I'm an American pilot on the airlift," said Slaker, who spoke some German. The German, whose name was Rudolph Schnabel, reached into a coat pocket and showed the pilot the discharge papers he received after two years as a prisoner of war in an American camp outside Kearney, Neb.

"Americans were good to me," Schnabel said in workable English. "Americans capture me, save my leg." He pulled up his pants to show scars on his leg, which had been put back together in an American field hospital after he was run over by a tank. To make a long story short, Schnabel recruited friends and smuggled Slaker across the border to an American checkpoint in West Berlin.

It seems to me that there is something to be learned about the handling of the 240 enemy combatants at Guantanamo by remembering how we handled more than 400,000 prisoners of war inside the United States from 1942 to 1947.

Schnabel, a corporal in the Wehrmacht, the German Army, was one of more than 380,000 German prisoners of war kept in 511 POW camps in the United States. Most of Field Marshal Erwin Rommel's Afrika Korps ended up in Texas for years, working for local farmers, building roads, being paid 80 cents an hour to buy cigarettes and beer in their own canteens. Many Texans, in fact, resented the camps, built strictly according to international law and the Geneva Conventions for treatment of prisoners, calling them "Fritz Ritzes."

A few prisoners escaped -- it wasn't hard -- but were usually found on the main street of the nearest town, looking in store windows or at girls. Many later came back and became American citizens. When locals complained to the press or to their congressmen, according to "The Handbook of Texas": "The War Department defended its policy by pointing out the strategic reward of treating prisoners well: Enemy troops were surrendering rather than fighting."

There were also tens of thousands of Japanese and Italian POWs in the camps, mostly in the Midwest and South. More than a few American towns, Houlton, Maine, for one, invited the prisoners back in later years for joint celebrations of those years.

That is not to say that Americans are angels or that there was no mistreatment or torture or murdering of captured enemies in the past, particularly after American GIs saw Nazi concentration camps. West German investigators concluded in 1971 that tens of thousands of German prisoners were beaten and starved -- and 5,000 to 20,000 died -- in U.S. Army open air camps run near Cologne. Interestingly, those men were officially denied POW status and Geneva Conventions protections simply by reclassifying them as "disarmed enemy forces."

Now, of course, we have another name for some prisoners, "enemy combatants" -- and some argue that a couple of hundred of them are so dangerous they are not covered by any legal protections and that the United States is not strong enough to allow them to be tried or incarcerated on our own soil. Torture and illegal detention are not the tools of greatness, and if we could handle hundreds of thousands of uniformed prisoners, including 35 German generals and hundreds of fanatic U-Boat officers, we should be able to figure out how to deal with the bad guys and maybe some not-so-bad guys locked up all these years in Cuba.

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Richard Reeves is a syndicated columnist, he also has made award-winning documentary films. His books include "President Kennedy: Profile of Power."

Wall Street's False Armistice

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William Greider
June 11, 2009 - The Nation

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The best names in Wall Street banking have announced victory. Their crisis is over, back to business as usual. So why isn't the Obama White House celebrating this good news? Because this may not be a lasting peace for the president and his lieutenants. They are left standing in the mudhole of financial ruin, still surrounded by the failing economy and gradually losing their control over events. The leading bankers worked out a rare deal for themselves that essentially says to the government in Washington "heads we win, tails you lose."

If Jamie Dimon of JPMorgan Chase and Lloyd Blankfein of Goldman Sachs turn out to be correct about the financial crisis, their institutions emerge unscathed and restored to their old dominance over the US economy. Minus a few old rivals who went bust.

If the bankers are wrong, Barack Obama will be the big loser--compelled to rescue them again with still more public money. The big dogs of banking know this, so does the president. That's why he didn't throw his hat in the air when ten of the largest banks were allowed to pay back the emergency aid they received from the feds, some $68 billion. The financiers could thus declare themselves free and clear of the heavy hand of government meddling. Another triumph of free-market capitalism. A brilliant success for Goldman Sachs socialism. Barack Obama is holding the bag for what happens next.

There is rough justice in his predicament. The essential bet Obama made as president was to insist on a "voluntary" approach to rescuing the financial system, picking up the main policies launched by his predecessor. An odd-lot chorus of left and right critics (myself included) urged Obama to step up and employ the full force of government's emergency powers to take charge of the troubled system and direct their behavior. Heal the wounded banks or liquidate them, use government financing to insure the lending and investing needed to finance economic recovery. Don't leave it to the bank executives who will naturally take care of themselves first, maybe the country later.

Obama rejected that option. He was most reluctant to nationalize banks or to assert full control of those zombies that government has had to keep on life support. His political logic was obvious--maintain the appearance of temporary interventions to assist private enterprise and avoid any accusations of left-wing activism. The right called him a socialist anyway.

What are the odds Obama will win his bet? Not so hot right now, despite frequent pep talks from his economic advisers. If you think back to where this crisis began last year and what the authorities described then as their emergency response, big pieces are still missing in action.

Bush's treasury secretary, Hank Paulson, stampeded the Democratic Congress into providing $750 billion to soak up the rotten assets burdening the balance sheets of the largest banks. That plan was not pursued. The rotten assets are still largely there.

Obama's treasury secretary, Timothy Geithner, came up with an alternative approach--a complicated Monopoly game in which government would underwrite private investors to buy up the bad financial paper. That didn't happen either. The bankers let it be known they would not sell the stuff--not at discounted prices, not if it meant admitting the depths of their true losses.

Meanwhile, the government has also ducked the explosive question of derivatives--the casino-like "credit default swaps" that were very, very profitable for banks like JP Morgan Chase but became the time bomb threatening to blow up the entire system. The time bomb is still ticking. The bankers don't want give up that lucrative business. The Obama officials have not yet found the nerve to go against the bankers' desires.

Finally, there is the real economy where most Americans dwell. Obama's team is counting on a recovery in the second half of this year and his advisors keep predicting it with increasing confidence. The president is betting on that too. If his optimism is not confirmed by events, his problems multiply. The stock-market restoration celebrated by the bankers will begin to look like another financial bubble, driven by false hopes. Banking problems will worsen and they will he back for still more bailouts. And President Obama will have to take a second look at his happy assumptions. He might start by replacing some of the cheerleaders.

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William Greider is national affairs correspondent for The Nation. He is author of "Secrets of the Temple: How the Federal Reserve Runs the Country" and, most recently, "Come Home, America: The Rise and Fall (and Redeeming Promise) of Our Country."

The Wheels Are Coming Off Obama's and the Democrats' Recovery Program

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Where's the Anger?

Dave Lindorff
June 11, 2009 - Smirking Chimp
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My bank, a small regional institution that was not involved in sub-prime lending, and that was not a recipient of any TARP bailout money, cut off my home equity line of credit two weeks ago. They did it abruptly, with no notice--I only discovered it had happened when I tried to get a $500 advance from it to cover a payment I was making on my credit card. When I asked what was going on, the local branch manager informed me that "we are closing out a lot of credit lines while we reassess the value of houses in this region, which have been falling."

Now, in my particular case this was ridiculous. First of all, in our county, just north of Philadelphia, property prices have been static, but not falling. Furthermore, I had taken out a $160,000 mortgage 12 years ago, and it was now paid down to $60,000, and my balance on the home equity credit line was pretty small, so there was no way that we were in any way "under water"--in fact our equity in our home is much higher than it was 12 years ago.

The bank informed me that it was no problem. I could simply take out a new credit line, at no charge, and transfer the balance on the current line over to the new one. The only hitch: Instead of paying one percent over prime as I had been, I would be paying nearly 4 percent over prime on that balance, effectively doubling the cost of borrowing money.

This kind of thing is going on all across America, as banks that once spread around credit like a Philadelphia Democratic Party ward captain on Election Day, start tightening the screws on individuals and on small businesses.

While the Obama administration and the Treasury and the Fed are bulldozing funds into the coffers of the big banks, allegedly to get them to lend, the banks, from the largest to the smallest, are pulling back, afraid that borrowers will end up going bust on them. So much for economic stimulus efforts.

Not that borrowers have been lining up to get credit. Rather, most people, if they aren't simply going bankrupt or letting collection agents harass them for nonpayment, are trying to pay off credit card balances, and to cut expenses. In April, the savings rate of Americans, which has been negative in recent years as people tried to maintain living standards by borrowing on their credit cards and their homes, boosted their savings rate to a 14-year high of 5.7%. With official unemployment approaching 10%--a level it may hit this month--and real unemployment, as measured the way it used to be back in 1980, at closer to 20 percent, the majority of Americans not only have friends and family members who are unemployed or working part-time or at odd jobs involuntarily, but are worried about getting the axe themselves.

Meanwhile, the short-lived but incredibly expensive Obama rescue program, like a stagecoach at the end of a spaghetti western chase scene, is about to have the wheels fall off and go sliding over a cliff.

Bond yields and commodity prices are spiking as investors are waking up to the reality that massive borrowing by the US Treasury and massive printing of money by the Federal Reserve are going to lead to serious, perhaps even hyper inflation of the dollar. That in turn will force the Fed at some point, probably fairly soon, to raise interest rates, choking off not only those so-called economic "green shoots" that the cheerleading media have been citing as evidence that the recession is "bottoming out," but also even the recent stock market rise, which was being touted as one of those signs of economic "spring." On Tuesday, the interest rate or "yield" on the benchmark 10-year Treasury Bill jumped from 3.86% to 3.98 percent, and at one point went over 4%. Meanwhile, crude oil prices rose to over $70/barrel--an odd thing given the significant decline in demand caused by the global recession, but evidence that investors are anticipating a dollar slump and
aren't interested in supply and demand issues. Other commodity prices are also jumping for the same reason.

News that the big banks that were recipients of hundreds of billions of dollars in federal TARP loans were paying some of that money back to the government in order to be able to go back to their old ways was hardly reassuring. Those banks, like Bank of America and Citibank and Goldman Sachs, are not suddenly healthy. They have used accounting gimmicks to disguise the fact that they are what some economists have dubbed "zombies," with bad debts far in excess of their assets. And they will stay that way, while enriching their top managers with bloated salaries and "bonus" payments, while keeping credit tight and available only to the absolutely best corporate borrowers.

Obama's wars in Iraq and Afghanistan are going from bad to worse. There is no savings coming out of Iraq, as he had claimed would happen during last year's presidential campaign, and even if there were, it's all simply being transferred over to Iraq, where the US war effort is morphing from a small special forces operation into a full-scale war, destined to rival or even surpass the one in Iraq in terms of human and financial costs.

It's all coming unglued, just as the president puts forward his signature program--a health care reform scheme that is supposed to guarantee health care for everyone in the country.

Fat chance that one has. When America's economic house of cards finally really collapses, which looks to be starting to happen now, there simply won't be any cash in the till for health care.

So far, most Americans remain unaware of the scale of this crisis. The news media continue to tout shamelessly whatever signs of recovery they can detect, leaving all those whose personal finances are falling apart to feel like it's just their problem. Astonishingly, given the extent of the joblessness, there has been no national jobs march on Washington, no mass protests over the inadequacy of unemployment benefits, which reach only a minority of workers and are at levels far below what they were in prior recessions, no sit-down strikes at companies that are laying workers off or cutting salaries. The labor movement, such as it is at this point, is so wedded to Obama and the ruling Democrats, and so narrowly focused on trying to win passage of the seemingly doomed Employee Free Choice labor law reform bill, that the unions aren't trying to organize any mass actions to demand economic justice.

Maybe this public passivity in the face of rampant corporate welfare and corporate pillage will come to an end as unemployment benefits begin to run out and unemployment rates continue to climb.

The coach is heading for the cliff, but there is still time for people to jump out.

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Dave Lindorff is the author of Killing Time: an Investigation into the Death Row Case of Mumia Abu-Jamal. His new book of columns titled "This Can't be Happening!" is published by Common Courage Press. Lindorff's new book is "The Case for Impeachment," co-authored by Barbara Olshansky.

Is Israel's Aggression a Question of Pride?

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Ira Chernus
June 11, 2009 - Smirking Chimp

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Suppose Barack Obama really does want to herd the Israelis and Palestinians into serious, fruitful peace negotiations. How could he, or anyone, hope to get an agreement from these seemingly intractable enemies? Two researchers think they've found at least the beginning of an answer.

They asked nearly 4,000 Israelis and Palestinians what kind of peace deal they would accept. When they proposed "rational" bargains, like land for peace or sharing control of Jerusalem, the answers were generally negative. For both sides, the researchers found, the real sticking points are about values that people hold sacred. The tangible issues -- land, resources, political control, and the like -- are only symbols of these sacred values.

That's the best way for the U.S. to understand -- Israeli relations emerging over "natural growth" in the West Bank settlements. In itself it's a relatively small matter. "Natural growth" boosted the settler population by only 3 percent in 2007. Settler families that expand could easily move and find housing elsewhere, as all other expanding Israeli families do.

But the Obama administration has chosen this particular issue as the symbolic gesture Israel must make. And the Israeli government has responded by making "natural growth" the new symbol of all Israel's sacred values.

If they have to give up settlement expansion, what will they have to give up next, they ask. Jerusalem? The Jews' right to have their own state? Perhaps even the state of Israel itself? A people with such a long history of persecution might very well be afraid of losing everything the Jews hold dear. That fear could well explain their intransigence.

Except that's not quite what the research shows. For Israelis -- and for Palestinians -- the crux of the conflict is not about what values each side is afraid of losing and wants to protect. It's about how much they can force the other side to give up.

Most of the respondents on each side demanded a settlement "that involved their enemies making symbolic but difficult gestures." The respondents said they would make concessions as long as "the other side agreed to a symbolic sacrifice of one of its sacred values."

What sacred values? The researchers offered only examples of actions: Palestinians want an apology from the Jews, while Jews want recognition of Israel's right to exist. But what are the deeper values symbolized by these actions? And why is forcing sacrifice from the other side the crucial goal?

I don't know much about the Palestinians. But having grown up in an observant Jewish home, been active in Jewish community life, studied and taught the history of Judaism for decades, and had close relatives living in Israel for decades, I have a pretty good idea of the values driving the Jewish side of the conflict.

One of the key values, perhaps the most important of all, is national pride. And the most cherished symbol of pride is a victory over an enemy -- forcing it to give up something, anything, that symbolizes a loss of its pride.

I first saw this clearly on Yom Kippur 1973. I was in synagogue, observing the holiest day of the Jewish year, when I heard that the Egyptians had crossed the Suez Canal and attacked the Israeli troops stationed on the other side. My immediate response was something like this:

The Israelis are at the Suez Canal because they captured the Sinai Peninsula in the Six Day War in 1967. Why do the Egyptians want the Sinai back? It's a barren desert with no resources of any value. So I jumped to the conclusion (as a young man I was quicker to make assumptions about people I didn't know or understand) that the Egyptians did not want the land back. They wanted their national pride back. They had been humiliated in '67, and now they were going to recoup their self-esteem.

Therefore, I said, the Israelis can gain a huge advantage by withdrawing to the 1967 border, letting Egypt have the Sinai, throwing up their hands and crying "We lost!" They would have lost nothing of value. The Egyptians would be content. The way would be open for peace and security.

A few years later, the Israelis did give Sinai back to Egypt as part of a peace deal, and few Israelis expressed any regrets. How much easier to have done it on Yom Kippur 1973 and saved all that bloodshed.

But when I shared my logical solution with others in the synagogue, they simply didn't get it. I had no more success with my best friend, as I drove him to JFK Airport so he could fly back to Israel and rejoin his army unit for the Sinai war. To most Jews then, as to most Jews now, it was just obvious that when the enemy attacks, you fight back and inflict a loss on the attacker. That's how you bolster your national pride.

Is national pride a truly sacred value? Few Jews will say so directly. But for many Israeli Jews, and for most American Jews since the Six Day War, religion and nationalism have been intertwined. The theologian Emil Fackenheim fused them in his very influential idea that, since the Holocaust, God has given the Jews a new commandment that trumps all others: The Jewish people must survive as a distinct people, or else Hitler's goal of a Jew-free world will be realized.

Now Israel is the fundamental symbol of Jewish survival. So Israel's war victories have an "inescapably religious dimension" because they keep Israel safe from destruction.

But when I heard Fackenheim speak a few years after the Yom Kippur war, I discovered that his real belief was rather different. Someone in the audience asked a question: "You say that Israel must fight its enemies to insure Jewish survival. Yet what guarantee is there that Israel will win every war and always insure Jewish survival?"

The distinguished theologian gave this rather shocking reply: "There is no guarantee. Israel may indeed be destroyed. But the important point is that next time we will go down fighting."

There was no need to spell out the obvious implication: If we go down fighting, we can feel proud of ourselves, even if the last Jew disappears from the earth. Survival is not as sacred to us as pride, and pride comes from fighting the enemy. "Never Again" means never again will we let ourselves be shamefully herded to slaughter without resisting to the last woman and man.

This commitment has always been a central pillar of Israeli life. The widely admired, recently deceased Israeli author Amos Elon wrote (in his 1971 best-seller, The Israelis) that the memory of the Holocaust "explains the obsessive suspicion [and] the towering urge for self-reliance" that marks Israeli Jews. But he added that the same memory also plagues Israelis with "a suspended confusion, a neurotic constriction ... compounded by pangs of conscience, guilt and shame."

Israeli children are taught in school about "the disgraceful shame and cowardice" of all victims of anti-Semitic massacres in the Diaspora, to convince them that only a Jewish state with an invincible army could take away the shame. And Israelis exaggerate the degree of Jewish resistance to the Nazis because it "seems essential to their dignity as a group."

Elon knew that the theme of shame and pride lay at the very root of Zionism. In his biography of Theodore Herzl, he claimed that the father of the Zionist movement was motivated, above all, by "wounded pride" -- being denied what he thought was his rightful place among the elite of European society, simply because he was Jewish. Herzl was well aware that he was making national pride a sacred symbol. He urged the early Zionists to "turn the Jewish question into a question of Zion."

Even earlier, the first important Zionist writer, Leo Pinsker, told the Jews (in his famous tract "Self-Emancipation"): "You are foolish, because you expect of human nature something which it has never had -- humanity. You are also contemptible, because you have no real self-esteem and no national self-respect. National self-respect! Where can we find it?" Pinsker's answer, the answer of most Zionists ever since, was: only in a nation-state of our own.

Pinsker's words and Herzl's wounded pride reveal one root of the profound dilemma that has kept Israel trapped in a seemingly irrational cycle of intransigence and conflict for all these years. It is shameful and contemptible to let oneself fall victim to persecution, the argument goes. But Gentiles will always be persecutors. So Jews living in Diaspora will always feel shame and self-contempt. The mistake that Pinsker, Herzl and most other Zionists made was to assume that a state of their own would free them from this trap.

Instead, the state became a projection of the individual Jew, writ large. And the surrounding Arab nations became projections of individual Gentiles. Since Gentiles were by definition persecutors (according to the dominant Zionist worldview), the inevitable political conflicts between Israel and neighboring Arab peoples were bound to be seen as merely more of the same old persecution and victimization, bringing with it the same sense of shame.

Every tangible goal of Israeli policy became a symbol of the ultimate goal: defeating the Gentiles in order to escape from shame, to gain pride and self-respect.

Today, Israel pursues that aim by demanding the right of "natural growth" in its West Bank settlements. In other words, Israel wants the Palestinians to accept not merely the settlements that exist, but the larger settlements planned for the future, along with abandoning Jerusalem and the right of return. Inevitably, the Palestinians balk at such drastic sacrifices.

For most Jews, every such refusal becomes further "evidence" that the Palestinians are moved by the same irrational anti-Semitism that Jews suffered in Diaspora. To fail to resist it would only increase the sense of shame. So resist the Jews must, no matter what the rest of the world thinks of such intransigence. Indeed, since the rest of the world is Gentile, defying world opinion reaps the benefit of added pride.

And what if the other side does accede to Israeli demands? When the researchers asked Prime Minister Benjamin Netanyahu about a rational bargain -- accepting a two-state solution in return for all major Palestinian factions (including Hamas) recognizing Israel as a Jewish state -- he answered by demanding further sacrifice: "O.K., but the Palestinians would have to show that they sincerely mean it, change their textbooks and anti-Semitic characterizations."

There's more here than distrust of the enemy. Since the whole process is in the realm of symbolism, no tangible gain may ever be enough.

The ideology formulated by Pinsker has become a viciously self-confirming cycle. Israeli leaders fear that anything less than intransigence will cost them dearly at the polls. Unable to turn from resistance to reconciliation, they lock their nation into ongoing conflict and all the insecurity it brings.

Most Israelis do feel insecure. They fear that Palestinians and other Arabs will attack them, if given a chance. But a mere glance at the immense military advantage Israel has over all its neighbors makes that fear seem irrational.

It all becomes far more understandable if we recognize that what most Israelis fear, above all, is losing not their land or even their lives, but their very tenuous sense of national pride. Couple that with a natural desire to blame all the problems on the other side, so that Jews can feel morally pure and innocent, and it's hard to see how they can break out of this vicious cycle.

Are Palestinians caught in the same trap? The researchers who studied both sides found them equally focused on inflicting symbolic defeats on the other side. Perhaps Palestinians are as afraid, as are Israelis, of losing their pride. Perhaps that's why Hamas leaders resist formal recognition of Israel, even though they have clearly signaled their de facto acceptance of the Jewish state for several years and affirm the same view now. But that is for Palestinians and those who know them well to say. If it does turn out that the two sides are mirror images of each other, the conflict might seem even more insoluble.

Yet, the researchers who collected all this data suggest a more hopeful view. Once mediators from outside, like George Mitchell, the U.S. special envoy to the Middle East, and former British Prime Minister Tony Blair, understand that all the tangible issues in dispute are basically counters in a symbolic contest, they can begin to work with both sides more constructively.

In principle, anything can serve equally well as a symbolic counter. So no specific issue need be a sticking point. A truly skilled mediator could identify assets that each side could afford to lose, from a practical point of view, and suggest that they be sacrificed in a show of graceful concession.

Then each side could do what I wish the Israelis had done way back in 1973: throw up its hands, cry "We lost!" this or that or some other thing, and give the other side a reason to feel proud of its victory. As implausible as it sounds, that may be the only way to Middle East peace.

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Ira Chernus is Professor of Religious Studies at the University of Colorado at Boulder and author of American Nonviolence: The History of an Idea and the forthcoming book "Monsters to Destroy: The Neoconservative War on Terror and Sin."

Zen Proverb of the Day

Will there be Zimbabwe-type Hyperinflation in the U.S.A.?

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Mike Whitney
June 10, 2009 - Smirking Chimp

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The Republicans are convinced that hyperinflation is just around the corner, but don't bet on it. The real enemy is deflation, which is why Fed chief Bernanke has taken such extraordinary steps to pump liquidity into the system. The economy is flat on its back and hemorrhaging a half a million jobs per month. The housing market is crashing, retail sales are in a funk, manufacturing is down, exports are falling, and consumers have started saving for the first time in decades. There's excess capacity everywhere and aggregate demand has dropped off a cliff. If it wasn't for the Fed's monetary stimulus and myriad lending facilities, the economy would be stretched out on a marble slab right now. So, where's the inflation? Here's Paul Krugman with part of the answer:

"It's important to realize that there's no hint of inflationary pressures in the economy right now. Consumer prices are lower now than they were a year ago, and wage increases have stalled in the face of high unemployment. Deflation, not inflation, is the clear and present danger....

Is there a risk that we'll have inflation after the economy recovers? That's the claim of those who look at projections that federal debt may rise to more than 100 percent of G.D.P. and say that America will eventually have to inflate away that debt - that is, drive up prices so that the real value of the debt is reduced....Such things have happened in the past....

Some economists have argued for moderate inflation as a deliberate policy, as a way to encourage lending and reduce private debt burdens (but)... there's no sign it's getting traction with U.S. policy makers now." ("The Big Inflation Scare" Paul Krugman New York Times)

Krugman believes that conservatives have conjured up the inflation hobgoblin for political purposes to knock Obama's recovery plan off-course. But even he's mistaken, there's little chance that inflation will flare up anytime soon because the economy is still contracting, albeit at a slower pace than before. A good chunk of the Fed's liquidity is sitting idle in bank vaults instead of churning through the system as Bernanke it could do some good. According to Econbrowser, excess bank reserves have bolted from $96.5 billion in August 2008 to $949.6 billion by April 2009. Bernanke hoped the extra reserves would help jump-start the economy, but he was wrong. The people who need credit, can't get it; while the people who qualify, don't want it. It's just more proof that the slowdown is spreading.

That doesn't mean that the dollar won't tumble in the next year or so when the trillion dollar deficits begin to pile up. It probably will. Foreign investors have already scaled back on their dollar-based investments, and central banks are limiting themselves to short-term notes, mostly 3 month Treasuries. If Bernanke steps up his quantitative easing (QE) and continues to monetize the debt, there's a good chance that central bankers will jettison their T-Bills and head for the exits. That means that if keeps printing money like he has been, there's going to be a run on the dollar.

Now that the stock market is showing signs of life again, investors are moving out of risk-free Treasuries and into equities. That's pushing up yields on long-term notes which could potentially short-circuit Bernanke's plans for reviving the economy. Mortgage rates are set off the 10 year Treasury, which shot up to 3.90% by market's close on Friday. The bottom line is that if rates keep rising, housing prices will plummet and the economy will tank. This week's auctions will be a good test of how much interest there really is in US debt.

At some point in the next year, the dollar will lose ground and commodities will surge, causing uneven inflation. But for how long? That depends on the state of the economy. Dollar weakness and speculation can drive up the price of oil, (oil is up 100% in the last two and a half months, from $34. to $68.) but falling demand will eventually bring prices back to earth. Presently, there's a bigger glut of oil sitting in tankers offshore than anytime in the last 15 years. Which brings us back to the original question; how bad is the economy?

The answer is, really bad! Here's a short blurp from economist Dean Baker in an article in the UK Guardian:

"The decline in house prices since the peak in 2006 has cost homeowners close to $6 trillion in lost housing equity. In 2009 alone, falling house prices have destroyed almost $2 trillion in equity. People were spending at an incredible rate in 2004-2007 based on the wealth they had in their homes. This wealth has now vanished.

Housing is weak and falling, consumption is weak and falling, new orders for capital goods in April, the main measure for investment demand, is down 35.6 percent from its year ago level. And, state and local governments across the country, led by California, are laying off workers and cutting back services.

If there is evidence of a recovery in this story it is very hard to find. The more obvious story is one of a downward spiral as more layoffs and further cuts in hours continue to reduce workers' purchasing power. Furthermore, the weakness in the labor market is putting downward pressure on wages, reducing workers' purchasing power through a second channel. (Dean Baker "Cheerleading the Economy" UK Guardian)

Don't be fooled by the cheery news in the media. The economy is hanging by a thread and recovery is still a long way off. The only way to dig out of this mess is to address the underlying problems head-on. That means removing the toxic assets from the banks, revamping the credit system, and rebuilding battered household balance sheets. If these issues aren't resolved, the problems will drag on for years to come. And even if they are fixed, the economy is still facing a long period of deleveraging and retrenching followed by an anemic recovery. Obama's fiscal stimulus might give GDP a jolt in the third quarter, but without help from the government checkbook, economic activity will stay in the doldrums.

Last month, personal savings increased to nearly 6 percent while consumer credit fell by $15.7 billion, the second largest decline in debt on record. According to Brad Setser of the Council on Foreign Relations, "Total borrowing by households and firms fell from over 15% of GDP in late 2007 to a negative 1% of GDP in q4 2008." How can these losses to GDP be made up when private borrowing has vanished without a trace? Consumers have shut their wallets, locked their purses and are refusing to take on any more debt. Despite government efforts to restart the credit markets by backing up loans for 0% financing on auto sales and $8,000 tax credit on the purchase of a new home, (which is tantamount to subprime lending) consumers are digging in their heels. All the hype about inflation hasn't sent them racing back to the shopping malls or the auto showrooms. Consumers have reached their saturation point and they are not budging. It's the end of an era.

The unemployment picture is getting bleaker and bleaker. Last week's report from the Bureau of Labor Statistics concealed the real magnitude of the job losses by using the discredited "Birth-Death" model which exaggerates the number of people reentering the workforce. Here's what former Merrill Lynch chief economist David Rosenberg had to say about Friday's BLS report:

"The headline nonfarm payroll figure came in above expectations at -345,000 in May - the consensus was looking for something closer to -525,000. The markets are treating this as yet another in the line-up of 'green shoots' because the decline was less severe than it was in April (-504,000), March (-652,000), February (-681,000) and January (-741,000). However, let's not forget that the fairy tale Birth-Death model from the Bureau of Labour Statistics (BLS) added 220,000 to the headline - so adjusting for that, we would have actually seen a 565,000 headline job decline."

The BLS figures have been denounced by every econo-blogger on the Internet. The figures are another example of the government's determination to airbrush any unpleasant news about the recession. Here's a better summary of the unemployment numbers from Edward Harrison at credit writedowns:

The Business Birth-Death Model added 220,000 jobs to the headline seasonally-adjusted number. Without this number, we are looking at a loss of 565,000 jobs....The number of jobs lost in the last 12 months increased from 5.34 million in April to 5.51 million in May....Other indicators suggest that the shadow supply of discouraged workers not counted in the numbers will now return to the labor force, pushing up the unemployment number. For example, the U-6 unemployment number was a gargantuan 16.4 %, the highest ever."(Edward Harrison credit writedowns)

Unemployment now stands at 9.4% (16.4%?) and will continue to rise whether there's an uptick in economic activity or not. Businesses are shedding jobs at record pace, and slashing hours at the same time. The average workweek slipped to 33.1 hours (down 2 hours from April) a new low. It goes without saying, that unemployment is highly deflationary because jobless people have to cut out all unnecessary spending. Beyond the 500,000 layoffs per month; wages and benefits are also under pressure, making a rebound in consumer spending even less probable. This is from Brian Pretti's article "Place Your Wagers":

"The year over year change in the Employment Cost Index (ECI) is the lowest number in the history of the data.... in the absence of household credit acceleration... aggregate demand (will fall)

The year over year change in wages has never been this low in the records of the data. .. Wages and salaries.... are all in negative rate of change territory. They are ALL contracting year over year.

Absent household balance sheet reacceleration in leverage it sure seems a good bet forward corporate earnings are now as dependent on household wages, salaries and broader personal income as at any time in recent memory. And corporations to protect margins and nominal profits are pressuring wages and salaries downward." ("Place Your Wagers" Brian Pretti, Financial Sense Observations)

From a workers point of view, things have never been worse. Demand is falling, employers are slashing inventory and handing out pink slips, and entire industries are being boarded up and shut down or shipped overseas. Economists Barry Eichengreen and Kevin O'Rourke make the case that, in many respects, conditions are deteriorating faster now than they did in the 1930s. Here's what they found:

*1  World industrial production continues to track closely the 1930s fall, with no clear signs of 'green shoots'.

*2  World stock markets have rebounded a bit since March, and world trade has stabilized, but these are still following paths far below the ones they followed in the Great Depression.

*3  The North Americans (US & Canada) continue to see their industrial output fall approximately in line with what happened in the 1929 crisis, with no clear signs of a turn around. (A Tale of Two Depressions" Barry Eichengreen and Kevin O'Rourke VOX) http://www.voxeu.org/index.php?q=node/3421

Their conclusion: "Today's crisis is at least as bad as the Great Depression."

Yeah, times are tough, but what happens when housing prices stabilize and the jobs market begins to pick up; won't that put the Fed's trillions of dollars into circulation and create Wiemar-type hyperinflation?

Many people think so, but Edward Harrison anticipates a completely different scenario. The author takes into account the psychological effects of a deep recession and shows how trauma can have a lasting effect on consumer habits, thus, minimizing the chance of inflation. It's a persuasive thesis. Here's what he says:

"Richard Koo goes further in his book "The Holy Grail of Macro Economics". Here, he argues that the unwind of great bubbles suffers from what he labels a 'balance sheet recession.' In essence, companies go from maximizing profits, as they had done in normal times, to a post-bubble concern of reducing debt. Regardless of how much priming of the pump monetary authorities do, the psychology of debt reduction will limit the effectiveness of monetary policy as a policy tool.

In my view, the catalyst for this change of psychology is the 'debt revulsion' that ushers in the panic phase of an asset bubble collapse. (Charles Kindleberger highlights the various stages of a bubble and its implosion in his seminal book "Manias, Panics and Crashes". In this particular bubble, debt revulsion began post-Lehman Brothers. What we have seen, therefore, is a reduction in leverage and debt as the most leveraged players have gone to the wall. But, more than that, the household sector has gotten religion about debt reduction as the savings rate has increased dramatically since Lehman. In fact, I would argue that companies learned their lesson about debt from the aftermath of the tech bubble. It is the household sector in the U.S. (and the U.K.) which is heavily indebted. Therefore, if the psychology of a balance sheet recession does take form, it will be the household sector leading the charge.

In sum, the psychology after a major bubble is very different than the psychology before its collapse. The post-bubble emphasis becomes debt reduction and savings, making monetary policy ineffective, not because financial institutions are unwilling lenders but because companies and individuals are unwilling borrowers. These are forces to be reckoned with for some to come." (Edward Harrison, "Central banks will face a Scylla and Charybdis flation challenge for years" Credit Writedowns)

Seductive interest rates, lax lending standards and nonstop public relations campaigns, persuaded millions of people that they could live beyond their means by simply filling out a credit app. or fudging a few numbers on a mortgage loan. These are the real victims of Wall Street's speculative bubble-scam. For many of them, the agony of losing their home, or their job, or filing for personal bankruptcy will be felt for years to come. At the same time, the experience will keep many of them from getting in over their heads again. The same phenomenon occurred during the Great Depression. The pain of losing everything shapes behavior for a lifetime, which is why the savings rate has spiked so dramatically in the last few months. There's been a tectonic shift in attitudes towards consumption and there's no going back to the pre-bubble era.

If Harrison is right, our decades-long spending-spree is over and people will be looking for ways to live more modestly, pay-as-they-go and avoid red ink. This is good news for the economy's long-term strength, but bad for short-term recovery. Deflation will persist even while savings grow and consumption comes more into line with personal income. The dollar will fall hard if Bernanke continues to load up on Treasuries, but with a few slight adjustments, he should be able to avoid a full-blown currency crisis. Thus, Zimbabwe-type hyperinflation is unlikely; the ongoing slowdown should keep inflation in check.

U.S. War Privatization Results in Billions Lost in Fraud, Waste and Abuse--Report

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Half of the personnel the US has working on its wars in Iraq and Afghanistan are private contractors. A new report reveals how much of a rip-off this system has been to US taxpayers.

Jeremy Scahill
June 10, 2009 - RebelReports

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At a hearing in Washington today, the federal Commission on Wartime Contracting in Iraq and Afghanistan is releasing a 111-page report that represents its "initial investigations of the nation's heavy reliance on contractors." According to a release on the hearing:

More than 240,000 contractor employees, about 80 percent of them foreign nationals, are working in Iraq and Afghanistan to support operations and projects of the U.S. military, the Department of State, and the U.S. Agency for International Development. Contractor employees outnumber U.S. troops in the region. While contractors provide vital services, the Commission believes their use has also entailed billions of dollars lost to waste, fraud, and abuse due to inadequate planning, poor contract drafting, limited competition, understaffed oversight functions, and other problems.

These statistics support a recent DoD report on the extent of the US reliance on contractors. That report also found that there has been a 23% increase in the number of "Private Security Contractors" working for the Department of Defense in Iraq in the second quarter of 2009 and a 29% increase in Afghanistan, which "correlates to the build up of forces" in the country. In Iraq, the Pentagon attributes the increase to better accounting. There are currently more private contractors (counting both armed and unarmed) in Afghanistan (68,197) than US troops (40,000). In Iraq, the number of contractors (132,610) is basically equal to the number of US troops.

(NOTE: I recently discussed this issue on Bill Moyers Journal)

The single greatest beneficiary of the US wars in Iraq and Afghanistan is KBR, the former Halliburton subsidiary. KBR has been paid nearly $32 billion since 2001. In May, April Stephenson, director of the Defense Contract Audit Agency, testified that KBR was linked to "the vast majority" of war-zone fraud cases and a majority of the $13 billion in "questioned" or "unsupported" costs. According to Agency, it sent the inspector general "a total of 32 cases of suspected overbilling, bribery and other violations since 2004."

According to the Associated Press, which obtained an early copy of the commission's report, "billions of dollars" of the total paid to KBR "ended up wasted due to poorly defined work orders, inadequate oversight and contractor inefficiencies."

KBR is at the center of a lethal scandal involving the electrocution deaths of more than a dozen US soldiers, allegedly as a result of faulty electrical work done by the company. The DoD paid KBR more than $80 million in bonuses for the very work that resulted in the electrocution deaths.

Among the other scandals involving KBR that the commission is investigating is a questionable contract to rebuild a large dining facility at Camp Delta in Iraq:

In July 2008, the Army said a new dining facility was badly needed at the Camp Delta forward operating base because the existing one was too small, had a saggy ceiling, poor lighting and an unsanitary wooden floor.

KBR was awarded a contract in September. Work began in late October as American and Iraqi officials negotiated the agreement setting the dates for the U.S. troop withdrawal.

But during an April visit to Camp Delta, the commission learned that the existing mess hall had just been renovated. The $3.36 million job was done by KBR and completed in June 2008. Commission staff toured the renovated hall "without seeing or hearing of any problems or shortfalls," the report says.

Here's the kicker:

The decision to push ahead with the new hall was based on paperwork that was never updated and a failure to review the need for the project after the security agreement was signed. Most of the materials have been ordered and construction is well under way. That means canceling the project would save little money because KBR would have a legitimate claim for payment based on the investment it has already made.

So, are all these investigations and scandals hurting KBR? Apparently not:

Today, neither Halliburton nor KBR are suffering from their divorce. Halliburton reported $4 billion in operating profits in 2008, while KBR recently said its first quarter revenues in 2009 were up 27%, for a total of $3.2 billion. Its sales in 2008 were up 33%, and according to the Financial Times, the company had $1 billion in cash, no debt, and was looking for acquisitions.

One last note for context: While the Wartime Contracting Commission is doing very important work revealing the scope of the corruption, shoddy work and abuses within this system, it also includes several members who are either pro-war or have worked for major war contractors. This is the composition of the commissioners:

Co-chair Michael J. Thibault, a former deputy director of the Defense Contract Audit Agency, was appointed by Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi. Former Republican Congressman Co-Chair Shays was appointed by House Minority Leader John Boehner. The other six commissioners are Clark Kent Ervin, Grant S. Green, Linda J. Gustitus, Robert J. Henke, Charles Tiefer, and Dov S. Zakheim.

Blackwater Still Working in Iraq for the International Republican Institute, According to New Lawsuit

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As Blackwater gets sued again today for an alleged civilian killing in Iraq, new allegations surface about the company's continued presence there—using different corporate names.

Jeremy Scahill
June 10, 2009 - RebelReports

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It seems as though every week there is a new lawsuit filed against Blackwater for the killing of civilians in Iraq. While the Justice Department has failed to prosecute most of these cases (the September 2007 Nisour Square massacre being an exception), attorney Susan Burke has dedicated a substantial part of her practice to holding the company responsible for its crimes. She works in cooperation with the Center for Constitutional Rights.

Not only is Burke representing the victims of Nisour Square in their civil suit, and the family of an Iraqi guard allegedly murdered by a drunken Blackwater operative, but she has filed at least a half a dozen other cases against the company. "Erik Prince, a modern-day merchant of death, acts as if he is above the rule of law," charges Burke.

But beyond the specifics of her lawsuits, Burke is also alleging Blackwater/Xe remains firmly entrenched in Iraq, using affiliate companies like Greystone. She also says Blackwater is working for a "non-profit" organization, started under the Reagan administration, with a history of interference in internal affairs and elections of various nations, including allegations it helped foment a coup in Haiti: the International Republican Institute.

"The Iraqi government has barred Xe-Blackwater from operating in Iraq, and has refused to grant the licenses needed to carry weapons in Iraq," Burke says.  "Yet Prince continues to provide armed personnel to the International Republican Institute. Such repeated illegal conduct by Prince must be stopped."

According to SourceWatch:

Loosely affiliated with the Republican Party, the International Republican Insitute (IRI) works closely with the the National Endowment for Democracy and United States foreign policy instruments, including the U.S. Department of State and U.S. Agency for International Development, to support economic and political development programs around the world. The organization is almost exclusively funded by the U.S. government and related agencies.

IRI is also closely linked to Sen. John McCain. According to IRI's vice president, "Since the summer of 2003, IRI has conducted a multi-faceted program aimed at promoting democracy in Iraq. Toward this end, IRI works with political parties, civil society groups, and government officials and administrators. In support of these efforts, IRI also conducts numerous public opinion research projects and assists its Iraqi partners in the production of radio and television ads and programs." One IRI grant recipient in Iraq told author Nikolas Kozloff, "Instead of promoting impartial, better understanding of certain ideas and concepts, they [the IRI] are actually trying to further the cause of the Republican administration." Kozloff notes that in 2005-6 Blackwater donated $30,000 to IRI.

These new allegations surfaced today as Burke filed yet another lawsuit against Blackwater-Xe—this one over a 2007 civilian shooting in Iraq. Burke alleges that "Xe-Blackwater 'shooters' operating in Hilla, Iraq unnecessarily fired shots, killing Husain Salih Rabea and traumatizing Ali Kareem Fakhri, a student at the Babylon University College of Biology."

According to the lawsuit, the men were shot at as they drove in separate vehicles on a public roadway on August 13, 2007. Mr. Rabea died from the gunshot wound, leaving behind five sons and three daughters.

The complaint, which was filed today in U.S. District Court for the Eastern District of Virginia, alleges that Blackwater/Xe:

• continues to flout Iraqi law and operate without a license by continuing to provide armed men  under contract to protect employees of the International Republican Institute, an American government-funded organization,

• tries to hide its continued illegal operations in Iraq by using the Greystone name rather than the Blackwater or Xe name,

• captured illegal conduct of personnel on videotape and audiotape, but did not report or punish the illegal conduct of "shooters" and instead intentionally destroyed the evidence of illegal conduct, and encouraged the "shooters" to do the same.

Blackwater affiliate, Greystone, which Burke alleges is still operating in Iraq, is covered in-depth in my book, Blackwater: The Rise of the World's Most Powerful Mercenary Army, is registered offshore in Barbados. It is an old-fashioned mercenary operation offering "personnel from the best militaries throughout the world" for hire by governments and private organizations. It also boasts of a "multi-national peacekeeping program," with forces "specializing in crowd control and less than lethal techniques and military personnel for the less stable areas of operation."

The most recent lawsuit names as defendants 12 companies or entities owned by Erik Prince. It alleges "war crimes, assault and battery, wrongful death, intentional infliction of emotion distress, negligent infliction of emotional distress, negligent hiring, training and supervision, and tortious spoliation of evidence."