Bailout Overseer Says Banks Misused TARP Funds

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Binyamin Appelbaum
July 20, 2009 - Washington Post

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Many of the banks that got federal aid to support increased lending have instead used some of the money to make investments, repay debts or buy other banks, according to a new report from the special inspector general overseeing the government's financial rescue program.

The report, which will be published Monday, surveyed 360 banks that got money through the end of January and found that 110 had invested at least some of it, that 52 had repaid debts and that 15 had used funds to buy other banks.

Roughly 80 percent of respondents, or 300 banks, also said at least some of the money had supported new lending.

The report by special inspector general Neil Barofsky calls on the Treasury Department to require regular, more detailed information from banks about their use of federal aid provided under the Troubled Asset Relief Program. The Treasury has refused to collect such information.

Doing so is "essential to meet Treasury's stated goal of bringing transparency to the TARP program and informing the American people and their representatives in Congress about what is being done with their money," the report said.

In a written response, the Treasury again rejected that call. Officials have taken the view that the exact use of the federal aid cannot be tracked because money given to a bank is like water poured into an ocean.

"Although it might be tempting to do so, it is not possible to say that investment of TARP dollars resulted in particular loans, investments or other activities by the recipient," Herbert M. Allison Jr., the assistant Treasury secretary who administers the rescue program, wrote in a letter to Barofsky.

The Treasury has required 21 of the nation's largest banks to file public reports each month showing the dollar volume of their new lending.

The government so far has invested more than $200 billion in more than 600 banks under a program that began in October with investments in nine of the largest banks. Some banks have started to repay the aid even as others continue to apply for it.

Officials said the program intended to increase the capital reserves of healthy banks, allowing them to make more loans. From the beginning, however, the government invested in troubled banks -- most prominently Citigroup -- that had publicly announced intentions to reduce lending.

The government has also used the money to encourage mergers, such as Bank of America's acquisition of Merrill Lynch and PNC's deal for National City.

The report provides the most comprehensive look to date at how banks have used the money, based on voluntary responses to a March survey. Banks were asked to describe how they used the money, but they were not asked to break down the amounts.

One response, which the report described as typical, said the money had been used "to make loans to credit worthy customers, and to facilitate resolution of problem assets on our books."

TOON

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Why Israel Is Fighting Toward its Own Demise

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Ira Chernus
July 19, 2009 - Religion Dispatches

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Israeli Jews are deeply worried about their nation's image around the world, and with good reason. Military occupation is never a pretty sight, especially when the occupiers have been there for 42 years, steadily taking over the occupied people's lands as the whole world watches on television and the internet. It's not surprising that Israel gets so little sympathy when it complains about its image problem—which only makes many Israelis worry more about their public image.

But if Israeli Jews want to escape that vicious cycle and improve their image, no amount of money spent on clever PR campaigns will help until they do something about a basic root of the problem: their own cultural self-image. Not all Israeli Jews have the same self-image, of course. But there is a complex one embedded in their national culture; a set of basic assumptions that shape their political discourse and their government's policy decisions.

The first assumption is obvious whenever Israelis hear that others don't see them in a positive light. Their culture gives them a ready-made response, one that goes back to the very roots of Zionism: The world criticizes us, picks on us, dislikes us, victimizes us simply because we are Jews.

Certainly not all Israelis Jews respond this way. Some assess the criticisms objectively and see whether there is any truth in them; though they are fighting an uphill battle against the dominant tendency of their society and its history. Since so many Israelis have learned to see themselves as victims, they take every criticism as further proof that they are unfairly singled out for the world's harsh judgment.

So in order to even approach a solution to the crisis in Israel/Palestine, it's necessary to ask: Where did this self-image come from? The whole Zionist project to create a Jewish state began not merely because Jews felt victimized, but because so many felt powerless to do anything about it as long as they lived among the goyim (gentiles). What's more, many early Zionists were ashamed of their weakness, seeing it as a sign that Jews were "abnormal." They expected to escape all those feelings once they had their own independent nation, with its own armed forces.

It doesn't seem to have worked out that way. They have the power, to be sure (by various accounts, the fourth, fifth, or sixth most effective military in the world) which they frequently put on display. But all that expenditure of effort and money—much of it from American tax dollars, but a considerable amount from Israelis' taxes—has apparently not purchased feelings of powerfulness, confidence, and pride.

On the contrary, Israeli political life seems dominated by anxiety. So, for example, the fear of an Iranian nuclear bomb (even just one, against Israel's two hundred or more) makes headlines in Israel nearly every day, like this one from the Jerusalem Post: "Iran Could Build Bomb Within a Year"; even though, as the article clearly states, the Israeli government "currently believes that worst-case scenario is not likely to materialize."

Israel's Defense Minister Ehud Barak betrayed the same sense of anxiety about weakness when he complained to the New York Times that with the Obama administration "focusing solely on settlement building and not on what the Arab countries should also be doing for peace, Israel felt that it was being driven to its knees and delivered to the other side."

That's a bizarre exaggeration. In fact, the administration is also focusing on what the Arab countries should be doing: moving toward normalized ties with Israel. And even were those demands not being made, the idea that a nation with far more military power than any of its neighbors is being "driven to its knees," simply because people want them to stop expanding settlements (which are illegal in the first place) seems out of touch with reality.

And, to be precise, it's not just "people" who want them to stop expanding settlements. It's the most powerful person in the world, the President of the United States. When POTUS says he wants something from Israel and makes it clear, in private, that he really means it, the Israeli government jumps—no matter who is heading it, no matter how hard they try to hide the fact. That was obvious as far back as the Persian Gulf War of 1991 when Israel was hit with a number of Iraqi missiles the Israeli government, which always boasts that it will respond harshly to any attack, did nothing because Washington put up a big red light.

Washington appears to be flashing the red light once again. According to the Washington Times, "a senior Israeli official said that Israel has not asked for US aid or permission [to attack Iran] because the Netanyahu government doesn't want to risk being told 'no.'" The obvious point is that when the United States says "no" and means it, Israeli leaders kneel down and obey; which is why Barak is so worried about Israel being "driven to its knees."

This is the plight Israel finds itself in: It wants to use force to prove to the world, and to itself, that Jews have finally escaped from their age-old powerlessness and the anxiety it breeds. But Israel can use force only when given permission by the goyim in Washington; which seems to prove that the Jews are still powerless.

If the goyim say "no," they can be dismissed as Jew-haters (or, if they happen to be Jewish, as "self-hating Jews," which is just how Israeli prime minister Benjamin Netanyahu has described Obama confidantes David Axelrod and Rahm Emanuel. But that merely reinforces the sense that Jews are surrounded by enemies, victims of a hatred that seems to have no end, and (once again) powerless.

Netanyahu, doing little to cloak his status in this vicious spiral of insecurity, told a meeting of EU ambassadors that "Israelis are not willing to be suckers." Of course no one is suggesting that Israelis are or should be suckers—except their prime minister. He's standing firm against every call for an end to settlement expansion just to prove that he and his people are not suckers. And his defense minister, Ehud Barak, leader of what was once the opposition party, is standing just as firm to prove that Israel won't be "driven to its knees."

Perhaps that's why they continue to attract the hawks calling for an attack on Iran; perhaps, rather than fear, it's the tempting opportunity to flex their national muscle that moves them. Yet every muscle flexed to prove their strength only reinforces their fear that they may not be, perhaps can never be, strong enough. Whether Israel unleashes or restrains its military power, either way there is no escape from anxiety.

There is a real bond between the leaders and the people on this point, according to columnist Doron Rosenblum in Israel's leading newspaper, Ha'aretz: "Netanyahu and Barak would not have achieved such positions of power if they did not represent at least two outstanding traits of Israeliness: aggressiveness and paranoia… They reflect two sides of the same coin—the fear of being considered weak and, the only thing that's worse, being considered naïve." All of which is really just a kind of psychological weakness.

Rosenblum rightly concludes that if Israelis shun Obama's peace overtures they are the real suckers. Yet he suspects that Israelis will respond to the president with "the usual default option, in which military aggressiveness and diplomatic suckerhood go hand in hand in perfect harmony." That's the tragic fruit of a culture built on a self-image of weakness and victimization.

That self-image is so pervasive, it has now become a self-fulfilling prophecy that can shape Israeli policy. According to an unnamed "senior Israeli official" quoted in Ha'aretz, "Israel is skeptical" that US envoy George Mitchell "would be able to coax Arab states to make concrete normalization commitments if only a temporary settlement freeze was declared." In other words, since we know that the other side hates us and will never make peace, we won't take a first step toward peace.

Most Israelis share this view, according to columnist Shmuel Rosner in the Jerusalem Post:

It is clear to the vast majority of Israelis that freezing the settlements will not bring about peace or security. That's why one doesn't see many Israelis supporting Obama's attempt to freeze the settlements. That's why no major political party in Israel can afford to be identified with the Obama way. It will be politically damaging.
Of course "it is clear" is only based on Israeli beliefs, not facts. Beliefs and feelings, on the other hand, are what drive voter sentiment in Israel as everywhere else.

With so many voters affecting a posture of permanent victimization, the government finds it politically safest to avoid taking even the first baby steps toward peace. Instead Israeli leaders play on the voters' fears (what Rosenblum calls "paranoia") by promising the other side of the coin: a more aggressive stance. They insist on expanding settlements, for example, even though Israel stands to lose far more than it can gain.

Two Israeli academics now have statistical data to confirm that fear has largely muted the Israeli public discourse on peace. The study, by Prof. Daniel Bar-Tal and Dr. Eran Halperin, showed that most Jewish Israelis view the conflict with the Palestinians through the lens of fear, which creates "a selective and distorted processing of information aimed at preserving conflict-beliefs." On the other hand, "only a small minority of Israelis evaluate the conflict through the ethical lenses of justice and morality."

The researchers claim to have found a silver lining: "People who were exposed to a scenario emphasizing the price Israel might have to pay for allowing the conflict to continue were more willing to accept new information and compromise, in comparison to those exposed to a scenario based on the fruits of peace." Logically, then, Israeli leaders should tell their voters that they stand to lose plenty if they don't support compromises for peace.

But here's the rub. If Israeli leaders express, or even hint at, that obvious truth, they will give public voice to the self-image of vulnerability and victimhood. They will reinforce the very anxiety that the existence of Israel was supposed to relieve, yet never did. And the voters will reject them.

Again, Israelis are stuck in a difficult plight: As long as the same old self-image pervades Israeli political culture, any policy their government adopts, whether for war or peace, will only intensify their anxiety. And their most familiar response to anxiety about weakness is to get tough.

The need to be tough—to prove that Israel won't be "driven to its knees" because Israelis are not "suckers"— goes far toward explaining the Netanyahu government's hardline positions. Most voters, having decided that they will always be victims, apparently want their leaders to use force in an endless attempt to prove to the world (but even more to themselves) that they are not powerless victims.

Of course that project is doomed to fail. It only perpetuates the conflict, reinforcing the sense of victimization that provokes more calls for force. Since the root of the problem lies in national self-image, nothing that any other nation does can make much difference. People caught in such a trap naturally have a hard time seeing any way to break out and extend a hand of peace to the other side. Instead they resort to the familiar pattern of blaming others, which sets the vicious cycle going all over again.

Perhaps Israelis will some day be so afraid of the dangerous consequences of rejecting peace that they will turn toward peace.

But it seems more likely that real peace will begin only when enough Israelis decide that they no longer want to define themselves by their traditional self-image, that they want a new one to match the reality of their power. Then the majority of Israeli voters will be able to find national pride not in the exercise of power but in the pursuit of peace. When that day comes, we can expect the Israeli government to begin sincerely and earnestly pursuing peace.

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Ira Chernus is Professor of Religious Studies at the University of Colorado at Boulder.

Air Force Plans for All-Drone Future

As of 2009 the Air Force's robotic drone fleet stands at 195 Predators and 28 Reapers.

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Is the day of the hot-shot fighter jock nearly done?

David Axe
July 19, 2009 - Wired

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An Air Force study, released without much fanfare on Wednesday, suggests that tomorrow's dogfighers might not have pilots in the cockpit. The Unmanned Aircraft System Flight Plan. which sketches out possible drone development through the year 2047, comes with plenty of qualifiers. But it envisions a radical future. In an acronym-dense 82 pages, the Air Force explains how ever-larger and more sophisticated flying robots could eventually replace every type of manned aircraft in its inventory — everything from speedy, air-to-air fighters to lumbering bombers and tankers.

Emphasis on "might" and "could." While revealing how robots can equal the capabilities of traditional planes, the Air Force is careful to emphasize that an all-bot air fleet is not inevitable. Rather, drones will represent "alternatives" to manned planes, in pretty much every mission category.

Some of the missions tapped for possible, future drones are currently considered sacrosanct for human pilots. Namely: dogfighting and nuclear bombing. Drones "are unlikely to replace the manned aircraft for air combat missions in the policy-relevant future," Manjeet Singh Pardesi wrote in Air & Space Power Journal, just four years ago. Dogfighting was considered too fluid, too fast, for a drone's narrow "situational awareness." As for nuclear bombing: "Many aviators, in particular, believe that a 'man in the loop' should remain an integral part of the nuclear mission because of the psychological perception that there is a higher degree of accountability and moral certainty with a manned bomber," Adam Lowther explained in Armed Forces Journal, in June.

Despite this, the Air Force identifies a future "MQ-Mc" Unmanned Aerial System for dogfighting, sometime after 2020. The MQ-Mc will also handle "strategic attack," a.k.a nuke bombing. Less controversial is the conjectural MQ-L, a huge drone that could fill in for today's tankers and transports.

But just because a drone could replace a manned plane, doesn't necessarily mean it definitely will. "We do not envision replacing all Air Force aircraft with UAS," Col. Eric Mathewson told Danger Room by email. "We do plan on considering UAS as alternatives to traditionally manned aircraft across a broad spectrum of Air Force missions … but certainly not all." In other words, in coming years drones might be able to do everything today's manned planes can do — technically speaking. But the Air Force still might find good reasons — moral, financial or otherwise — to keep people in some cockpits.

The Flight Plan represents a new twist in a heated debate raging in Congress over the Pentagon's 3,000-strong fighter force. The legislature is split over whether to fund more F-22 fighters — a move that could draw a veto from President Barack Obama. Secretary of Defense Robert Gates has long favored drone development over buying more manned fighters, and in May Joint Chiefs chair Admiral Mike Mullen predicted Gates' position would win out, over the long term. "There are those that see [the F-35 Joint Strike Fighter] as the last manned fighter," Mullen said. "I'm one that's inclined to believe that." General Atomics, which makes the popular Predator line of drones, underscored Mullen's comment by unveiling its new, faster Predator C.

If Flight Plan proves an accurate predictor, it's not just manned fighters (maybe) headed for extinction, but (maybe) nuclear bombers, transports, tankers … nearly all human-occupied military planes.

How Bad Will the Economy Get? Really, Really Bad

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Historically, every financial and economic crisis has been used to further centralize power and concentrate wealth. This one is no different.

Thomas Greco, Jr.
July 14, 2009 - AlterNet

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Historically, every financial and economic crisis has been used to further centralize power and concentrate wealth. This one is no different, and in fact the moves being promoted by the Obama administration and the central banks of the Western powers will take the whole world to the pinnacle of financial despotism -- unless enough people wake up and claim their own "money power."

In recent months, the Fed has expanded its "assets" from about $800 billion to more than $2,000 billion. Those so-called assets are securities it bought from financial institutions and loans made to central banks in other countries. But the Fed refuses to name the specific recipients of those funds, while admitting that by doing so they are manipulating the value of the US dollar on foreign exchange markets. (Congressman Alan Grayson Grills Fed Vice Chair Donald Kohn.)

Where does the Fed get the money to buy those "assets" or to make those loans? Quite simply, it creates the money. Unlike you or me or any other economic entity, the Fed has the power to create Federal Reserve dollars by effectively writing a check against no funds. This is the function known as "Open Market Operations."

What is the economy experiencing now, and what is in prospect for the future? Despite unprecedented inflation of the money supply, we are now (mid-July, 2009) in a period of depression. How can we have simultaneous inflation of the currency and still have economic depression?

It is a matter of where the money is going. While the public sector (federal government) is being lavishly funded to maintain a global empire, and the banks are being bailed out to try to keep a dysfunctional and destructive financial system from collapsing, the private productive sector is being starved for credit. As a result, businesses are bankrupting, people are losing their jobs and their incomes, and lower levels of government are being squeezed because their tax revenues are shrinking.

There is also the matter of the real estate bubble that was created by the financial institutions as they loaded up the private sector with a debt burden that was way beyond its ability to bear. Now that burden is being shifted to the public sector as the government assumes those "toxic" loans. Unfortunately, it is not the poor suckers who were lured into the debt trap that are being relieved, but the predatory lenders who laid the traps. So mortgages are being foreclosed at an unprecedented scale, people are losing their equity as housing values plunge, and more Americans are being made homeless.

These are the factors that have so far kept the effects of monetary inflation from becoming extreme. Ultimately, however, such abusive issuance of political money shows up as rising prices.

When will the price effects of hyper-inflation begin to kick in? How will the government respond to it? What will be the social and political fallout? What can ordinary people do to protect themselves from monetary and legislative abuses? These are the questions that beg for answers.

Already there are rumblings and signs that the U.S. dollar is about to lose its status as the global reserve currency. When that happens, imports of energy and other necessities will become more expensive. The U.S.'s massive trade deficits will not be sustained into the future. China, the OPEC countries, and others that have been buying massive amounts of U.S. government bonds with their dollar earnings, are indicating that their appetite has been sated. Bilateral and multilateral trade agreements are being made that bypass the use of the dollar for international trade.

One thing is clear -- we cannot rely upon the government to act in the best interests of the people. Already, President Obama has moved to give the Federal Reserve even more power to control the people's credit and financial resources. According to a June 18 article in the Wall Street Journal, "The central bank would win power to monitor risks across the financial system, and sweeping authority to examine any firm that could threaten financial stability, even if the Fed wouldn't normally supervise the institution." This is not a new plan; it was floated as a trial balloon during the Bush administration. As early as March 2008, then Treasury Secretary Paulson was proposing to "give the Federal Reserve broad new authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system."

Ostensibly that would be done to prevent the errant financial institutions from repeating their sins of the recent past, but more likely it will have the effect of suppressing any private initiative that might compete with the financial cartel. The Fed is, after all, a private company run by the bankers for the bankers. A recent Reuters article is critical of Obama's move because of the Fed's lack of accountability. It is a plan that seeks to preserve at all costs the credit monopoly that exists under the central banking regime and to perpetuate the looting of the economy by monetization of federal government debts and other ultimately worthless "assets."

During the Great Depression, President Franking Roosevelt, upon taking office in 1933, declared a "bank holiday." He ordered all banks to close. Many of those banks never reopened and many people lost their savings. He also demanded that all Americans turn in their gold holdings in return for paper currency, which was one of the biggest robberies in history up to that time. Some pundits are predicting that another such bank holiday is being planned to put the brakes on price increases, once they begin in earnest, by depriving people of access to their savings, as was done in Argentina in 2002.

Governments that mismanage money invariably use the force of law to prevent the sheep from escaping from the shearing pen (or the slaughter house). So long as people are completely dependent upon political money and banks, they will docilely (or grudgingly) accept whatever "solutions" the political leadership puts forth, and do whatever the government demands of them.

Fortunately there is a way out. The primary purpose of money is to facilitate the exchange of goods and services in the markets. But it is possible to mediate the exchange process without using political money as the payment medium, and without borrowing from banks.

There is plenty of precedent for this sort of cashless trading. It involves a process of direct credit clearing among associated buyers and sellers. During the Great Depression the entrepreneurial middle class in Switzerland organized themselves into the WIR Economic Circle Cooperative. After 75 years, the WIR clearing circle continues to thrive with more than 60,000 member businesses trading the equivalent of about US$1.3 billion per year.

The past four decades have seen the emergence of a new industry comprised of commercial trade exchanges, sometimes called "barter" exchanges, that act as "third part record keepers" enabling the same sort of direct credit clearing for thousands of businesses in cities around the world. Efforts at the grassroots by social entrepreneurs to localize exchange and finance have been similarly widespread in many communities over the past twenty-five years.

Measures to properly reform the money and banking system by political means have about as much chance as the proverbial snowball in hell. However, what is possible, and what seems to be gaining traction to transcend the dominant system, is the materialization of voluntary, private initiatives that enable the cashless exchange of goods and services. As these systems continue to improve, proliferate, and scale up, they will provide a pathway toward a sustainable economy, greater local control, and a better quality of life for all.

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Thomas H. Greco, Jr. is the director of the Community Information Resource Center, which he founded in 1992. CIRC is a nonprofit consulting organization and networking hub dedicated to economic equity, social justice, and community improvement, specializing in community currency and mutual credit design, development, and implementation. His newest book is The End of Money and the Future of Civilization.

Celebrating Cronkite While Ignoring What He Did

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Glenn Greenwald
July 18, 2009 - Salon.com

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"The Vietcong did not win by a knockout [in the Tet Offensive], but neither did we. The referees of history may make it a draw. . . . We have been too often disappointed by the optimism of the American leaders, both in Vietnam and Washington, to have faith any longer in the silver linings they find in the darkest clouds. . . .

"For it seems now more certain than ever that the bloody experience of Vietnam is to end in a stalemate. . . . To say that we are closer to victory today is to believe, in the face of the evidence, the optimists who have been wrong in the past" -- Walter Cronkite, CBS Evening News, February 27, 1968.

"I think there are a lot of critics who think that [in the run-up to the Iraq War] . . . . if we did not stand up and say this is bogus, and you're a liar, and why are you doing this, that we didn't do our job. I respectfully disagree. It's not our role" -- David Gregory, MSNBC, May 28, 2008.

When Pulitzer Prize-winning journalist David Halberstam died, media stars everywhere commemorated his death as though he were one of them -- as though they do what he did -- even though he had nothing but bottomless, intense disdain for everything they do. As he put it in a 2005 speech to students at the Columbia School of Journalism: "the better you do your job, often going against conventional mores, the less popular you are likely to be . . . . By and large, the more famous you are, the less of a journalist you are."

In that same speech, Halberstam cited as the "proudest moment" of his career a bitter argument he had in 1963 with U.S. Generals in Vietnam, by which point, as a young reporter, he was already considered an "enemy" of the Kennedy White House for routinely contradicting the White House's claims about the war (the President himself asked his editor to pull Halberstam from reporting on Vietnam). During that conflict, he stood up to a General in a Press Conference in Saigon who was attempting to intimidate him for having actively doubted and aggressively investigated military claims, rather than taking and repeating them at face value:

Picture if you will rather small room, about the size of a classroom, with about 10 or 12 reporters there in the center of the room. And in the back, and outside, some 40 military officers, all of them big time brass. It was clearly an attempt to intimidate us.

General Stilwell tried to take the intimidation a step further. He began by saying that Neil and I had bothered General Harkins and Ambassador Lodge and other VIPs, and we were not to do it again. Period.

And I stood up, my heart beating wildly -- and told him that we were not his corporals or privates, that we worked for The New York Times and UP and AP and Newsweek, not for the Department of Defense.

I said that we knew that 30 American helicopters and perhaps 150 American soldiers had gone into battle, and the American people had a right to know what happened. I went on to say that we would continue to press to go on missions and call Ambassador Lodge and General Harkins, but he could, if he chose, write to our editors telling them that we were being too aggressive, and were pushing much too hard to go into battle. That was certainly his right.

Can anyone imagine any big media stars -- who swoon in reverence both to political power and especially military authority -- defying military instructions that way, let alone being proud of it? Halberstam certainly couldn't imagine any of them doing it, which is why, in 1999, he wrote:

Obviously, it should be a brilliant moment in American journalism, a time of a genuine flowering of a journalistic culture . . .

But the reverse is true. Those to whom the most is given, the executives of our three networks, have steadily moved away from their greatest responsibilities, which is using their news departments to tell the American people complicated truths, not only about their own country, but about the world around us. . . .

Somewhere in there, gradually, but systematically, there has been an abdication of responsibility within the profession, most particularly in the networks. . . . So, if we look at the media today, we ought to be aware not just of what we are getting, but what we are not getting; the difference between what is authentic and what is inauthentic in contemporary American life and in the world, with a warning that in this celebrity culture, the forces of the inauthentic are becoming more powerful all the time.

All of that was ignored when he died, with establishment media figures exploiting his death to suggest that his greatness reflected well on what they do, as though what he did was the same thing as what they do (much the same way that Martin Luther King's vehement criticisms of the United States generally and its imperialism and aggression specifically have been entirely whitewashed from his hagiography).

So, too, with the death of Walter Cronkite. Tellingly, his most celebrated and significant moment -- Greg Mitchell says "this broadcast would help save many thousands of lives, U.S. and Vietnamese, perhaps even a million" -- was when he stood up and announced that Americans shouldn't trust the statements being made about the war by the U.S. Government and military, and that the specific claims they were making were almost certainly false. In other words, Cronkite's best moment was when he did exactly that which the modern journalist today insists they must not ever do -- directly contradict claims from government and military officials and suggest that such claims should not be believed. These days, our leading media outlets won't even use words that are disapproved of by the Government.

Despite that, media stars will spend ample time flamboyantly commemorating Cronkite's death as though he reflects well on what they do (though probably not nearly as much time as they spent dwelling on the death of Tim Russert, whose sycophantic servitude to Beltway power and "accommodating head waiter"-like, mindless stenography did indeed represent quite accurately what today's media stars actually do). In fact, within Cronkite's most important moments one finds the essence of journalism that today's modern media stars not only fail to exhibit, but explicitly disclaim as their responsibility.

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UPDATE: A reader reminds me that -- very shortly after Tim Russert's June, 2008 death -- long-time Harper's editor Lewis Lapham attended a party to mark the release of a new book on Hunter Thompson, and Lapham said a few words. According to New York Magazine's Jada Yuan, this is what happened:

Lewis Lapham isn't happy with political journalism today. "There was a time in America when the press and the government were on opposite sides of the field," he said at a premiere party for Gonzo: The Life and Work of Dr. Hunter S. Thompson on June 25. "The press was supposed to speak on behalf of the people. The new tradition is that the press speaks on behalf of the government." An example? "Tim Russert was a spokesman for power, wealth, and privilege," Lapham said. "That's why 1,000 people came to his memorial service. Because essentially he was a shill for the government. It didn't matter whether it was Democratic or Republican. It was for the status quo." What about Russert's rep for catching pols in lies? "That was bullshit," he said. "Thompson and Russert were two opposite poles."

Writing in Harper's a few weeks later, Lapham -- in the essay about Russert (entitled "An Elegy for a Rubber Stamp") where he said Russert's "on-air persona was that of an attentive and accommodating headwaiter, as helpless as Charlie Rose in his infatuation with A-list celebrity" -- echoed Halberstam by writing:

Long ago in the days before journalists became celebrities, their enterprise was reviled and poorly paid, and it was understood by working newspapermen that the presence of more than two people at their funeral could be taken as a sign that they had disgraced the profession.

That Lapham essay is full of piercing invective ("On Monday I thought I'd heard the end of the sales promotion. Tim presumably had ascended to the great studio camera in the sky to ask Thomas Jefferson if he intended to run for president in 1804"), and -- from a person who spent his entire adult life in journalism -- it contains the essential truth about modern establishment journalism in America:

On television the voices of dissent can't be counted upon to match the studio drapes or serve as tasteful lead-ins to the advertisements for Pantene Pro-V and the U.S. Marine Corps. What we now know as the "news media" serve at the pleasure of the corporate sponsor, their purpose not to tell truth to the powerful but to transmit lies to the powerless. Like Russert, who served his apprenticeship as an aide-de-camp to the late Senator Daniel Patrick Moynihan, most of the prominent figures in the Washington press corps (among them George Stephanopoulos, Bob Woodward, and Karl Rove) began their careers as bagmen in the employ of a dissembling politician or a corrupt legislature. Regarding themselves as de facto members of government, enabling and codependent, their point of view is that of the country's landlords, their practice equivalent to what is known among Wall Street stock-market touts as "securitizing the junk." When requesting
explanations from secretaries of defense or congressional committee chairmen, they do so with the understanding that any explanation will do. Explain to us, my captain, why the United States must go to war in Iraq, and we will relay the message to the American people in words of one or two syllables. Instruct us, Mr. Chairman, in the reasons why K-Street lobbyists produce the paper that Congress passes into law, and we will show that the reasons are healthy, wealthy, and wise. Do not be frightened by our pretending to be suspicious or scornful. Together with the television camera that sees but doesn't think, we're here to watch, to fall in with your whims and approve your injustices. Give us this day our daily bread, and we will hide your vices in the rosebushes of salacious gossip and clothe your crimes in the aura of inspirational anecdote.

That's why they so intensely celebrated Tim Russert: because he was the epitome of what they do, and it's why they'll celebrate Walter Cronkite (like they did with David Halberstam) only by ignoring the fact that his most consequential moments were ones where he did exactly that which they will never do.

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UPDATE II: In the hours and hours of preening, ponderous, self-serving media tributes to Walter Cronkite, below is a clip you won't see, in which Cronkite -- when asked what is his biggest regret -- says:

What do I regret? Well, I regret that in our attempt to establish some standards, we didn't make them stick. We couldn't find a way to pass them on to another generation.

It's impossible even to imagine the likes of Brian Williams, Tom Brokow and friends interrupting their pompously baritone, melodramatic, self-glorifying exploitation of Cronkite's death to spend a second pondering what he meant by that.

http://www.newseum.org/news/news.aspx?item=nh_CRON090714_2

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Glenn Greenwald was previously a constitutional law and civil rights litigator in New York. He is the author of the New York Times Bestselling book "How Would a Patriot Act?," a critique of the Bush administration's use of executive power, released in May 2006. His second book, "A Tragic Legacy", examines the Bush legacy.

Identifying the Great Blob of Alaska (No, it's not Sarah Palin)

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Wesley Loy 
July 19, 2009 - Time

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A group of hunters aboard a small boat out of the tiny Alaska village of Wainwright were the first to spot what would eventually be called "the blob." It was a dark, floating mass stretching for miles through the Chukchi Sea, a frigid and relatively shallow expanse of Arctic Ocean water between Alaska's northwest coast and the Russian Far East. The goo was fibrous, hairy. When it touched floating ice, it looked almost black.

But what was it? An oil slick? Some sort of immense, amorphous organism adrift in some of the planet's most remote waters? Maybe a worrisome sign of global climate change? Or, as folks wondered who followed from faraway via the internet, was it something insidious and, perhaps, even carnivorous like the man-eating jello from the old Steve McQueen movie that inspired the Alaska phenomenon's nickname?

The hunters got word to the U.S. Coast Guard, which immediately sent two spill response experts to fly over the mass, which looked sort of rusty from the air. They also approached it by boat. The North Slope Borough, the local government for the vast and sparsely populated cap of Alaska, sent its own people out the main village of Barrow to have a look. They scooped up jars of the stuff for analysis in a state lab in Anchorage.

"We responded as if it were an oil product," says Coast Guard Petty Officer Terry Hasenauer. "It was described to us as an oil-like substance, thick and lingering below the surface of the water. Those characteristics can indicate heavy, degraded oil, maybe crude oil, or possibly an intermediate fuel oil." Meanwhile, the story spread over the internet like an oil-spill, giving lots of people a queasy feeling.

Test results released Thursday showed the blob wasn't oil, but a plant - a massive bloom of algae. While that may seem less dangerous, a lot of people are still uneasy. It's something the mostly Inupiat Eskimo residents along Alaska's northern coast say they could never remember seeing before.

Algal blooms are a common and often menacing event along many U.S. coastlines. Some strains are toxic and can close beaches and poison seafood, posing a hazard to consumers. The National Oceanic and Atmospheric Administration maintains a forecasting system for the Gulf of Mexico to warn of harmful Florida blooms. On Thursday, on the other side of the continent, U.S. Sen. Olympia Snowe, a Maine Republican, urged NOAA to direct at least $500,000 to assess a disastrous red tide - a form of algal bloom. "The state of Maine is currently besieged by the most virulent red tide event ever recorded in the region," Snowe wrote. "As a result of this outbreak, virtually the entire coast of our state has been closed to the harvest of clams, mussels, ocean quahogs, and other shellfish."

While Alaskans may find the algal blob unusual if not frightening, scientists say that algal blooms are nothing new in Arctic Ocean waters, though the blob itself might be a little weird. Brenda Konar, a marine biology professor at the University of Alaska Fairbanks, said algal outbreaks can and do occur even in icy Arctic waters. It just takes the right combination of nutrients, light and water temperature, she said. "Algae blooms," she says. "It's sort of like a swimming pool that hasn't been cleaned in a while." The blob, Konar said, is a microalgae made up of "billions and billions of individuals." "We've observed large blooms in the past off Barrow although none of them at all like this," Barry Sherr, an Oregon State University professor of oceanography, said in an e-mail. "The fact that the locals say they've never seen anything like it suggests that it might represent some exotic species which has drifted into the region, perhaps as a result of
global change. For the moment that's just a guess."

So far in Alaska, nothing suggests the Chukchi Sea blob is toxic, although the Coast Guard's Hasenauer said toxicity tests were planned. In any case, virtually no commercial seafood production comes from the waters along Alaska's northern coast, but residents do fish, hunt whales and harvest other animals as part of a traditional subsistence lifestyle. In the meantime, the blob for the most part is staying away from the shoreline and slowly drifting farther and farther away.

The Six Deadly Hypocrites

Sen. Ben Nelson

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Paul Krugman
July 17, 2009 - New York Times

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Will the destructive center kill health care reform? It looks all too possible.

What's especially galling is the hypocrisy of their claimed reason for delaying progress — concern about the fiscal burden. After all, in the past most of them have shown no concern at all for the nation's long-term fiscal outlook.

Case in point: the Medicare Modernization Act of 2003, which denied Medicare the right to bargain for lower drug prices, locked in overpayments to private insurance companies, and did nothing, nothing at all, to pay for its proposed outlays. How many of these six self-proclaimed defenders of solvency voted no on the crucial procedural vote? One. (Joe Lieberman, to my surprise.)

And let's not forget that Ben Nelson, who appears to be the ringleader, has fought tooth and nail against competition from a public option — which would almost certainly save a significant amount of money, as well as providing much-needed competition.

If the Gang of Six really does kill reform, remember their names; they will bear the responsibility for vast, unnecessary suffering over the years to come.

TOON

Zen Moment of the Weekend

This morning, hundreds of Amazon Kindle owners awoke to discover that books by a certain famous author had mysteriously disappeared from their e-book readers. These were books that they had bought and paid for-thought they owned.

But no, apparently the publisher changed its mind about offering an electronic edition, and apparently Amazon, whose business lives and dies by publisher happiness, caved. It electronically deleted all books by this author from people's Kindles and credited their accounts for the price.

This is ugly for all kinds of reasons. Amazon says that this sort of thing is "rare," but that it can happen at all is unsettling; we've been taught to believe that e-books are, you know, just like books, only better. Already, we've learned that they're not really like books, in that once we're finished reading them, we can't resell or even donate them. But now we learn that all sales may not even be final.

As one of my readers noted, it's like Barnes & Noble sneaking into our homes in the middle of the night, taking some books that we've been reading off our nightstands, and leaving us a check on the coffee table.

You want to know the best part? The juicy, plump, dripping irony?

The author who was the victim of this Big Brotherish plot was none other than George Orwell. And the books were "1984" and "Animal Farm."

Scary.

- New York Times

Afghanistan: Marines' Mission Doomed to Failure

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Sonali Kolhatkar
July 17, 2009 - New America Media

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NAM Editor's Note: Just two weeks into July, the month is already the deadliest for NATO troops in Afghanistan. The high casualty count is at least partially the result of Operation Khanjar, the largest U.S. Marine Corps ground offensive in years. But NAM contributor Sonali Kolhatkar writes that NATO's modus operandi are doomed to failure.

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The United States' new offensive into Afghanistan's troubled Helmand province provides a test case for achieving President Obama's stated goal: "to disrupt, dismantle, and defeat al Qaeda in Pakistan and Afghanistan."

It is the first major push of its kind, relying on a massive ground presence of thousands of Marines rather than air strikes, which American strategists acknowlege have killed far too many civilians over the past two years. But while Operation Khanjar realizes Washington's increased desire to divert more "resources" into Afghanistan, it is unclear what, if anything, can be accomplished by this kind of brute force.

At the launch of the offensive, U.S. General Stanley McChrystal gave only the following explanation: that his intention is to "clear, hold and build" in Taliban strongholds like Helmand.

But what exactly does "clear" mean? If it means to kill, the U.S. Marines will have to distinguish between Taliban and non-Taliban Afghans to avoid more civilian casualties. This is a near-impossible task. The Taliban do not wear a uniform or carry membership cards. They carry weapons, but so do Afghan civilians, who do so to protect their families. In an effort to lower the embarrassing count of civilians killed (often greater than the numbers killed by the Taliban), McChrystal has ordered troops to cut short any pursuit of Taliban fighters if civilians are at risk.

The U.S. troops have to play cautious -- they have everything to lose: their own lives and the diminishing goodwill of the Afghan people. Unfortunately for the troops, Afghan civilian resentment, built up over the past several years, has not vaporized just because the U.S. military's rules of engagement have officially changed. The Marines are facing a Taliban force bolstered by the survivors of U.S. bombs and the loved ones of those killed. The Taliban's greatest advantage is their ability to move through a population increasingly sick of "death-by-occupation," leaving the U.S. troops with only two options: risk letting the Taliban escape, or kill the Taliban even if it means killing civilians in the process and violating the new rules. Both scenarios lead to a Taliban victory.

Perhaps by "clear," McChrystal means capture. But that raises more difficult questions: Where will they put the prisoners, and what sort of justice will be offered? Will the United States turn Bagram into a greater gulag than Guantanamo? Will they turn over those who survive their torture and interrogation to secret military tribunals? In releasing 90 percent of those imprisoned at Guantanamo without charge, the United States has already proved inept at distinguishing al Qaeda and Taliban members from ordinary civilians over the past eight years. Imprisoning and torturing innocent civilians has the same obvious effect as killing them: increased hostility and resentment toward the occupation.

Perhaps by "clear," McChrystal simply means pushing the Taliban out of the areas where they are operating into surrounding areas. Already there are reports that the Taliban have escaped the current offensive, simply retreating to the western and northern parts of the country and launching their own counter-operation: Iron Net, intended to trap the U.S. forces. They have killed dozens of troops and civilians through roadside and suicide bombs in the past week alone. In response, the United States has reportedly fallen back on the discredited strategy of air raids to kill dozens of people they claim are "militants," but likely include civilians.

If the current strategy does result, intentionally or not, in displacing the problem into new areas, presumably more Marines will have to be deployed to those areas to repeat the cat-and-mouse game, and push the Taliban up against borders that they cannot infiltrate.

But Afghanistan is not a small country (it is comparable in size to Iraq) and by this logic, the United States is looking at a long-term blanket occupation of the country, something that ordinary Afghans have increasingly declared they do not want.

A BBC-ABC News poll conducted prior to the current ground offensive revealed that less than 50 percent of Afghans have a favorable opinion of the United States, down from 68 percent in 2005. (The poll also revealed an even greater dislike of the Taliban, meaning that Afghans tolerate the U.S. military only because they have no other options.

The likelihood of American success in Afghanistan is at best dim and, at worst, heading inevitably toward a lose-lose situation. Given the impossibility of surgically identifying and killing a moving and elusive target, there are only two possible outcomes: killing a lot of civilians, or pushing the insurgency to the rest of the country, or both. After the Iraq debacle, are Americans ready for yet another unpopular occupation, protracted war and thousands of U.S. casualties?

Perhaps the name is apt: the United States' Operation Khanjar is named for an Arabic (not Afghan) dagger widely used in past centuries by fighters in the Gulf Arab region, in countries like Oman. But today, the Khanjar is largely a ceremonial weapon, a decorative objet d'art used to adorn walls but useless in a real fight. Like the Khanjar, the current U.S. strategy in Afghanistan, out-of-touch with reality, is more symbolic than practical.

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Sonali Kolhatkar is Co-Director of the Afghan Women's Mission, a US-based non-profit that supports women's rights activists in Afghanistan. Sonali is also co-author of "Bleeding Afghanistan: Washington, Warlords, and the Propaganda of Silence." She is the host and producer of Uprising, a nationally syndicated radio program with the Pacifica Network.

Racial Slur Moment of the Weekend

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The ever-racist Pat Buchanan outdid himself last night debating Rachel Maddow on affirmative action, Sonia Sotomayor and why we don't need no brown-skinned people here, thanks. To Maddow pointing out that 108 of 110 Supreme Court judges have been white:

"White men were 100% of the people that wrote the Constitution, 100% of the people that signed the Declaration of Independence, 100% of the people who died at Gettysburg and Vicksburg...This (is) a country built basically by white folks."

- Common Dreams

Where Did Those Traders in Toxic Assets Go?

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(Tomgram) Forward:

I woke up one morning late last week to the news that taxpayers, already $149 billion in the hole in the Treasury Department's TARP bailout program, are set to lose even more. As rescued banks now try to extricate themselves from the government's control, they must buy back stock warrants proffered at the time of the bailout, which, as the New York Times described it, offer "the right to purchase shares in each of the companies at roughly the price of their shares at the time of the deals."

As it happens, thanks largely to that taxpayer-funded bailout, bank stocks have risen since last fall's meltdown. Selling those warrants, then, should mean a tidy profit for taxpayers. But no such luck, it seems. Almost a dozen small banks have already bought back their warrants, and for a considerable discount -- a mere 66% of their value -- costing taxpayers upwards of $10 million. If this were to continue when giant firms like JPMorgan Chase, Goldman Sachs, and Morgan Stanley come up to bat, taxpayers could be out up to $2.1 billion. Think of that as a small potential thank-you note from the banking business to Americans for helping it out of a jam.

Right behind that bit of sprightly news was a report from the Associated Press that the giant insurance firm AIG, almost 80% owned by taxpayers, was now back in consultation with the Obama administration over just how much more it should pay out in further retention bonuses -- this after multi-millions in such bonuses were already paid -- including "about $235 million for employees at AIG's financial products unit." AIG's near collapse, added the AP, "was not due to its traditional insurance operations, but instead risky derivatives contracts written by the financial products division." In addition to those traders, for 40 top execs of the dismally failed company, there is to be a payout of a mere $9 million in further bonuses for 2008. What a comedown!

Of course, who can be surprised by this sort of thing these days? Not, I assume, Barbara Garson, known in the Vietnam era as the author of the satiric play "MacBird," who has since gone on to write books on American work life (All the Livelong Day) and on a single bank deposit as it made its dizzying way around our planet (Money Makes the World Go Around). For TomDispatch, she's written a little mystery story about those financial-products types, what's happened to them, and -- most strikingly -- their possible rebirth. Think of her as this site's equivalent of Miss Marple, set loose on our financially melted-down planet. - TomDispatch

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The Mystery of the Missing Unemployed Man

Barbara Garson
July 12, 2009 - TomDispatch

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For the book I'm writing about unemployed Americans, I had no trouble finding accountants, brokers, cashiers, or die casters. Admittedly, I had to go out of town to interview the die casters. But when I arrived, alphabetically, at unemployed editors, I had only to look in my address book.

Financiers were further from my life experience than either die casters or editors. Yet the "do you know anyone who…?" method still proved an effective way of turning up unemployed hedge-fund analysts and bank loan officers -- and within a week at that. It was only when I refined my search to ferret out unemployed financiers who had actually handled those infamous "toxic assets" that I hit the proverbial brick wall.

Since mortgage-backed securities and the swaps that insure them had been the downfall of Lehman Brothers, Bear Stearns, Merrill Lynch, and the giant insurance company AIG, packs of bankers who worked on them must, I assumed, be roaming free on the streets of Manhattan. Yet I couldn't find a single one.

Finally, I phoned a law firm representing Lehman Brothers employees in a suit for the pay they were owed when the company shut down without notice. I asked the lawyer if he could possibly inquire among his unemployed clients for someone, anyone, who used to work with mortgage-backed securities and might be willing to talk about how he or she was getting by today. "I don't have to use real names," I assured him. Many of the unemployed people I'd already interviewed felt so lost and ashamed that I had decided not to use their real names. Unemployed bankers deserve anonymity, too.

But the lawyer made it clear that that wasn't the problem. "Most of them were snapped up immediately by Barclays," he said. He represents other financial plaintiffs as well, and he seemed to think that the kind of person I was looking for hadn't remained unemployed very long.

The Clues

How could that be? We've heard ad nauseum about mortgage-backed securities. They're bonds "structured" out of thousands, or tens of thousands, of home or commercial mortgages. The bond's owner was to receive interest out of the mortgage payments from all those property owners. He could earn a low 5% interest if he opted to be paid out of the first money that came in. (Institutional investors often chose that safe "tranche," or slice, of the security.) But back when mortgages seemed so safe, a hedge-fund gambler might have been happy to opt for the last mortgage payments to come in -- in exchange for heftier 7% to 8% interest rates. Of course, that was the gamble. Too many missed mortgage payments meant little or no returns for his fund.

When last I heard, more than half of U.S. mortgages were held this way, so it was a reasonable supposition that a lot of people had been employed structuring, trading, and insuring those bonds. But who in his right mind would touch this stuff now? While that lawyer sounded like an honest, helpful fellow, I still wondered whether he wasn't just brushing me off to protect his embarrassingly unemployed clients.

Soon after, however, I met a bank corporate loan officer who confirmed that his colleagues on the "structured side" were indeed still employed. In fact, he thought he noticed a couple of new chairs at their trading desk in the bank's trading room. "Those damn things" had become so complicated, he speculated, that the people who put them together were now needed in similar numbers to "unwind the bank's positions" -- that is, get them out of the deals.

That must be it, I thought, and recalled a moment soon after AIG got the last of its $182 billion bailout from the government. At that time, the company braved a massive public outcry to award big bonuses to its top employees, including those who had created the "swaps" (short for credit default swaps, or CDSs) that swamped the company. Like so many other companies, AIG claimed that bonuses were necessary to retain the "best brains," especially those who understood the credit-default swaps.

These swaps are a type of derivative that was supposed to represent a way of insuring the very bonds we've been talking about. Here's how it worked -- at least theoretically, at least before the ship went down: On a given bond, say number 123456, an insurance company like AIG would essentially say to a large investor, perhaps a mutual fund, "You pay us $7,000 a month and, if you fail to receive the interest on that bond for, say, two months, then we'll buy the whole bond from you for the $200 million you paid for it." In other words, it was a private, custom-written contract to simply "swap" one of those bonds for money under certain agreed circumstances.

These deals were couched in such terms, rather than as straight insurance policies, because insurance is regulated and the regulations require setting aside relatively small amounts of money in reserve in case the disasters insured against occur. But swaps aren't regulated. Nothing need be set aside.

Here's the remarkable thing: both the Bush and Obama administrations decided that the government would make good on these non-regulated, non-insurance policies. The costs could be humongous.

Now, here's an even more distressing complication. You didn't have to own the original bond to buy the swap that was really an insurance policy. An "investor" could approach AIG and say, "You know that Merrill asset-backed bond -- number 123456? I'll pay you $7,000 a month, too, and if the bond defaults, then you owe me 200 million also."

It's as if any number of people could buy (or, really, bet on) your life insurance policy. Or think of a race track where anyone can go to the window and bet on any horse in any race -- and collect if it comes in. (Or in this case, collect if mortgage payments didn't come in.)

If our government were merely going to cover the original mortgage-backed securities, the maximum payouts, though large, would at least be calculable. If 50% of the mortgages in the U.S. were, as they say, securitized, and if they all were to default, that would be a vast but finite loss. But since any number of people could buy into the swaps on those bonds, the swap payouts could be an unknown amount that would be many times the value of the real buildings. How many multiples of reality might that come to? Two times, 10 times, 100 times? Who knows? Remember, these are unregulated transactions.

And keep in mind that the "investment" being bailed out here has nothing to do with anything in the real world. Neither party to these "me too" swaps owned, built, or financed the original housing, or anything else for that matter. They were simply betting on whether a certain group of people would pay their mortgage bills.

Why our government would underwrite these bets, and why such gambling contracts are legal in the first place, is beyond me, but as we know, they were placed on a vast scale. No wonder, I thought, that my swap men were all still employed. After all, even if there's no work for die-casters or editors, there's still all that "unwinding" to do by the people who did the winding in the first place.

The Crime

Then I read this headline in the Financial Times: "Strange but true -- the credit specs are back." According to the column that followed by John Dizard, "[T]hanks to the Geithner Treasury's policy of reform, rather than dissolution, CDS trading has regained a vampiric strength that the real economy still lacks."

So, now I understood: the man I couldn't find, the man who wasn't unemployed, wasn't just doing that final bit of unwinding or cleaning up old messes. He was busy making new ones!

How could Dizard be certain, though, that the debt trade is really booming again? He cites "one friend of mine in the credit fund trade" who has "made money on both the downside and the upside during the past year."

Of course, who can know for sure? If there was a derivative exchange along the lines of the New York Stock Exchange, we'd have a good idea of the volume of the trade. But derivatives -- I know you've heard this more than once -- are unregulated.

President Obama's recent white paper on financial reform suggests that derivatives should, in fact, be regulated, except for what it refers to as "custom" products. That, unfortunately, sounds like just the right-sized loophole for the financial instruments I've described. And -- I'm sure you won't be surprised by this -- financiers are lobbying furiously to expand that hole.

The Motive

Why is there such an interest in reviving the debt market and why are financiers so determined to keep it unregulated? Aren't they scared of it, too? Let me quote Dizard one last time:

"After all, if the dictates of style and tax auditors say you have to go easy on conspicuous consumption, and if there's no demand for the products of real capital spending, then you might as well take your cash to the track, or the corner credit default swap dealer."

In other words, people are speculating on derivatives and derivatives of derivatives because there's no action in the real world. You can't invest in new real businesses or lend money to old real businesses for expansion unless people can afford to buy the products they'll produce. That brings me back to where I started: our real world. You know, the one where just about everyone's unemployed except those swap guys.

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Barbara Garson is the author of two classic books about work: All the Livelong Day: The Meaning and Demeaning of Routine Work and The Electronic Sweatshop. Her latest book, Money Makes the World Go Around, published in 2000, described the hollowed-out global economy that was heading for a crash. Now, she's embarked on a book about the current Great Recession.

Everything That Happens in Afghanistan Is Based on Lies or Illusions

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Forward -

Writing on the phenomenon of escalation, journalist Norman Solomon begins a recent piece this way: "The president has set a limit on the number of U.S. troops in Afghanistan. For now. That's how escalation works. Ceilings become floors. Gradually." Then he adds: "[N]o amount of spin can change the fact that the U.S. military situation in Afghanistan continues to deteriorate. It would be astonishing if plans for add-on deployments weren't already far along at the Pentagon."

Well, be astonished no longer. Right now, unsurprisingly enough, it's not looking good in that country. Roadside bomb (IED) attacks are spiking (with an "all-time high" of 465 in May alone), and American and NATO deaths have jumped by 40% since 2008, 75% since 2007. And so, despite a major Obama administration expansion of the war and a significant commitment of new troops and money, fast on the heels of Solomon's piece came the first trial balloon -- the first leaks in a Washington Post piece from those unnamed, if ubiquitous, "senior military officials" -- for what may be the next round of escalation.

In an ongoing assessment of the devolving situation in Afghanistan, due to be delivered to the White House next month, the new U.S. commander General Stanley A. McChrystal has supposedly already concluded "that the Afghan security forces will have to be far larger than currently planned if President Obama's strategy for winning the war is to succeed." Here's the catch (and you knew there would be one, didn't you?): the only way to make that force larger is to pour billions more dollars and thousands of new American soldiers into the country as "advisors" and "trainers." As if he had read Solomon, National Security Adviser James Jones was already talking about those ceilings. ("It would not surprise me if the ceiling for the Afghan army request was raised...")

So it goes. Too bad no one's escalating the diplomacy, as the regularly on-target columnist for the British Guardian, Simon Jenkins, pointed out recently: "Diplomacy, your hour has come. There is no way soldiers will find an exit from Afghanistan. They can deliver defeat or they can deliver bloody stalemate. They cannot deliver victory and every observer knows it. This conflict will end only when the courage being daily demanded of soldiers is also shown by politicians."

From Kabul, TomDispatch regular Ann Jones reports on a changing situation in her normal vivid fashion, offering in the process a unique movie review from the front lines of filmmaking. - TomDispatch

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A Film That Captures Some Edgy, Fearful Truths

Ann Jones
July 16, 2009 - TomDispatch.com

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[Note: Fixer will first be shown on HBO on Monday night, August 17th. It will be re-aired on August 20th, 23rd, 25th, 29th, and 31st. Check your local listings for the exact times.]

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KABUL, Afghanistan, July 2009 -- I've come back to the Afghan capital again, after an absence of two years, to find it ruined in a new way. Not by bombs this time, but by security.

The heart of the city is now hidden behind piles of Hescos -- giant, grey sandbags produced somewhere in Great Britain. They're stacked against the walls of government buildings, U.N. agencies, embassies, NGO offices, and army camps (of which there are a lot) -- and they only seem to grow and multiply. A friend called just the other day from a U.N. building, distressed that the view from her office window was vanishing behind yet another row of Hescos. Urban life as Kabulis knew it in this once graceful city has been lost to the security needs of strangers.

The creation of Hescostan in the middle of Kabul is both an effect of, and a cause of, war: an effect because it seems to arise in response to devious enemy tactics that are still relatively new to Afghanistan, such as the use of roadside bombs (IEDs) and suicide bombers (though there has actually been no attack in Kabul for six months now); a cause because it is so clearly a projection, an externalization of the fears of men out of their depth. It is a paradox of such "force protection" that the more you have, the more you feel you need. What's called security generates fear. Now comes a documentary that projects that fear onto the screen.

It is 2006, late in the year. A reporter stands on a rocky hillside near the city of Kandahar in southern Afghanistan and points a wobbly camera at dark-clad gunmen ranged at a distance before him. They've wrapped the tails of their turbans to mask their faces. They carry their Kalashnikovs at the ready. The reporter shouts a question: "Does the Taliban receive support from Pakistan?"

As the camera jumps about to find the Talib who is speaking, a translator voices his answer: "Yes, Pakistan stands with us. On the other side of the border, we have our offices there. Some people in Pakistan is supporting us and the government of Pakistan does not say anything to us. They provide us with everything."

The reporter -- Christian Parenti of the Nation magazine -- has his story. For years, Afghan President Hamid Karzai has charged Pakistan with backing the Taliban, while Pakistan's then-President Musharraf denied it, and officials of the Bush administration looked the other way. Now, Parenti has the word of armed Taliban. This is the kind of story a foreign correspondent can't get without a fixer; that is, a local guy who knows the language, the local politics, the protocols of custom -- and how to arrange a meeting like this in the middle of nowhere with men who might kill you.

A Talib warns of an approaching reconnaissance plane. "We should go," the scared reporter says. The camera spins wildly across a vast empty expanse of rock and pale sky. "We should go." Moments later, safely back in a car speeding away, Parenti turns the camera on his own grinning face: "This is the most relieved American reporter in Afghanistan," he says, and describes the man sitting beside him -- Ajmal Nashqbandi, a 24-year-old Pashtun from Kabul -- as "the best fixer in Afghanistan." But we already know what Parenti doesn't (because filmmaker Ian Olds has told us up front before the titles even hit the screen): soon the fixer will be dead, murdered by the Taliban. We will be witnesses.

If this sounds harrowing, it is. Fixer is the best documentary I've seen on Afghanistan -- so good it's hard to imagine a better one. It's all jagged edges, blurs, and disconnects, catching as it does both the forbidding emptiness of the land and the edginess of war-weary Afghans. One long segment, apparently showing the inside of Parenti's shawl as he conceals a camera from potentially hostile villagers, seems the visual correlative of the feeling that unsettles all outsiders from time to time in this country: the sense of being completely in the dark. In 2006-2007, as the Taliban surged back with kidnappings, murders, bombs, and jihadi suicide attacks, this is how Afghanistan felt. It's the feeling that still drives Hesco sales in the capital.

Full disclosure: both Parenti and I have written about Afghanistan for the Nation for several years. I write mostly about women, Parenti mostly about the war, and I admire his work. We met for the first time only a couple of months ago, after both of us were invited to take part in a conference on Afghanistan. He told me about Fixer, then playing at the Tribeca Film Festival. I went to see it, and when it ended I could hardly get out of my seat. Watching it again on DVD in Kabul made me weep.

By refusing to exploit Ajmal's murder for the sake of suspense -- by revealing it at the start -- Olds has chosen to make a film full of the kind of fear that seems to inhabit international centers of power in Afghanistan today. The film's nervous visual style is strikingly different from the clean-cut look of Occupation: Dreamland, his earlier documentary about American soldiers in Iraq. Critics will surely have much more to say about Fixer's importance as a film. It has already won a raft of prizes, including firsts at Documenta Madrid and the Pesaro (Italy) Film Festival, and Olds took home a Tribeca award this year as the best new documentary filmmaker.

How Lies Begat Illusions Begat Lies

What I want to focus on, though, is the way the film resonates with conditions in Afghanistan today. Olds has the good sense to insert a quick history lesson in this film, on the grounds that you can't understand the Taliban without knowing about America's covert operations in the region in the 1980s. Back then, President Ronald Reagan's administration, mainly through the CIA, used the Pakistani Intelligence services to fund, arm, and train Afghan and foreign Islamist jihadis to defeat the Soviet army in Afghanistan. Pakistan subsequently used "channels built with U.S. money" to install in Afghanistan a friendly government -- the Taliban.

Later, after the George W. Bush administration invaded the country and the U.S. ousted the Taliban, it installed Hamid Karzai as president and returned many of the old Islamist jihadis to power in his government. Thus, this peculiar, well-established fact underlies the current war in Afghanistan: the United States sponsored both sides.

Some analysts say the U.S. "invented" all the "enemies" involved; others, that the U.S. (and Saudi Arabia) merely paid the bills, while Pakistan directed the action to its own advantage. Either way, this history -- much of it still secret or repeatedly re-spun -- leaves all parties to the current conflict in an intellectual sweat. They must plan for the future on the basis of a past they can't acknowledge. With national elections set for August 20th, the United States is planning for an Afghan future that still includes the jihadi buddies its officials know they should long ago have left behind.

Only the Afghanistan Independent Human Rights Commission has called, year after year, for a moral accounting. Its surveys of Afghan citizens consistently find that the people want lasting peace, and to attain it, they would prefer some sort of truth and reconciliation procedure, like the one that took place in South Africa, to cleanse the country and set it on an honest intellectual and moral footing.

For obvious reasons, the United States wants no part of the truth that would emerge from such a process. Just this week, the Obama administration first claimed it had no grounds to investigate General Abdul Rashid Dostum's infamous 2001 massacre of Taliban prisoners, even though Dostum seems to have been on the CIA payroll at the time, and his troops were backed by U.S. military operatives. Later, the president reversed course, ordering national security officials to "look into" the matter. In the end, President Obama may prefer to "move on." As does Dostum, who recently rejoined the Karzai administration.

I've elaborated here on Olds's quick history lesson to more fully explain why you may be finding it hard these days to understand how we got into what's already being called "Obama's War" -- and how to get out. Think of it this way: everything that happens in Afghanistan is based on (1) a lie, (2) an illusion, or (3) both. Then throw in mass illusion as well, carefully constructed so that each person tells others only what they want to hear.

Which brings us back to Fixer, a film steeped in stories of duplicity and self-delusion that are the personal and political currency of Afghanistan today. In one telling incident, Parenti pushes to observe the famously corrupt Afghan judiciary in action. He's rewarded with a front row seat at a murder trial, only to learn that it has been staged for his edification.

In fact, a court official admits, the production Parenti witnessed didn't depict the way the court really works, but the way "it should work" according to international standards. The judiciary knows those international standards very well, since NGOs and private contractors supported by the U.S. Agency for International Development and other aid agencies have offered them training, and what's called "capacity building," for years. The trainers report success, which of course is what the aid agencies want to hear; and the trainees may be encouraged (as in this case) to perform for the public. If Parenti had played the part assigned to him in this exercise in mass illusion, he'd have reported a glowing story about the success of Afghanistan's new rule of law. (He didn't.)

Afghans have an expression -- "pesh pa been" -- referring to people who move relentlessly ahead by watching their own feet. Parenti, at least, could see when he was being tripped up. But the incident leaves you wondering: if officials of the Karzai government go this far for a single American reporter, what extravagant performances have they mounted all along for junketing Senators and cabinet members, and the likes of Donald Rumsfeld and Laura Bush, not to mention the recent rounds of Obama era visitors?

Even Ajmal the fixer repeatedly misjudges situations and his own people; and in the end, he proves to have been more of an innocent than Parenti. In an eerie moment captured on screen, Parenti predicts that one day the Taliban will kidnap a Western journalist. No way, says Ajmal, assuming that he and his clients are protected by Pashtunwali, his (and the Taliban's) tribal code of honor. Later, working for the Italian journalist Daniele Mastrogiacomo, Ajmal fixes a fatal appointment with Taliban commander Mullah Dadullah. Taken hostage, Ajmal reassures his family in a Taliban video: "These are Muslims. We are in the hands of Islam."

Behind the Hescos Where History Is Being Re-Spun

Illusion and duplicity entrap the fixer, too, and spin his personal story into a political event. The Italians, who notoriously negotiate with hostage takers, persuade Karzai to exchange five Taliban prisoners for Mastrogiacomo and Ajmal. In the excitement of being freed, however, Mastrogiacomo fails to keep track of his fixer. The Taliban see an opportunity to recapture Ajmal and demand the release of two more prisoners. Karzai and his foreign minister, having freed the foreigner, then scramble to the moral high ground, refusing to negotiate with terrorists. Orders come down from Pakistan to kill Ajmal -- on April 8, 2007 -- to make Karzai look bad in the eyes of his own people. Mullah Dadullah sends a video of the beheading.

Ajmal's stricken father asks, "What kind of government doesn't protect its own citizens?" The answer is: a government that's bought, paid for, and answerable to outsiders, a government that has neither the need nor the inclination to care for its citizens. As Karzai explains the matter, "The Italians built us a road."

That's the government the international community is now spending more than $500 million to reelect. (Most of that money comes from the U.S.) International election officials, of course, are neutral -- so neutral that they look the other way as Karzai makes deals with rival warlords to ensure his reelection. One by one they come over to his side, and word leaks out about which ministries they've been promised.

International agencies responsible for mounting the election have already abandoned the goal of a "free and fair" vote. They're aiming for "credible," which is to say, an election that looks pretty good, even if it's not. In the context of accumulated illusions, this goal is called "realistic," and perhaps it is. As the fixer's grieving father says, "Our government is a puppet of foreigners. That is why we expect nothing from it."

As I write, 4,000 newly arrived U.S. Marines are trudging through the blistering heat of Helmand Province to push back the Taliban so local Pashtuns can turn out to vote next month for Karzai, their fellow Pashtun. What's wrong with this new Obama strategy? For one thing, in some areas the local Pashtun population has instead turned out to fight against the foreign invaders, side by side with the Taliban (who, it should be remembered, are mostly local Pashtuns). They're as fed up as anybody with the puppet Karzai. Like millions of other Afghans, they say Karzai has done nothing for the people. But saddled with history, Karzai remains the horse the U.S. rode in on.

Let me make it clear that Olds and Parenti don't draw these comparisons to current affairs in Afghanistan. Fixer is simply and appropriately subtitled The Taking of Ajmal Nashqbandi. It's a tribute to a trusted colleague. But watch the film yourself and you'll be immersed in duplicity: officials manipulate the truth, citizens fear to tell it, Americans can't bear to look it in the face. Watch the film and maybe you'll understand how hard it has become, here behind the Hescos where history is being re-spun, to size anything up, pin anything down, recognize an enemy, or help a friend.

[Note: Fixer will first be shown on HBO on Monday night, August 17th. It will be re-aired on August 20th, 23rd, 25th, 29th, and 31st. Check your local listings for the exact times.]

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Ann Jones wrote at length about the failure of American aid in Kabul in Winter a book about American meddling in Afghanistan as well as her experience as a humanitarian aid worker there from 2002 to 2006. For a concise report on many of the defects in international aid mentioned here, check out Real Aid (pdf file below), a report issued in 2005 by the South African NGO Action Aid.

http://www.actionaid.org.uk/doc_lib/69_1_real_aid.pdf

TOON

Were Thousands Of Afghans Murdered As U.S. Troops Stood By?

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James Risen
July 10, 2009 - The New York Times

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See documentary here:

http://video.google.com/videoplay?docid=-8763367484184611493

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After a mass killing of hundreds, perhaps thousands, of Taliban prisoners of war by the forces of an American-backed warlord during the 2001 invasion of Afghanistan, Bush administration officials repeatedly discouraged efforts to investigate the episode, according to government officials and human rights organizations.

American officials had been reluctant to pursue an investigation — sought by officials from the F.B.I., the State Department, the Red Cross and human rights groups — because the warlord, Gen. Abdul Rashid Dostum, was on the payroll of the C.I.A. and his militia worked closely with United States Special Forces in 2001, several officials said. They said the United States also worried about undermining the American-supported government of President Hamid Karzai, in which General Dostum had served as a defense official.

"At the White House, nobody said no to an investigation, but nobody ever said yes, either," said Pierre Prosper, the former American ambassador for war crimes issues. "The first reaction of everybody there was, 'Oh, this is a sensitive issue; this is a touchy issue politically.' "

It is not clear how — or if — the Obama administration will address the issue. But in recent weeks, State Department officials have quietly tried to thwart General Dostum's reappointment as military chief of staff to the president, according to several senior officials, and suggested that the administration might not be hostile to an inquiry.

The question of culpability for the prisoner deaths — which may have been the most significant mass killing in Afghanistan after the 2001 American-led invasion — has taken on new urgency since the general, an important ally of Mr. Karzai, was reinstated to his government post last month. He had been suspended last year and living in exile in Turkey after he was accused of threatening a political rival at gunpoint.

"If you bring Dostum back, it will impact the progress of democracy and the trust people have in the government," Mr. Prosper said. Arguing that the Obama administration should investigate the 2001 killings, he added, "There is always a time and place for justice."

While President Obama has deepened the United States' commitment to Afghanistan, sending 21,000 more American troops there to combat the growing Taliban insurgency, his administration has also tried to distance itself from Mr. Karzai, whose government is deeply unpopular and widely viewed as corrupt.

A senior State Department official said that Secretary of State Hillary Rodham Clinton and Richard C. Holbrooke, the special representative on Afghanistan and Pakistan, had told Mr. Karzai of their objections to reinstating General Dostum. The American officials have also pressed his sponsors in Turkey to delay his return to Afghanistan while talks continue with Mr. Karzai over the general's role, said an official briefed on the matter. Asked about looking into the prisoner deaths, the official said, "We believe that anyone suspected of war crimes should be thoroughly investigated."

The Back Story

While the deaths have been previously reported, the back story of the frustrated efforts to investigate them has not been fully told. The killings occurred in late November 2001, just days after the American-led invasion forced the ouster of the Taliban government in Kabul. Thousands of Taliban fighters surrendered to General Dostum's forces, which were part of the American-backed Northern Alliance, in the city of Kunduz. They were then transported to a prison run by the general's forces near the town of Shibarghan.

Survivors and witnesses told The New York Times and Newsweek in 2002 that over a three-day period, Taliban prisoners were stuffed into closed metal shipping containers and given no food or water; many suffocated while being trucked to the prison. Other prisoners were killed when guards shot into the containers. The bodies were said to have been buried in a mass grave in Dasht-i-Leili, a stretch of desert just outside Shibarghan.

A recently declassified 2002 State Department intelligence report states that one source, whose identity is redacted, concluded that about 1,500 Taliban prisoners died. Estimates from other witnesses or human rights groups range from several hundred to several thousand. The report also says that several Afghan witnesses were later tortured or killed.

In Afghanistan, rival warlords have had a history of eliminating enemy troops by suffocating them in sealed containers. General Dostum, however, has said previously that any such deaths of the Taliban prisoners were unintentional. He has said that only 200 prisoners died and blamed combat wounds and disease for most of the fatalities. The general could not be reached for comment, and a spokesman declined to comment for this article.

While a dozen or so bodies were examined and several were autopsied, a full exhumation was never performed, and human rights groups are concerned that evidence has been destroyed. In 2008, a medical forensics team working with the United Nations discovered excavations that suggested the mass grave had been moved. Satellite photos obtained by The Times show that the site was disturbed even earlier, in 2006.

"Our repeated efforts to protect witnesses, secure evidence and get a full investigation have been met by the U.S. and its allies with buck-passing, delays and obstruction," said Nathaniel Raymond, a researcher for Physicians for Human Rights, a group based in Boston that discovered the mass grave site in 2002.

Seeking an Investigation

The first calls for an investigation came from his group and the International Committee of the Red Cross. A military commander in the United States-led coalition rejected a request by a Red Cross official for an inquiry in late 2001, according to the official, who, in keeping with his organization's policy, would speak only on condition of anonymity and declined to identify the commander.

A few months later, Dell Spry, the F.B.I.'s senior representative at the detainee prison at Guantánamo Bay, Cuba, heard accounts of the deaths from agents he supervised there. Separately, 10 or so prisoners brought from Afghanistan reported that they had been "stacked like cordwood" in shipping containers and had to lick the perspiration off one another to survive, Mr. Spry recalled. They told similar accounts of suffocations and shootings, he said. A declassified F.B.I. report, dated January 2003, confirms that the detainees provided such accounts.

Mr. Spry, who is now an F.B.I. consultant, said he did not believe the stories because he knew that Al Qaeda trained members to fabricate tales about mistreatment. Still, the veteran agent said he thought the agency should investigate the reports "so they could be debunked."

But a senior official at F.B.I. headquarters, whom Mr. Spry declined to identify, told him to drop the matter, saying it was not part of his mission and it would be up to the American military to investigate.

"I was disappointed because I believed that, true or untrue, we had to be in front of this story, because someday it may turn out to be a problem," Mr. Spry said.

The Pentagon, however, showed little interest in the matter. In 2002, Physicians for Human Rights asked Defense Department officials to open an investigation and provide security for its forensics team to conduct a more thorough examination of the gravesite. "We met with blanket denials from the Pentagon," recalls Jennifer Leaning, a board member with the group. "They said nothing happened."

Pentagon spokesmen have said that the United States Central Command conducted an "informal inquiry," asking Special Forces personnel members who worked with General Dostum if they knew of a mass killing by his forces. When they said they did not, the inquiry went no further.

"I did get the sense that there was little appetite for this matter within parts of D.O.D.," said Marshall Billingslea, former acting assistant defense secretary for special operations, referring to the Department of Defense.

High-Level Conversation

Another former defense official, who would speak only on condition of anonymity, recalled that the prisoner deaths came up in a conversation with Paul D. Wolfowitz, the deputy secretary of defense at the time, in early 2003.

"Somebody mentioned Dostum and the story about the containers and the possibility that this was a war crime," the official said. "And Wolfowitz said we are not going to be going after him for that."

In an interview, Mr. Wolfowitz said he did not recall the conversation. However, Pentagon documents obtained by Physicians for Human Rights through a Freedom of Information Act request confirm that the issue was debated by Mr. Wolfowitz and other officials.

As evidence mounted about the deaths, Secretary of State Colin L. Powell assigned Mr. Prosper, the United States ambassador at large for war crimes, to look into them in 2002. He met with General Dostum, who denied the allegations, Mr. Prosper recalled. Meanwhile, Karzai government officials told him that they opposed any investigation.

"They made it clear that this was going to cause a problem," said Mr. Prosper, who left the Bush administration in 2005 and is now a lawyer in Los Angeles. "They would say, 'We have had decades of war crimes. Where do you start?' "

In Washington, Mr. Prosper encountered similar attitudes. In 2002, Zalmay M. Khalilzad, then the White House coordinator for Afghanistan, made it clear that he was concerned about efforts to investigate General Dostum, Mr. Prosper said. "Khalilzad never opposed an investigation," Mr. Prosper recalled. "But he definitely raised the political implications of it."

Mr. Khalilzad, who later served as the American ambassador to Afghanistan, did not respond to a request for comment.

Mr. Prosper said that because of the resistance from American and Afghan officials, his office dropped its inquiry. The State Department mentioned the episode in its annual human rights report for 2002, but took no further action.

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See documentary here:

http://video.google.com/videoplay?docid=-8763367484184611493