Be afraid, be very afraid

I'm sorry to say it, but it looks to me like McCain is going to win this race. He's out their sliming Obama, and, like a true Democrat, Obama is too frightened to call him on it. And, when Obama does complain weakly, as he did today, the McCain crowd and the imbedded press conclude he's an uppity nigger who's flirting with white girls and demeaning McCain's service to America the Great.

Unfortunately, in addition to the usual limitations of frightened-by-their-own-shadows Democrats, Obama has decided to run this campaign with one arm tied behind his back, since he refuses to blame McCain for the McCain ads.

Meanwhile, I have yet to see a single Obama ad. Now, I don't watch much TV, but what's going on? I see McCain ads all the time -- most of them not paid for. You get a lot of free advertising from the cable channels by going over the top, and McCain knows this. They play his ads in a loop on the cable news channels. Has anyone yet to see a single Obama ad played for free by the media?

Goodbye America.

"You never know what's really going on."

Glenn Greenwald circulates important information about the privatizing of the governments spying functions. Are you down with that?

Suppose Obama had said this about the amendments to FISA? Maybe put the burden back on Bush and the defenders? How powerful do you think "soft-on-terrorism" attacks would have been if these issues had been prominently raised?

“It puts too much power in the hands of the president to spy on his or her political enemies. That wastes your money that they are supposed to use to fight terrorism. Also, too much of the nation’s spying – maybe too much information about you -- is being put in the hands of private corporations who are being hired to do the government’s supposedly super-secret work. That makes these changes to FISA completely irresponsible.”

Of course, there was something subterranean going on there that doesn’t meet the eye. Looking back, it looks obvious that nobody, not even those ostensibly heroic opponents (except maybe for Kucinich), had any intention whatsoever of killing those amendments, especially the one granting retroactive immunity against crystal-clear violations of the law by the telecom companies.

Indeed, as you look back at the number of Democrats inexplicably backing that bill favored by a deeply unpopular President, or giving lukewarm opposition at best, it more and more seems clear: it was the immunity that was driving the bill, not the alleged improvements to FISA. We can be fairly sure from public information that FISA before the amendments worked just fine from an espionage standpoint. It was no impediment whatsoever to any bona fide activity. Bush was adding in the so-called substantive improvements because he could get away with them, given that everyone, including the Democratic members of the intelligence committees who knew all about and caved in to the illegal electronic spying, were most desperate to get the immunity amendments to prevent their central role from becoming public.

As Jack Nicholson said in "Chinatown," explaining his fascination, "You never know what's really going on."

Cure Wall Street's hangover and te US economy with a 12-step intervention

By Paul B. Farrell, MarketWatch

Wall Street's drunk driving is running over the U.S. economy calling for a new solutions. Farrell proposes an intervention. He'll lay out some suggested solutions for Wall Street's chaotic distortions of conservative principles backfiring, creating a new American socialist economy.
In Step 12, add your solutions:
Step 1. Grow up, be a smart fifth grader, no cognitive dissonance!
In the political arena "cognitive dissonance" means "partisanship," a fancy term for being myopic, inflexible, blind to new ideas. You're a conservative Republican or liberal Democrat. Period. Solution: The new president better set the tone, blunt the childish bickering. However, if Wall Street stays drunk on "greed" cocktails, the chaos will continue. Why? Because like a drunken Joker, Wall Street loves chaos. Yes, Wall Street actually thrives on partisanship, chaos and gridlock. Solution: Greater transparency with any new "fancy financial instruments."
Step 2. Don't vote for a president, vote for his likely cabinet picks
Yes, conservative economics requires leaders of moral character. Too often Washington's 537 elected officials are puppets for 42,000 special interest lobbyists. Solution: Don't vote for the next president, vote for his team. Presidents pick 20 cabinet secretaries. Plus thousands of other officers, judges, ambassadors, SEC members, etc. Who he puts in key policy positions is far more important to America's future than who will get us out of Iraq. Will your new president pick myopic ideologues or real leaders?
Step 3. Fed and Treasury must stop Enron-style accounting gimmicks
A trillion here, a trillion there, and we've gone from a surplus of $5 trillion to almost $10 trillion in debt, in eight short years. Solution: The Fed, Treasury and Congress need to stop using Enron-style accounting gimmicks to hide our debt disaster. America needs to improve its credit, balance the budget, pay down war debts, reduce trade deficits and stop rewarding Wall Street's greed while piling more and more debt onto future generations.
Step 4. Deregulation created socialist housing, time to reregulate
Back in 1999 Congress killed the Glass-Steagall act, dismantling a 75-year-old wall between commercial and investment banking: That opened the door to all the "fancy financial instruments" that got Wall Street into a mess. Now add the new housing act. Solution: Restore Glass-Steagall. If we do not, expect a new binge, mergers of brokers and banks setting up the next meltdown because greed will drive drunks to start gaming American capitalism again, to pump earnings and stock prices, justify big bonuses and salaries, in an effort to regain their status as the global financial superpower.
Step 5. Balance budget, eliminate trade deficits, stop outsourcing
The father of free-market conservatism, Nobel economist Milton Friedman was right: Congressional spending is the big cause of inflation. Solution: No more deficit spending. Balance the budget, cool deficits, stop transferring America's wealth (and power) to Asia and nations with energy and natural resource reserves. All Americans better expect a major lifestyle change: Living within our means, something real drunks hate.
Step 6. Cycles happen, in economies, markets, politics. Accept it!
Conservative and liberal economic ideals run in cycles. Right now free-market ideologues drank too much, the bartender's cutting them off before they do another Joker imitation. Years of excesses pushed America onto the down side of the cycle, hurting economics, markets, policies. Solution: Tell the Fed to stop pandering to right-wing pre-election politics and get serious about inflation, like former Fed chief Paul Volker did back in the early 1980s.
Step 7. Reward savings, stop pushing consumer debt and spending
America has no savings policy. We are encouraged to spend, live the high life on debt, inviting disaster. Drunks love wasting money. Americans are now deep in debt. In one generation our savings rate dropped from 11% to below zero. Solution, new legislation: Increase tax benefits on savings, reign in credit-card-issuer excesses and limit card interest.
Step 8. Warning, Wall Street's been losing your money since 2000
Seriously, if you put $10,000 in the market in March, 2000 when the Dow peaked at 11,722, you've lost half your nest egg, adjusted for inflation. Wall Street's greed and drunken binge has distorted basic conservative principles, costing America hundreds of billions the past eight years. Solution: Forget the stock market. Read "The Millionaire Next Door." Build your own business. Buy real estate. Anything to avoid Wall Street.
Step 9. Stop degrading America's currency by printing money
Our blind free market obsession with "growth" isn't working, it's throwing jet fuel on inflation. Our dollar's lost value because myopic leaders are pushing short-term growth via a debt-funded trade policy that's killing America's long-term value. Solution: Stop funding the economy by increasing our debt to China and oil producers. Accept the fact that infinite growth is a quixotic fantasy in a world of limited resources.
Step 10. Free market health care fails 47,000,000 Americans
Big Pharma is gouging taxpayers with no-bid Medicare drug contracts. Solution: Open competitive bidding. The VA does it. With over $50 trillion unfunded liabilities for Social Security and Medicare benefits, we must reform this dangerous mess before it kills us. Besides, if conservative ideologues love the "free market" so much, why not compete for drugs contracts too? Unfortunately, self-interested drunks will steal for a fix.
Step 11. Conservative free-market policies inflated oil 300%!
Oil's inflated 300% in eight years. Solution: Stop digging supply-side holes. Focus on demand. Supply-side policies, like so many other distortions created by Wall Street's drunken binge, are killing American capitalism. Example: GM, the ultimate symbol of American capitalism, is near bankruptcy, turning America into a socialist economy.
Step 12. You tell us. Add a comment. What new policies do you want to work?
No whining and no attacking the other guy's ideas. Just comment on actions and policies you believe will work. Focus on solutions.

IRAN HAS REALLY DONE IT. More deadly than the nuclear

The Voice (issue 264 -) ran an article: Iran has really gone and done it now. No, they haven't sent their first nuclear sub in to the Persian Gulf . They are about to launch something much more deadly -- next week the Iran Bourse will open to trade oil, not in dollars but in Euros' This apparently insignificant event has consequences far greater for the US people, indeed for us all, than is imaginable. Currently almost all oil buying and selling is in US-dollars through exchanges in London and New York . It is not accidental they are both US-owned. The Wall Street crash in 1929 sparked off global depression and World War II. During that war the US supplied provisions and munitions to all its allies, refusing currency and demanding gold payments in exchange. By 1945, 80% of the world's gold was sitting in US vaults. The dollar became the one undisputed global reserve currency -- it was treated world-wide As `safer than gold'. The Bretton Woods agreement was established. The US took full advantage over the next decades and printed dollars like there was no tomorrow. The US exported many dollars, paying For ever-increasing amounts of commodities, tax cuts for the rich, many wars abroad, mercenaries, spies and politicians the world over.

Over subsequent decades the world's vaults bulged at the seams and more and more vaults were built, just for US dollars. Each year, the US spends many more dollars abroad than at home. Analysts pretty much agree that outside the US , of the savings, or reserves, of all other countries, in gold and all currencies -- that a massive 66% of this total wealth is in US dollars!

In 1971 several countries simultaneously tried to sell a small portion of their dollars to the US for gold. Krassimir Petrov, (Ph. D. in Economics at Ohio University ) recently wrote, 'The US Government defaulted on its payment on August 15, 1971 . While popular spin told the story of severing the link between the dollar and gold', in reality the denial to pay back in gold was an act of bankruptcy by the US Government.' The 1945 Breton Woods agreement was unilaterally smashed. The dollar and US economy were on a precipice resembling Germany in 1929. The US now had to find a way for the rest of the world to believe and have faith in the paper dollar. The solution was in oil, in the petrodollar. The US viciously bullied first Saudi Arabia and then OPEC to sell oil for dollars only -- it worked, the dollar was saved. Now countries had to keep dollars to buy much needed oil. And the US could buy oil all over the world "free" of charge. Oil replaced gold as the new foundation to stop the paper dollar sinking.Since 1971, the US printed even more dollars to spend abroad. The trade deficit grew and grew. The US sucked-in much of the world's products for next to nothing. More vaults were built. Expert, Cóilínn Nunan, wrote in 2003, 'The dollar is the de facto world reserve currency: the US currency accounts for approximately two thirds of all official exchange reserves. More than four-fifths of all foreign exchange transactions and half of all world exports are denominated in dollars. In addition, all IMF loans are denominated in dollars.' Dr Bulent Gukay of Keele University recently wrote, 'This system of the US dollar acting as global reserve currency in oil trade keeps the demand for the dollar `artificially' high. This enables the US to carry out printing dollars at the price of next to nothing to fund increased military spending and consumer spending on imports. There is no theoretical limit to the amount of dollars that can be printed. As long as the US has no serious challengers, and the other states have confidence in the US dollar, the system functions.

'Until recently, the US-dollar has been safe. However, since 1990 Western Europe has been busy growing, swallowing up central and Eastern Europe . French and German bosses were jealous of the US ability to buy goods and people the world over for nothing. They wanted a slice of the free cake too. Further, they now had the power and established the euro in late 1999. But the euro succeeded. Only months after the euro-launch, Saddam's Iraq announced it was switching from selling oil in dollars only, to euros only -- breaking the OPEC agreement.. Iran , Russia , Venezuela , Libya , all began talking openly of switching too -- were the floodgates about to be opened? Then planes flew into the twin-towers in September 2001. Was this another Houdini chance to save the US (petro) dollar and the biggest financial/economic crash in history? War preparations began in the US . But first war-fever had to be created -- and truth was the first casualty. Other oil producing countries watched-on. In 2000 Iraq began selling oil in euros. In 2002, Iraq changed all their petro-dollars in their vaults into euros. A few months later, the US began their invasion of Iraq . The whole world was watching: very few aware that the US was engaging in the first oil currency, or petro-dollar war.

After the invasion of Iraq in March 2003, remember, the US secured oil areas first. Their first sales in August were, of course, in dollars, again. The only government building in Baghdad not bombed was the Oil Ministry! It does not matter how many people are murdered -- for the US , the petro-dollar must be saved as the only way to buy and sell oil - otherwise the US economy will crash, and much more besides.

In early 2003, Hugo Chavez, President of Venezuela talked openly of selling half of its oil in euros (the other half is bought by the US ). On 12 April 2003, the US-supported business leaders and some generals in Venezuela kidnapped Chavez and attempted a coup. The masses rose against this and the Army followed suit. The coup failed. This was bad for the US . In November 2000 the euro/dollar was at $0.82 dollars, its lowest ever, and still diving, but when Iraq started selling oil in euros, the euro dive was halted. In April 2002 senior OPEC reps talked about trading in euros and the euro shot up. In June 2003 the US occupiers of Iraq switched trading back to dollars and the euro fell against the dollar again. In August 2003 Iran starts to sell oil in euros to some European countries and the euro rises sharply. In the winter of 2003-4 Russian and OPEC politicians talked seriously of switching oil/gas sales to the euro and the euro rose.

In February 2004 OPEC met and made no decision to turn to the euro. The euro fell against the dollar. In June 2004 Iran announced it would build an oil bourse to rival London and New York , and again, the euro rose. The euro stands at $1.27 and has been climbing of late. But matters recently became far worse for the US dollar. On 5th May Iran registered its own Oil Bourse, the IOB. Not only are they now selling oil in euros from abroad -- they have established an actual Oil Bourse, a global trading centre for all countries to buy and sell their oil! In Chavez's recent visit to London ; he talked openly about supporting the Iranian Oil Bourse, and selling oil in euros. When asked in London about the new arms embargo imposed by the US against Venezuela , Chavez prophetically dismissed the US as 'a paper tiger'. Currently, almost all the world's oil is sold on either the NYMEX, New York Mercantile Exchange, or the IPE, London 's International Petroleum Exchange. Both are owned by US citizens and both sell and buy only in US dollars. The success of the Iran Oil Bourse makes sense to Europe , which buys 70% of Iran 's oil. It makes sense for Russia , which sells 66% of its oil to Europe . But worse for the US , China and India have already stated they are very interested in the new Iranian Oil Bourse. If there is a tactical-nuclear strike on - deja-vu - `weapons of mass destruction' in Iran , who would bet against a certain Oil Exchange and more, being bombed too? And worse for Bush. It makes sense for Europe , China , India and Japan-- as well as all the other countries mentioned above -- to buy and sell oil in Euro's. They will certainly have to stock-up on euros now, and they will sell dollars to do so. The euro is far more stable than the debt-ridden dollar. The IMF has recently highlighted US economic difficulties and the trade deficit strangling the US-- there is no way out. The problem for so many countries now is how to get rid of their vaults full of dollars, before it crashes? The US cannot accept even 5% of the world's dollars -- it would crash the US economy dragging much of the world with it, especially Britain .

To survive, as the Scottish Socialist Voice article stated, 'the US , needs to generate a trade surplus to get out of this one. Problem is it can't.' To do that they must force US workers into near slavery, to get paid less than Chinese or Indian workers. We all know that this will not happen.

What will happen in the US ? Maybe a workers revolution, but looking at the situation as it is now, it is more likely to be a re-run of Germany post-1929, and some form of extreme-right mass movement will emerge. Does Europe and China/Asia have the economic independence and strength to stop the whole world's economies collapsing with the US ? Their vaults are full to the brim with dollars. The US has to find a way to pay for its dollar-imperialist exploitation of the world since 1945. Somehow, eventually, it has to account for every dollar in every vault in the world. Bombing Iran could backfire tremendously. It would bring Iran openly into the war in Iraq , behind the Shiite majority. The US cannot cope even now with the much smaller Iraqi insurgency. Perhaps the US will feed into the Sunni v Shiite conflict and turn it into a wider Middle-East civil-war. However, this is so dangerous for global oil supplies. Further, they know that this would be temporary, as some country somewhere else, will establish a euro-oil-exchange, perhaps in Brussels .

There is one `solution' -- scrap the dollar and print a whole new currency for the US . This will destroy 66% of the rest of the world's savings/reserves in one swoop. Imagine the implications? Such are the desperate things now swimming around heads in the White House, Wall Street and Pentagon. Another is to do as Germany did, just before invading Poland in 1938. The Nazis filmed a mock Polish Army attack on Germany , to win hearts and minds at home.

So, how is the US going to escape this time? The only global arena of total superiority left is military. Who knows what horrors lie ahead. A new world war is one tool by which the US could discipline its `allies' into keeping the dollar in their vaults. The task of socialists today is to explain to as many as possible, especially our class, that the coming crisis belongs purely to capitalism and (dollar) imperialism. Not people of other cultures, not Islam, not the axis of evil or their so-called WMDs. Their system alone is to blame. The new Iranian Oil Bourse, the IOB, is situated in a new building on the free-trade-zone island of Kish , in the Persian Gulf . It's computers and software are all set to go. The IOB was supposed to be up and running last March, but many pressures forced a postponement. Where the pressure came from is obvious. It was internationally registered on 5th May and supposed to open mid-May, but its opening was put off, some saying the oil-mafia was involved, along with much international pressure. Just Google `pertroeuro', and the story lies before you. From now on, anyone in the know will wake up every morning and, even before coffee, will check out the latest exchange rate between the euro and dollar.

Legal No-Man's Land

The United States is moving into legal no-man's land because the president refuses to ask the U.N. Security Council to renew the annual resolution that provides the legal foundation for the presence of our troops in Iraq. If this resolution is allowed to expire on Dec. 31, it will create a legal vacuum -- a vacuum that can't be filled by a presidential memo. The U.S. needs a solid legal basis for its continuing actions in Iraq to replace the U.N. mandate. There must be a new agreement on day-to-day issues such as the resupply of goods to the troops, which are usually exclusively resolved by the president in his capacity as commander in chief. But more important, this deal also covers questions at the center of far-reaching policy debates that rightly require congressional participation -- the timetable for the withdrawal of U.S. troops central among them. In the attempt to reach an accord with Maliki, the president made news by negotiating a "general time horizon" for withdrawing troops -- but he hasn't been willing to take the agreement to Congress and deal with Democrats in order to create a sound constitutional foundation for an enduring and bipartisan policy. Once the deal is signed by both parties, it's quite possible that the president will proclaim that this memo is special and can serve as a legal basis for all our activities in Iraq. If he does, he will be acting unconstitutionally. There are simply no precedents that support the presidential creation of legally binding commitments on the use of force without congressional consent. Resorting to the use of a memo also undermines democracy in Iraq, the very democracy we went to war to create. Just as it allows Bush to avoid Congress, it allows Maliki to make an end run around his own parliament, which, according to the Iraqi Constitution, must approve formal international agreements; Maliki is widely expected to sign the memo unilaterally. That will only make it easier for the next Iraqi prime minister to repudiate the entire deal on grounds that the memo, if binding, was made unconstitutionally.Despite the president's claim that he is creating a solid basis for future cooperation, his initiative will leave the fate of the American military at the mercy of Iraqi politics. At the same time, the expiration of the U.N. resolution, without a clearly legitimate alternative in place, could invite U.S. lawsuits challenging the ongoing use of force in Iraq. The courts may try to avoid deciding the merits of these cases, but the litigation would further polarize U.S. politics and leave the military uncertain about the legitimate range of its activities in a war zone. There is a simple solution that protects the troops and does not require us to forfeit our most basic constitutional values: Extend the U.N. mandate for six months and allow the next president to negotiate an agreement that can gain the support of Congress and the American people. It is past time for a lame-duck president to recognize that the country has paid a sufficient price for his extravagant unilateralism.

Bruce Ackerman and Oona Hathaway are professors of law at Yale and UC Berkeley, respectively.

Above the law

We learned today that the Department of Just Us has concluded that Alberto Gonzales, Monica Goodling, & Co. broke the law. What we will learn soon is that it doesn't matter because no one is going to prosecute them for it. Government, after all, is above the law.

Everything is Obama's fault

You've probably heard that McCain is telling us that the reason gas prices are so high is Obama.

But today's take on everything is Obama's fault comes from Reuters. As you probably already know, the Pentagon refused to allow Obama to visit the wounded US troops in Germany, arguing that it was a political event and hence improper.

Today, Reuters tells us that it was Obama who dissed the wounded troops:

PARIS (Reuters) - U.S. Democratic presidential candidate Barack Obama dropped a plan to visit wounded U.S. troops in Germany on Friday amid concerns the stop would be viewed as a political event.

Kos reports on an impromptu interview with a middle-aged woman working in an Austin studio he was using for a short TV talking-head gig:

But the woman continued on her own. "I'm really disenchanted with McCain." Oh, I responded, was she an Obama person? "No, I don't like him either. I don't trust him. And my daughter, she hates him."

I inquired further, why? "Because he's not patriotic, with the flag pin and the pledge of allegiance and his wife!" So we determined that she wasn't going to vote, which was disappointing to American democracy, but good for us because she had been a reliable Republican voter. My interest piqued, I dug a little further: given how the economy was going, people losing their homes, the cost of gas through the roof, none of that was as important as a flag pin?

"Well, they can't do nothing about those things." Aha. The Frank theory, of course. Well, I responded, what about health care, are you happy with your health care? She lit up, "I know no one who is happy with their health care!" and then segued into a rant about the disgraceful state of the health care system. Well, I responded, Democrats are working for universal healthcare, but Republicans have gotten in the way. But we'll be able to do it next year.

"Ain't no one who can fix that stuff," she sighed, slumping. That brief expression of fire and brimstone snuffed out in an instant. She was adamant that it was all hopeless. Fair enough. She didn't look like someone who'd had an easy life. Health care had touched a nerve, so who knows what sad story or stories she had to tell on that front. But Republicans had convinced her that government was powerless to do anything about it, so ... flag pins!

This national cynicism about government that the right wing has successfully drummed into national consciousness is another reason why it’s important to be able to describe the healthcare plan in a few simple words, and for Obama to keep up the drumbeat for needing everyone’s help to get it accomplished. Simplicity is what will help build that massive support.

Lies, Damn Lies and Government Inflation Statistics

By Kevin Phillips

Describing the decade that began in 2000 as the "naughties" or "oughties" offers a useful shorthand -- and particularly for people interested in discussing the U.S. economy's perilous dual pathway of rising commodity inflation coupled with financial assets deflation.

Ought and naught, of course, are two old-fashioned ways of saying "nothing" or "zero," appropriate for a painful decade that stretches from ought-one and ought-two to ought-nine.
But the term's negativism is also appropriate. As financial economists have begun to point out, between 2000 and mid-July 2008, the leading stock market yardstick, the Dow-Jones Industrial Average, dropped from a 2000 peak of 11,700 to a level 500-700 points lower. Moreover, allowing for eight years worth of inflation, by official data, the decline was nearer 25%, making the real return much worse than "naught." This is what people have to watch in a stagflationary economy, which the new Consumer Price Index numbers (June's one-month increase of 1.1 percent) have finally started to admit.

The possibility that inflation could even reach double digits should start to resolve today's central debate: whether this decade's unhappy U.S. economy is more like that of the depression 1930s or that of the stagflationary 1970s. Alas, there are elements of both.

To begin with, even the national media agree that home prices are in their biggest nationwide decline since the 1930s. Also, last month's slump in the Dow-Jones Industrial Average was the biggest June slide since the early depression year of 1930. And depending on who you talk to, the financial crisis is either the biggest since World War Two or the biggest since the 1930s.
Yet there is also escalating resemblance to the 1970s, when a global food and energy price surge followed the loose fiscal policy and boom of the Vietnam war era. No such trend existed in the 1930s. However, especially since 9/11 and then the invasion of Iraq, our decade has also seen has that kind of easy money and loose fiscal policy. As a result, global food and energy prices have been soaring.

The just-released inflation numbers suggest a gruesome possibility. Our own decade, like the years from 1966 to 1982, could see another severe economic downturn and stock market slump, but one partially camouflaged by fast-rising prices. Here is the precedent: between a Dow-Jones (intra-day) peak of 1000 in early 1966 and an August 1982 bottom of some 780, the Dow declined a nominal 22%. However, a truer calculation, adjusting for soaring inflation, put the real decline close to 70 percent -- a disguised disaster.

Could it happen again? Maybe. It is possible to imagine somewhat similar economic terrain. In 2010 or 2012, the Dow-Jones could easily be at 10,500 or 11,500, for a seemingly small ten-year or twelve year decline. But if simultaneous inflation has totaled some 30 percent, then the real decline would be 30-40% -- major league erosion, in other words.
And there is a worse possibility -- that the changed Consumer Price Index measurements in place since the 1990s have significantly underestimated inflation, and the true damage has already been much deeper. Why would Washington allow this, you might ask. The answer: that because a large chunk of the federal budget rises with inflation, the savings from understating it are enormous, however unfair to retirees and workers.

We are not talking small numbers. With global inflation heating up, the investment firm of Morgan Stanley recently noted that "The percentage of the world's population living under double-digit inflation is 42 percent. Six out of the ten most populous countries have inflation running at more than 10 percent."

Bill Gross of California-based PIMCO, the world's biggest bond manager, tells investors that interest rates on U.S. Treasury notes are inadequate. Inflation around the globe has averaged nearly 7 percent over the past decade, but the official U.S. inflation rate has averaged 2.6 percent. "Does it make any sense," says Gross, "that we have a 3 percent to 4 percent lower rate of inflation than the rest of the world?" And if Washington understates inflation by one percent, he adds, then gross domestic product has been overstated by that same amount. ("U.S. Inflation understated, Pimco's Gross says," MarketWatch, May 22, 2008)

Nor is Gross alone. In May, former Federal Reserve Chairman Paul Volcker told the Congressional Joint Economic Committee that "I think there's a lot more inflation than in those [CPI] figures." He said that the sharp run-up in housing before the recent implosion wasn't reflected in CPI data, adding that food and energy prices should not be excluded in gauging long-term trends. And when prices do go up, he said, government calculators are "much more inclined to say that there are improvements in quality" rather than an increase in inflation.
At Charles Schwab & Company, one of the nation's biggest money managers, chief economist Liz Ann Sonders wrote in June that "Over the past 30 years, major changes have been made to the calculation of the CPI due to "re-selection and reclassification of areas, items and outlets, [and] to the development of new systems for data collection and processing," according to the Bureau of Labor Statistics. If you eliminate those adjustments and calculate CPI as it would have been calculated in 1980, it would be nearly 12 percent today...No wonder clients constantly tell me they distrust government inflation data." ("Back to the 1970s?" Charles Schwab Investing Insights, June 19, 2008)

Cynics will point out that rigged data and sneaky book-keeping are par for the course in American finance. However, the accusations implicit in the Volcker, Gross and Sanders comments suggest a government scandal of the first magnitude. Maybe our presidential candidates should take a break from discussing how many troops to move from Iraq to Afghanistan or vice versa and start publicly discussing the extent to which a fundamental mismanagement of the U.S. economy rests on a framework of what can bluntly be described as lies, damn lies and statistics.

Author and commentator Kevin Phillips' most recent book is Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism, published by Viking in April

Shamelessness

Eric Alterman in the Media Matters blog notes the sheer chutzpah of Iraq War-promoting neo-conservatives who still feel no discomfort and perfectly qualified to criticize Obama for settling an exit timetable:

Which leads me to wonder if, when people like [O'Hanlon et al] . . . attack Barack Obama's plans for Iraq, it might be a good idea -- for the sake of fairness and intellectual honesty -- to preface their remarks by saying: "Of course, it was the judgment of people like me who caused this catastrophe, and nothing I predicted before the war has actually turned out to be true, while Obama was not only correct about its likely effects, but also prophetic. Still, for reasons I can not even begin to explain, much less justify, I feel qualified to instruct him that ..."

Could it be their shaky reputations they are desperately trying to hold onto, more than the fate of Iraq, that most concerns them? Just a thought.

Republican Smear Machine Roaring Back To Life

The only thing that could prevent the Democrats from matching the Republicans dollar-for-dollar this cycle is the right wing's shadowy network of third-party organizations that make up their devious smear machine. Terrified of losing their last shred of power in Washington, the Republicans are already rushing to resurrect the gang that brought you those Swift Boat Veterans for Truth. The latest news has Freedom's Watch, a vicious right-wing front group founded by Ari Fleischer, announcing that they are expanding their operations to include Senate campaigns. They're hiring key staff from all the worst places: the Bush campaign team, the national Republican Party, and a couple of infamous right-wing organizations. Freedom's Watch is certain to have plenty of money because, under campaign finance rules, they can raise huge sums from just a few anonymous donors. They spent $15 million on their launch campaign last year and have already spent more than $1 million on just two special elections in 2008. Some even speculate that their final total this year could be more than $200 million.This could spell big trouble for Democratic candidates unless DSCC does something about it. The DSCC can't level the playing field if Freedom's Watch neutralizes their fundraising advantage.

Obama on Iraq: Centrist-Pragmatist

From Barack Obama's recent speech on Strategy in Iraq

George Bush and John McCain don't have a strategy for success in Iraq - they have a strategy for staying in Iraq. They said we couldn't leave when violence was up, they say we can't leave when violence is down. They refuse to press the Iraqis to make tough choices, and they label any timetable to redeploy our troops "surrender," even though we would be turning Iraq over to a sovereign Iraqi government - not to a terrorist enemy. Theirs is an endless focus on tactics inside Iraq, with no consideration of our strategy to face threats beyond Iraq's borders.
At some point, a judgment must be made. Iraq is not going to be a perfect place, and we don't have unlimited resources to try to make it one. We are not going to kill every al Qaeda sympathizer, eliminate every trace of Iranian influence, or stand up a flawless democracy before we leave - General Petraeus and Ambassador Crocker acknowledged this to me when they testified last April. That is why the accusation of surrender is false rhetoric used to justify a failed policy. In fact, true success in Iraq - victory in Iraq - will not take place in a surrender ceremony where an enemy lays down their arms. True success will take place when we leave Iraq to a government that is taking responsibility for its future - a government that prevents sectarian conflict, and ensures that the al Qaeda threat which has been beaten back by our troops does not reemerge. That is an achievable goal if we pursue a comprehensive plan to press the Iraqis stand up.

To achieve that success, I will give our military a new mission on my first day in office: ending this war. Let me be clear: we must be as careful getting out of Iraq as we were careless getting in. We can safely redeploy our combat brigades at a pace that would remove them in 16 months. That would be the summer of 2010 - one year after Iraqi Security Forces will be prepared to stand up; two years from now, and more than seven years after the war began. After this redeployment, we'll keep a residual force to perform specific missions in Iraq: targeting any remnants of al Qaeda; protecting our service members and diplomats; and training and supporting Iraq's Security Forces, so long as the Iraqis make political progress.

We will make tactical adjustments as we implement this strategy - that is what any responsible Commander-in-Chief must do. As I have consistently said, I will consult with commanders on the ground and the Iraqi government. We will redeploy from secure areas first and volatile areas later. We will commit $2 billion to a meaningful international effort to support the more than 4 million displaced Iraqis. We will forge a new coalition to support Iraq's future - one that includes all of Iraq's neighbors, and also the United Nations, the World Bank, and the European Union - because we all have a stake in stability. And we will make it clear that the United States seeks no permanent bases in Iraq.

This is the future that Iraqis want. This is the future that the American people want. And this is what our common interests demand. Both America and Iraq will be more secure when the terrorist in Anbar is taken out by the Iraqi Army, and the criminal in Baghdad fears Iraqi Police, not just coalition forces. Both America and Iraq will succeed when every Arab government has an embassy open in Baghdad, and the child in Basra benefits from services provided by Iraqi dinars, not American tax dollars.

And this is the future we need for our military. We cannot tolerate this strain on our forces to fight a war that hasn't made us safer. I will restore our strength by ending this war, completing the increase of our ground forces by 65,000 soldiers and 27,000 marines, and investing in the capabilities we need to defeat conventional foes and meet the unconventional challenges of our time.

So let's be clear. Senator McCain would have our troops continue to fight tour after tour of duty, and our taxpayers keep spending $10 billion a month indefinitely; I want Iraqis to take responsibility for their own future, and to reach the political accommodation necessary for long-term stability. That's victory. That's success. That's what's best for Iraq, that's what's best for America, and that's why I will end this war as President. George Bush and John McCain don't have a strategy for success in Iraq - they have a strategy for staying in Iraq. They said we couldn't leave when violence was up, they say we can't leave when violence is down. They refuse to press the Iraqis to make tough choices, and they label any timetable to redeploy our troops "surrender," even though we would be turning Iraq over to a sovereign Iraqi government - not to a terrorist enemy. Theirs is an endless focus on tactics inside Iraq, with no consideration of our strategy to face threats beyond Iraq's borders.

At some point, a judgment must be made. Iraq is not going to be a perfect place, and we don't have unlimited resources to try to make it one. We are not going to kill every al Qaeda sympathizer, eliminate every trace of Iranian influence, or stand up a flawless democracy before we leave - General Petraeus and Ambassador Crocker acknowledged this to me when they testified last April. That is why the accusation of surrender is false rhetoric used to justify a failed policy. In fact, true success in Iraq - victory in Iraq - will not take place in a surrender ceremony where an enemy lays down their arms. True success will take place when we leave Iraq to a government that is taking responsibility for its future - a government that prevents sectarian conflict, and ensures that the al Qaeda threat which has been beaten back by our troops does not reemerge. That is an achievable goal if we pursue a comprehensive plan to press the Iraqis stand up.

To achieve that success, I will give our military a new mission on my first day in office: ending this war. Let me be clear: we must be as careful getting out of Iraq as we were careless getting in. We can safely redeploy our combat brigades at a pace that would remove them in 16 months. That would be the summer of 2010 - one year after Iraqi Security Forces will be prepared to stand up; two years from now, and more than seven years after the war began. After this redeployment, we'll keep a residual force to perform specific missions in Iraq: targeting any remnants of al Qaeda; protecting our service members and diplomats; and training and supporting Iraq's Security Forces, so long as the Iraqis make political progress.

We will make tactical adjustments as we implement this strategy - that is what any responsible Commander-in-Chief must do. As I have consistently said, I will consult with commanders on the ground and the Iraqi government. We will redeploy from secure areas first and volatile areas later. We will commit $2 billion to a meaningful international effort to support the more than 4 million displaced Iraqis. We will forge a new coalition to support Iraq's future - one that includes all of Iraq's neighbors, and also the United Nations, the World Bank, and the European Union - because we all have a stake in stability. And we will make it clear that the United States seeks no permanent bases in Iraq.

This is the future that Iraqis want. This is the future that the American people want. And this is what our common interests demand. Both America and Iraq will be more secure when the terrorist in Anbar is taken out by the Iraqi Army, and the criminal in Baghdad fears Iraqi Police, not just coalition forces. Both America and Iraq will succeed when every Arab government has an embassy open in Baghdad, and the child in Basra benefits from services provided by Iraqi dinars, not American tax dollars.

And this is the future we need for our military. We cannot tolerate this strain on our forces to fight a war that hasn't made us safer. I will restore our strength by ending this war, completing the increase of our ground forces by 65,000 soldiers and 27,000 marines, and investing in the capabilities we need to defeat conventional foes and meet the unconventional challenges of our time.

So let's be clear. Senator McCain would have our troops continue to fight tour after tour of duty, and our taxpayers keep spending $10 billion a month indefinitely; I want Iraqis to take responsibility for their own future, and to reach the political accommodation necessary for long-term stability. That's victory. That's success. That's what's best for Iraq, that's what's best for America, and that's why I will end this war as President.

Complicity

Glenn Greenwald really seems to hit the nail on the head as far as why so many Democrats caved in on granting retroactive immunity for the telecommunications companies in the FISA amendments: so many of the top Democrats knew what was going on. It also illuminates the challenge facing Obama, who above all wants to keep the party together, although I still think he could have finessed those difficulties in various ways without reversing course on his position during the primaries – and without the need to take the damaging hit to his image that he absorbed.

Wanted (desperately): The Next Big Thing

The Onion outdoes itself (courtesy of Paul Krugman’s blog). So true.

Recession-Plagued Nation Demands New Bubble To Invest In

The U.S. economy cannot survive on sound investments alone," Carlisle added.

Congress is currently considering an emergency economic-stimulus measure, tentatively called the Bubble Act, which would order the Federal Reserve to† begin encouraging massive private investment in some fantastical financial scheme in order to get the nation's false economy back on track.

Current bubbles being considered include the handheld electronics bubble, the undersea-mining-rights bubble, and the decorative office-plant bubble. Additional options include speculative trading in fairy dust—which lobbyists point out has the advantage of being an entirely imaginary commodity to begin with—and a bubble based around a hypothetical, to-be-determined product called "widgets."

The most support thus far has gone toward the so-called paper bubble. In this appealing scenario, various privately issued pieces of paper, backed by government tax incentives but entirely worthless, would temporarily be given grossly inflated artificial values and sold to unsuspecting stockholders by greedy and unscrupulous entrepreneurs.

"Little pieces of paper are the next big thing," speculator Joanna Nadir, of Falls Church, VA said. "Just keep telling yourself that. If enough people can be talked into thinking it's legitimate, it will become temporarily true."

Demand for a new investment bubble began months ago, when the subprime mortgage bubble burst and left the business world without a suitable source of pretend income. But as more and more time has passed with no substitute bubble forthcoming, investors have begun to fear that the worst-case scenario—an outcome known among economists as "real-world repercussions"—may be inevitable.

"Every American family deserves a false sense of security," said Chris Reppto, a risk analyst for Citigroup in New York. "Once we have a bubble to provide a fragile foundation, we can begin building pyramid scheme on top of pyramid scheme, and before we know it, the financial situation will return to normal."

Krugman also reminds us of this piece The Onion did in January 2001:

WASHINGTON, DC–Mere days from assuming the presidency and closing the door on eight years of Bill Clinton, president-elect George W. Bush assured the nation in a televised address Tuesday that “our long national nightmare of peace and prosperity is finally over.”
…
During the 40-minute speech, Bush also promised to bring an end to the severe war drought that plagued the nation under Clinton, assuring citizens that the U.S. will engage in at least one Gulf War-level armed conflict in the next four years.
“You better believe we’re going to mix it up with somebody at some point during my administration,” said Bush, who plans a 250 percent boost in military spending. “Unlike my predecessor, I am fully committed to putting soldiers in battle situations. Otherwise, what is the point of even having a military?”

Maybe sugar and spices from the South Seas will be it.

Media watch: AP = Fox?

For some time I’ve wondered about the balance of AP, the dominant source of newswire reporting. I couldn't put my finger on it, but now it looks like those reactions may have had some foundation.

It seems Ron Fournier, who became chief of AP’s Washington Bureau, has his own ideas about what reporting is, and feels free to dream up reports of Obama’s “arrogance.” Is that a classic case of looking for "whatever sticks" or what? Turns out he was also a great admirer of Karl Rove. So there’s your source for all those trailers at the bottom of screens everywhere, and those 15 second blurbs that sound a bit biased on the so-called TV and radio “news.” We’re into Vance Packard territory here -- subliminal devices as he wrote about back in the 50s in The Hidden Persuaders. Part of dealing with it is exposing it: AP, which above any press vehicle is supposed to be "just-the-facts-M'am," is pro-Republican, pro-Bush, pro-McCain.

Devaluation

Via Andrew Tobias:

According to this, “the US environmental protection agency (EPA) has lowered the value of a human life by nearly $1 million under George Bush’s administration. The EPA’s estimate of the ‘value of a statistical life’ was $6.9 million as of this May – down from $7.8 million five years ago . . . ”

In Euro terms, of course, your kids’ value has declined far more.

“Though it may seem like a harmless bureaucratic recalculation,” the Guardian continues, “the devaluation has real consequences. When drawing up regulations, government agencies put a value on human life and then weigh the costs versus the lifesaving benefits of a proposed rule. The less a life is worth to the government, the less the need for a regulation . . .”

Afghanistan

Kevin Drum wonders about our role in Afghanistan after Juan Cole says we should get out. Juan Cole is right. Afghanistan is unwinnable. The Soviets tried and the Soviets no longer exist. They were closer, had more friends in the region, and better intelligence inside the country and it still took them down. It will do the same to us. Osama said he would take down the Soviet Union, and he succeeded. He's also said he will take down the U.S. If we stay in Afghanistan, he will succeed at that too, particularly now that we've destroyed our armed forces by getting bogged down in Iraq. We have no idea what we're doing in Afghanistan, and every time we do something, we further alienate the populace by killing innocent civilians.

Frankly, I've always believed that, though there was a better argument for attacking Afghanistan than Iraq, it was a mistake from the beginning.

What we should do instead is focus on disrupting Osama and al Qaeda as much as we can. Getting bogged down in Afghanistan while they're enjoying all the comforts of home in Pakistan is not the answer.

Obama, your primary voters were more in "the center" than your DC consultants

Part of what was wrong with the FISA amendments vote by Obama, including immunity for telecommunications companies for their past actions, was simply the political implications. It signaled that now that he will be the Democratic nominee for President, it is not that he is “moving to the center,” but that he is listening to the Washington consultants' notion of where the center is. The way he responded to the criticism – wanting to “re-assure my friends on the left” of his progressive bona fides is an indicator that he is sliding into their worldview of politics that places everything on a left wing-right wing sliding scale.

There was nothing either left or right about opposition to the FISA amendments. Is the CATO Institute left? How about Bob Barr (Libertarian candidate, “Bob Barr Rips FISA and its Supporters”)? Or Ron Paul, Republican candidate for President, or Bruce Fein, historically a Republican who was a Deputy Attorney General in the Reagan administration? It is a big mistake to equate opposition to erosion of the Bill of Rights with “the left,” and it plays right into Republican themes.

Naturally, the Washington consultants who seem to have Obama’s ear now – and we should loudly demand that he listen more to the people again – think he had no choice but to vote in favor of the amendments: it was going to win anyway, and a nay vote would have allowed for GOP commercials saying he is soft on terrorism. No doubt, too, having so many Democrats supporting the bill was potentially a big embarrassment. But that is such a passive, scaredy-cat view that thinks about and plans everything in anticipation of how the Republicans will react. Of course, a campaign has to think about that and plan communications accordingly, but a self-censoring reactive instinct for always trying to avoid such attacks is not a rational response.

This was a teachable moment that would have allowed Obama to get out front on the issue with a preemptive attack on McCain. Attacking the bill could have been done in simple ways that would have resonated with all Americans – certainly liberals, but also the libertarians, independents and Republicans who still think of themselves as genuinely conservative (and not radically right wing like Bush and Cheney):

There are two huge flaws in the amendments, and John McCain with his devotion to George Bush’s policies doesn’t even see them. The bill gives the President – ANY President, and that could mean me – too much power to do electronic spying on all Americans for any reason. It could be for purely political reasons that have nothing to do with fighting terrorism; second, giving immunity to AT&T and other telecommunications giants who may have broken the law is the worst kind of corrupt Washington insiderism you can imagine. John McCain is very wrong to support these erosions of our Constitutional protections and this kind of continuing advantage for the K Street lobbyists.

Of course, the Republicans are going to try to attack me for this as being “soft on terrorism.” This is ridiculous. What the Bush administration and John McCain do not get is a fundamental truth. We are weakened in our fight against terrorism when we don’t stand up for the principles that have given us our leadership in the world. We are strengthened when we do. We are weakened whenever your tax money that is supposed to go to fighting terrorism is diverted to political spying. The Republicans will try to say this will allow the terrorists free rein. This is utterly ridiculous, too. Remember: we have the FISA law in place, now, and it works very well. These are amendments only. Nothing will be shut down if we reject this bad bill.

What is that, about a two-minute statement? Sentences could be pulled out, too, for delivering the central message for the sound-bite world of network TV and AP screen trailers. Obama could have reinforced his core message of change from Bush-Cheney authoritarianism and Washington insiderism, but instead came off as just another member of the insiders’ club. Instead of forward momentum, this bad decision by Obama has been a setback that has to be overcome. Any benefit that comes from Obama not seeming beholden to the left wing – which at this time in our history is a lot closer to the center than the DC pundits and strategists -- is more than offset by the erosion of enthusiasm in his base and the general perception that, like previous Democratic candidates, he is weak in not standing up for what he believes in. It will be overcome, but it is a barrier that need not have been thrown up at all.

Saying I’m going to pick up my marbles and go home is one of the reasons Bush is in the White House in the first place. Obama is still a great Democratic candidate overall. But he needs to stick with the ideas that won over Democratic voters in Iowa and Wisconsin and generated momentum like nothing ever seen before. Those voters were not “left,” they are not radical. They believe in motherhood and apple pie, too, just as much as they, like the majority of Americans, believe in staying out of stupid wars in countries we do not understand and repairing the safety net for all Americans that the Republicans have done all they could to destroy. They are the center now, not David Broder and the Washington Post editorial staff. The Barack Obama of the primaries was center, too. There is nothing wrong with hitting some themes that will disabuse the center of the notion that he is some kind of radical leftist -- the motherhood and apple pie themes that Obama has shown he believes in. Like black fathers and all that, or not excluding support for faith-based charities for their secular activities. If the truly far left are offended, that's probably a benefit. As demonstrated by the support of libertarians, however, weakening FISA protections was not that kind of issue.

New Yorker fueling the fire

I know a perfectly sane and with it, if elderly, woman who truly believes that Obama is an al Qaeda plant here in the US. If fact, she believes that all "these people" (meaning dark skinned foreigners) come to the United States to have their children here so the children can grow up as US citizens and become a Trojan Horse within the community to take over from the true (meaning white, Anglo-Saxon, protestant) Americans.

With the New Yorker cover portraying Obama in Muslim turban fist-bumping his gun-slinging wife, she will only find her views reinforced.

Happy Bastille day

Let's get Edwards back, please

More and more it looks like the match up will be McCain/Lieberman v. Obama/Hagel. Obama will support all the "market-based" proposals Hagel likes (read, "rich get richer while poor get poorer") while Hagel will support Obama on the war effort -- making the same mistakes in Afghanistan that we already have in Iraq. McCain and Lieberman will want to bomb, bomb Iran (and Syria, and who knows what else?) off the face of the earth (easier said than done).

Meanwhile, China will take over as the most powerful economy and military power in the world.

If this were the sixties, I'd get some treated sugar cubes and turn on and drop out.

Wish Upon A Pump

By Richard CohenTuesday, July 8, 2008; A15
Perusing the Sunday newspapers with plagiaristic intent, I come across an article about who's responsible for the current energy debacle. Politicians are mentioned along with the amazingly shortsighted auto executives and the oil industry itself. Names, lots of names, are dropped, everyone from the current President Bush to the previous Bush to Clinton, but not a mention of the culprit in chief, Ronald Wilson Reagan -- still, after all these years, the Teflon president.
Those of you with keen memories may recall that the energy crisis is not new. In 1977, Jimmy Carter called it the "moral equivalent of war." In the sort of speech a politician rarely delivers, he told a not-particularly-grateful nation that his energy program was going to hurt, but "a policy which does not ask for changes or sacrifices would not be an effective policy." The core of his initiative was conservation. Carter had earlier asked us to lower our thermostats and wear sweaters. He wore one himself.

Reagan, who succeeded Carter in the White House, wore only a smile. For him, there was no energy crisis. Whereas Carter had insisted that only the government could manage the energy crisis, Reagan, in his first inaugural, demanded that government get out of the way. Speaking of general economic conditions at the time, he said, "Government is not the solution to our problem." He went on to call for America to return to greatness, to "reawaken this industrial giant," and all sorts of swell things would happen. It was wonderful stuff.

To contrast the two speeches is like comparing the screeching of a cat to the miracles of Mozart. Yet today, Carter's speech reads as prescient. Most of his dire predictions -- "It is a problem we will not solve in the next few years, and it is likely to get progressively worse through the rest of this century" -- have generally come true, although not quite as soon or as calamitously as he had warned. The pity of it all is that in American politics, being right is beside the point.

It is not my intention to pummel the late Ronald Reagan for what he did or did not do back in the 1980s. It is my intention, though, to suggest that Reaganism -- to which Republicans now swear allegiance -- has outlived its very short usefulness and ought to be junked. This is not to say that government is the answer to all our ills. It is only to note that if you think the answer is private enterprise, then drive to the nearest gas station and admire the prices brought to you by private companies.

The worst part of Reaganism was its political success. It left behind a coterie of panting acolytes who learned from Reagan himself that optimism, cheerfulness, an embrace of magical thinking and the avoidance of the painful truth was the formula for victory at the polls. For a time, it worked -- the cost of gas went down -- and Carter, that scold in the silly sweater, was banished. As they say in New Orleans, "Laissez les bons temps rouler!" (Let the good times roll!) Upbeat? You bet. But not a business plan.

In "The Age of Reagan," Princeton historian Sean Wilentz posits that Reagan was the transformative president of our times. I don't know about that. But I do know that in the recent primary debates, Republican after Republican invoked Reagan the way Democrats once did Roosevelt, and they vowed, knock on wood, to be a similar kind of president. If they meant what they said, that would mean no energy plan worth its name and, worse, chirpy assurances to the American people that all would be well.

This is the doleful legacy of Reaganism. We have become a nation that believes that you can get something for nothing. We thought that the energy crisis would be solved . . . somehow, and that no one would have to suffer. We still believe in the magical qualities of America, that something about us makes us better. Yet we have a chaotic and mediocre education system that desperately needs more money and higher standards, but we think -- don't we? -- that somehow we will maintain our lifestyle anyway. Hey, is this America or what?

Somewhere in his peripatetic travels, the much-maligned Jimmy Carter -- an artless politician, to be sure -- must scratch his head at the reverence still accorded Reagan. The way things are going, the Gipper's visage will be added to Mount Rushmore. Not that anyone will notice. It'll be too expensive to drive there.

McCain's Bushian fuzzy math on Colombia Free Trade Act

McCain Radio Ad: "Colombia Trade" (Tony Villamil speaking, ex-director of Tourism, Commerce and Economic Affairs of Florida).

"When it comes to a strong economy for our state, commercial trade with Latin America is crucial. Three-quarters of Florida's exports are with Latin America, and the Colombian Free Trade Agreement would create even more opportunity.In this election, there are some that talk about revising the Free Trade Agreement with Mexico and Canada and oppose the Agreement with Colombia. This would hurt our economic future.Last year Florida's exports to Latin America reached almost $45 billion dollars. Colombia is Florida's third most important export market and this trade agreement would create almost 5,000 new jobs.John McCain supports the Colombian Agreement, knows about our alliances with our hemisphere and understands our economy grows thanks to trade.Remember who stands for prosperity in Florida, our country and our hemisphere. His name is John McCain.John McCain: I'm John McCain and I approve this message.Announcer: Paid for by John McCain 2008. "

The false figures begin with the ad's claim that "three-quarters of Florida's exports are with Latin America." That's wrong. According to the trade statistics generator from the U.S. Department of Commerce, all of Florida's international exports totaled close to $45 billion dollars in 2007, and the state's exports to Latin America AND the Caribbean last year equaled nearly $24 billion. That means 53 percent of Florida's exports go to the region, much closer to half than three-quarters. Exports to Latin America by itself would be even smaller.
This also means the ad's assertion that "last year, Florida's exports to Latin America reached almost 45 billion dollars" is false. As we just pointed out, that was the figure for the state's exports to all countries, not just Latin America. Finally, the ad trips up when it claims: "Colombia is Florida's third most important export market." While we don't know how to measure the "importance" of a market, we can quantify the dollar value of exports sent to each. And by that metric, Colombia ranks fifth – not third – in Florida exports, according to figures from the Commerce Department, as well as from the Census Bureau. But McCain should know this already, because he said it himself on May 20, in an article he wrote for Miami's Latin Business Chronicle.

McCain, Latin Business Chronicle, May 20, 2008: Colombia today stands as Florida's fifth largest export market – Florida exported $2.1 billion worth of goods there last year – and now the Colombians are offering to drop their barriers to American goods.

Enterprise Florida, a nonprofit partnership between business leaders and state government that promotes economic development in the state, estimated in 2006 that a trade agreement with Colombia could lead to an "additional 4,483 jobs" in the state. That's actually closer to 4,000 jobs than to 5,000. Even the 4,483 figure is suspect. For one thing, it is an estimate only of jobs gained from increased exports, without any offset for jobs possibly lost. Furthermore, a more recent report from the International Trade Commission found that the trade agreement was likely to have "minimal to no effect on output or employment for most sectors in the U.S. economy."

Moreover, Enterprise Florida counts goods and services that simply pass through the state on their way from somewhere in the U.S. (or even other countries) to a location abroad. Similarly, the numbers the campaign used for Florida's total exports to Latin America and Colombia's ranking as an export market represent all goods that went through Florida, regardless of where they came from. None of the figures refer only to goods or services that originated in Florida, which is what we think any reasonable person would take the term "Florida's exports" to mean. As Enterprise Florida analyst Stuart Doyle confirmed, these exports "originate in Florida or they can originate in a different state and are exported through one of [Florida's] two custom districts, which are Tampa and Miami." Enterprise Florida also lists the Department of Commerce figures that we cited, calling them "Florida-origin export data." Doyle told us that they represent "Florida goods going to other countries." That's the measure of "exports" used by the Department of Commerce.

Voters should not be misled by the fanciful figures and bad math in this ad.Republished with permission from factcheck.org.
Sources "Foreign Trade Statistics: State Exports for Florida." U.S. Census Bureau Web site. Accessed 3 July 2008. Issenberg, Sasha. "McCain Knits Trade, Security Issues: Foreign Trips Fit His Strategy." The Boston Globe, 7 July 2008.Mason, Jeff. "McCain Arrives in Mexico for Free Trade Push." The Boston Globe, 2 July 2008. McCain, John. "McCain: Colombia FTA Benefits U.S." Latin Business Chronicle, 20 May 2008. Press Release: "John McCain 2008 Launches New Spanish Radio Ad: 'Colombia Trade.' " Earned Media Web site, accessed 3 July 2008.Rohter, Larry. "McCain Heads Today for Colombia, Where Adviser Has Long Had Ties." The New York Times, 1 July 2008. Trade Stats Express—State Export Data: "2007 NAICS Total All Merchandise Exports From Florida." U.S. Department of Commerce Web site, accessed 3 July 2008.

Hurting, Not Whining

From Progress, 7/10/08
Yesterday, in an interview with the Washington Times, former Sen. Phil Gramm, the so-called "econ brain" of presidential candidate Sen. John McCain (R-AZ), remarked that the United States has "sort of become a nation of whiners." "Thank God the economy is not as bad as you read in the newspaper every day." "You've heard of mental depression; this is a mental recession," he said. Yesterday afternoon, McCain said that Gramm "does not speak for me," despite the fact that Gramm's comments mirror what McCain said in April: "A lot of our problems today, as you know, are psychological." Gramm's apparent desire to keep to a minimum discussion of the real and painful effects of the nation's stalling economy is not surprising, given that he shares the same harmful conservative ideology as McCain and Bush. Gramm played a key roll in gutting many of the institutions designed to keep the economy sound. Serving Chairman of the Senate Banking Committee between 1999 and 2001, he "routinely turned down Securities and Exchange Commission Chairman Arthur Levitt's requests for more money to police Wall Street." Later, he "pushed to end oversight" of energy futures trading for a key campaign contributor and his wife's onetime employer, Enron. Around the same time, "Gramm pushed through a historic banking deregulation bill that decimated Depression-era firewalls between commercial banks, investment banks, insurance companies, and securities firms." The financial maneuvers enabled by Gramm's legislative measures would become "the heart of the subprime meltdown." More recently, it was revealed that Gramm was "being paid by a Swiss bank to lobby Congress about the U.S. mortgage crisis at the same time he was advising McCain about his economic policy." But while Gramm is able to insulate himself, and even profit from, the negative effects of his legislative and lobbying record, the vast majority of Americans are not so fortunate. Here are 10 real examples of how Americans are hurting in the current economy:

Thank George and friends for the value explosion: 0.6% per year!!!

As I write this, the Dow is at 11,075. Earlier today, it dipped into the 10,000s.

The day before a Republican President took office in 2001, with a Republican majority in both houses of Congress, the Dow had closed for the week at 10,588. So seven-and-one-half years later, the dominant index of major equities has grown 487 points. That’s an annual growth rate of roughly zero-point-six per cent (0.6%) per year.

And a real annual decline of about 2.5% per year.

So, speaking roughly but righteously, Mr. Wealthy’s annual income at the top marginal tax rate of $1,000,000 in 2001 has declined in real terms to about $800,000. “Yeah, but who cares? At least with the Republican tax cuts I’m only paying 36% on most of it, instead of 39.6%. That means I’m only paying $288,000 in taxes on it, rather than $396,000. Ha!!”

“Yes, but you had left over from that $604,000 in 2001, and now you only have $512,000,” you say.

“It’s the principle of it,” says Mr. Wealthy. “Everyone knows the Republican Party is the party that’s good for business.”

With Democrats like these ...

Nancy Pelosis is urging the Judiciary Committee NOT to charge Karl Rove with contempt of Congress. I guess she's afraid somebody might Swift Boat her.

Bush: "Forget the law, I'm the dictator."

Now, you can't even hire your own attorneys to defend you -- even if you can afford to pay them -- if the government considers you a terrorist:

GUANTANAMO BAY NAVY BASE, Cuba -- The U.S. government is blocking the American Civil Liberties Union from paying attorneys representing suspected terrorists held here, insisting that the ACLU must first receive a license from the U.S. Treasury Department before making the payments.

ACLU director Anthony Romero on Tuesday accused the Bush administration of "obstruction of justice" by delaying approval of the license, which the government argues is required under U.S. law because the beneficiaries of the lawyers' services are foreign terrorists.

McCain's Budget Shell Game

From the DC Underground:

Today, the McCain campaign is going to put out a paper promising to balance the federal budget deficit by the end of McCain's first term. Much will be written tomorrow about just how preposterous the budgeting claims are, especially since McCain is also promising a big new round of tax cuts. But there's one gem I want to zero in on -- this line, as quoted from Mike Allen's piece just out in The Politico:

The McCain administration would reserve all savings from victory in the Iraq and Afghanistan operations in the fight against Islamic extremists for reducing the deficit. Since all their costs were financed with deficit spending, all their savings must go to deficit reduction.
How much does he expect those savings are going to come to? Is this a line item in the savings tally? This has to be one of the better examples of McCain's penchant for policy by slogan seeping out from the campaign trail into actual policy proposals.

McCain's people do realize that there is no budget mark down for 'victory'. Whatever victory's other merits, it is only reductions in expenditures directed (in the broadest sense) toward the war zones that get you actual budget savings.

Is McCain saying that both wars will be over by the end of his first term? And if so, is that victory with all or most of the troops staying on post-victory, as he's implied? Or will they all have left by then? Remember, Adm. Mullen says we need more troops in Afghanistan to deal with spiraling situation developing there. But we don't have any more because of our commitments in Iraq. And if his four-year balanced budget promise is premised on rapid victory in both theaters, isn't that sort of arbitrary timelines on steroids?
--Josh Marshall

All at Sea: Logic of off-coast oil drilling deeply flawed

By Thomas Kostigen, MarketWatch
Last update: 7:26 p.m. EDT July 3, 2008

SANTA MONICA, Calif. (MarketWatch) -- Coastal drilling for oil is mindless, not only from a supply perspective but from an environmental perspective. The amount of oil to be found off
our nation's coasts would be a trickle of what's needed to meet consumer demand -- and that's what the oil companies say! Yet, they and their supporters in Congress move forth trying to lay claim to new oil leases on land and sea.

The salvo waged by critics is that as it stands oil companies are using only about one-quarter of the leases they already have. The oil companies' response: "It takes a long time to drill."
Exactly. About 20 years, in fact. Any oil to be had in Alaska, for example, wouldn't make it to us until 2028. And do you know what that would mean in terms of savings? The Energy Information Administration estimates the best-case scenario price drop would be about 1% per barrel of oil. One percent. Wow -- sign us up! That's about as good a savings as the gas-tax reprieve. Meaningless.

This all, mind you, is if the oil companies decide to send any Alaskan oil they may find our way. The reserves they already have there are mostly shipped to other countries. Sort of makes you wonder how in the name of national security and energy security (or any other phrase where they can work in the word security) this can all be justified. (Much of BP's Alaskan oil from Prudhoe is shipped to Japan which is closer than the East Coast.) Speaking of security, it's rather curious but no one much speaks about the environmental security of all this offshore drilling talk in the context of the Supreme Court's ruling to halve the fine to Exxon for its Valdez oil spill.

Drilling creates hazards, and costs the economy dearly. Take a look at the local Alaskan economies that suffered because of the Valdez spill. Not a pretty picture.
Now let's tackle climate change. Drilling for more oil that again the oil companies themselves admit is not a sustainable energy supply will eventually put more carbon dioxide into the atmosphere, whether through our tailpipes after the oil has been turned into gasoline or from our furnaces after we use it to heat out buildings and homes or from any other means for which it's burned.

According to the most recent International Energy Agency forecasts, consumption is set to rise 50% by 2030. That means we'll have to increase oil supply by that much to meet demand. It isn't going to happen.

Reward for real change

The oil companies are fooling themselves by coastal drilling and at the same time they are trying to con us into buying into their scheme. No more predictable oil supply, folks, no more business. Profits tumble. Stock prices drop. Now imagine if an oil company such as Exxon Mobil with all of its infrastructure and distribution (i.e. gas stations) announced a plan where it would wean itself off petroleum supply while at the same time staging in an alternative sustainable energy supply. Not a "We're exploring...," or "We're investing...." No, this would be a "This is how we are going to do it so by 2030 we'll be supplying you with a 100% different source of energy."
Its long-term prospects would be massive. Its market value would shoot through the roof and not be questioned. It would endear the $3 trillion or so of socially responsible investment dollars out there. And it would serve as a model for change, for the future. It would become the Google of energy.

Instead, oil companies are acting like cigarette companies just before they took their long, long fall amidst fines and court cases: staring down the face of warnings and trying to make us believe a newfangled cigarette (read supply of oil) will save them.

Dodd 's profile in courage

The word needs a P, but if Rove is lurking, it might end up a rofile.

Between FISA and Dodd: One of the Needed 41 rofiles in courage

Recently I requested my colleages to pepper Sen. Reid with demands to pull the FISA bill.
Chris Dodd has provided an elegant reason why.
Posted July 7, 2008 11:48 AM (EST)
Opponents of Retroactive Immunity Live To Fight Another Day
That the United States Senate would even have to debate whether to uphold the rule of law is infuriating enough. But two weeks ago, the contrast in priorities became too much: as the Senate refused to address the tide of foreclosures impacting more than 8,000 people every day, it was poised and ready to provide immunity to giant corporations that may have broken the law.
So, I did what I felt I had to: I said no. By blocking a vote on the Foreign Intelligence Surveillance Act (FISA), the fight to stop retroactive immunity goes on -- for another week anyway. The Senate will take the bill up again this week as it returns from the July 4th recess.
Of course, such procedural jujitsu was merely the latest twist in a fight that has now spanned nearly a year. During that time, I have used every forum available to me -- from the Senate floor to the presidential campaign to town halls around the country -- to talk about the importance of the rule of law and why a seemingly obscure dispute between government and corporations in our legal system is critical to upholding it.

A brief overview: we learned after September 11, 2001 that giant telecom companies worked with this administration to compile Americans' private, domestic communications records into a database of enormous scale and scope. The Bush administration appears to have convinced those corporations to spy on Americans for five years, in secret and without a warrant.
That we know this happened is not because the government told us -- they say the matter is classified. And it is not because one of the telecoms told us. We may not have known any of this at all were it not for serious investigative journalists. And we wouldn't know how deep the problem really went without an Internet technician by the name of Mark Klein, a 22-year veteran of AT&T who one day at work found a switch that channeled Internet traffic culled from millions of living rooms, bedrooms, kitchens and offices across the nation to a secret room operated by the National Security Agency. Mr. Klein was old enough to remember when a law was passed to prevent this sort of unchecked spying operation from happening:
FISA -- a law written back in 1978 in the wake of Watergate that ensured the government had both the tools it needed to defend the country and a process in place for judicial review to put checks on executive authority.

Most agree that this law needs to be modernized, as it has been many times over the years. But this time, the president is asking Congress to do something much more: to shield the telecoms from any judicial review of their actions. He wants Congress to declare spying without a warrant both constitutional and necessary to defend this country. It is neither.

That is why I have done everything I can to stop retroactive immunity from being included in the FISA bill. As written, this bill does not say, "Trust the American people." It does not say, "Trust the courts and judges and juries to come to just decisions" about what happened at the telecoms. Rather, retroactive immunity sends this message:
"Trust me" -- a message that comes straight from the mouth of President Bush. I would never take "trust me" for an answer, not even in the best of times. Not even from a president on Mount Rushmore.

Besides, what exactly is the basis for that trust? Retroactive immunity may be a disgrace in itself, but it is merely the latest link in a long chain of abuses when it comes to contempt for the rule of law -- from the Justice Department basing its work on political calculations, to the shame of Abu Ghraib, to the passage of the Military Commissions Act, which sanctioned torture. The list goes on and on. To many around the world, that is what America has become. Where Normandy, the Marshall Plan, and the Nuremberg trials invoked the image of America for previous generations, those coming of age today will now think of Guantanamo, waterboarding, and torture. People now have a basis upon which to ask whether the president serves the law or the law serves the president. Did the telecoms break the law? I don't know.
But I am sure that if we pass retroactive immunity we'll never know. A handful of favored corporations will remain unchallenged. Their arguments will never be heard in a court of law. The truth behind this unprecedented domestic spying will never see light. And the cases will be closed forever.

I'm under no illusion that we will be able to keep this bill from the president's desk forever; two weeks ago, I was disappointed that we could only muster 15 votes out of the necessary 41 to block consideration of FISA. But every second we can continue to raise this issue and hold this Administration's feet to the firefor its contempt for the rule of law these last seven years is another opportunity to keep asking: When we undermine the rule of law, do we make our nation more secure -- or less? Over the next few days, that's the question we'll be asking. But I think we already know the answer.

Proud to be an American

On this fourth of July weekend, aren't you just bursting with pride to be an American?

SEOUL The American colonel, troubled by what he was hearing, tried to stall at first. But the declassified record shows he finally told his South Korean counterpart it "would be permitted" to machine-gun 3,500 political prisoners, to keep them from joining approaching enemy forces.

The Simple Arithmetic of a Fraudulent Surge

by David Fiderer, July 4, 2008 04:31 PM (EST)

How many troops do we have to replace the ones deployed in Iraq today? You can make a good case the number is zero. But any stab at answering the question punctures the fantasy that the surge is an unalloyed success. And our reluctance to even consider the question tells us something else, that the surge was a sham intended to delay the day of reckoning. From its inception, the Iraq war strategy was like a plan to fly across the Pacific without enough fuel to get to the other side. The surge made the plane fly faster. Apparently, even George Packer doesn't quite get it. So I'll spell it out. Our troops are like jet fuel. "How often can a soldier be put in harm's way and still desire to remain in the Army? The answer is different for every soldier, but the deployment ratio range seems to be somewhere in be tween 3:1 and 5:1. That is, for every brigade that is forward deployed in combat operations or in a 'hardship' tour, there must exist between three and five brigades to sustain rotation. Thus a 3:1 rotation base would find soldiers deployed on such missions one-third of the time; a 5:1 rotation would see them deployed one fifth of their service time. For the purposes of this assessment, a 4:1 deployment ratio is assumed." TheThin Green Line by Andrew Krepinevich, August 14, 2004. A study commissioned by the Pentagon. U.S. Department of Defense Policy calls for a 2:1 deployment ratio. Senator James Webb's bill, to requiring a 1:1 deployment ratio, was killed by Republicans.
The Baker-Hamilton Commission got it. The Iraq Study Group also grasped the other realities that our government and mainstream press continue to ignore. Iraq's leaders are much closer to Iran than they are to the United States. As reported last month by Forecast International Defense Intelligence Newsletters, Iraq's defense minister signed signed a memorandum of understanding on defense cooperation with Iran. And while the strategic interests of the government's of Iraq and the U.S. are different, there is no avoiding the fact that any security solution requires the proactive involvement of Iraq's neighbors. They control transit across the common borders and they have absorbed millions of Iraqi refugees. As David Ignatius' column makes clear, there is no way we can gain the upper hand over the Iranians by our troop presence, because we can never match their ability to secure intelligence. Iranians can blend in to Iraq (as they have for hundreds of years) whereas our troops cannot. That's why James Baker said it made no sense to pick and choose from the ISG proposal as if it were a fruit salad. And of course the surge played out exactly as the ISG report said it would.

The surge was like all the other bait-and-switch scams used to spin away the implications of our Iraq policy. Witness Robert Gates' empty promises to end the stop loss program and shortening tours of duty. During his confirmation hearings, Gates emphasized that "all options are on the table" for Iraq and as soon as he took office, all of the options of the ISG report were disregarded in favor of Petraeus' surge. And then the stalling began. First, the surge needed time to work. Then, because the surge was working well, there would be a "pause" in the rate of troop withdrawals, which was a euphemism for making troop levels higher than ever. Then, we were told to hold off on any judgement until Petraeus gave his report the following month. Now, we hear that the surge is such a success that the handoff should be slow and gradual. If we accept the mainstream narrative on its face, the surge worked. It transformed the U.S. troop presence from being counterproductive to being indispensable for maintaining stability. But can we continue with anything close to the current level of troops deployed over there?
Here's a very incomplete laundry list of warnings that the answer is clearly, "No."
(By the way, guess how much The White House budgeted for military operations in Iraq and Afghanistan after 2009. Zero.)

1. "Mullen's Choice: Troops For Afghanistan Or Troops For Iraq," Washington Independent, July 3, 2008.
2. "Iraq Troop Boost Erodes Readiness, General Says," The Washington Post, February 16, 2007
3. "U.S. deploys more than 43,000 unfit for combat," USA Today, May 8, 2008 4. "US Sent Medically Unfit Soldiers to Iraq, Pentagon Acknowledges," Knight-Ridder, March 25, 2004
5. "Pentagon Ends Time Limit On Guard, Reserve, Stretched Thin In Iraq, Army Abandons 24-Month Limit On Time Citizen-Soldiers Must Serve," CBS/AP, January 12, 2007
6. "Col.: DOD delayed brain injury scans," USA Today, March 18, 2008
"For more than two years, the Pentagon delayed screening troops returning from Iraq for mild brain injuries because officials feared veterans would blame vague ailments on the little-understood wound caused by exposure to bomb blasts, says the military's director of medical assessments."
7. "Scientists: Brain injuries from war worse than thought," USA Today, September 23, 2007.
"Scientists trying to understand traumatic brain injury from bomb blasts are finding the wound more insidious than they once thought."They find that even when there are no outward signs of injury from the blast, cells deep within the brain can be altered, their metabolism changed, causing them to die, says Geoff Ling, an advance-research scientist with the Pentagon."The new findings are the result of blast experiments in recent years on animals, followed by microscopic examination of brain tissue. The findings could mean that the number of brain-injured soldiers and Marines -- many of whom appear unhurt after exposure to a blast -- may be far greater than reported, says Ibolja Cernak, a scientist with the Johns Hopkins University Applied Physics Laboratory."
9. "Invisible Wounds of War," a report by The Rand Corporation, April 2008.
"We estimate that approximately 300,000 individuals currently suffer from PTSD or major depression and that 320,000 individuals experienced a probable TBI [traumatic brain injury] during deployment."About one-third of those previously deployed have at least one of these threeconditions, and about 5 percent report symptoms of all three. Some specific groups,previously understudied--including the Reserve Components and those who have leftmilitary service--may be at higher risk of suffering from these conditions.Of those reporting a probable TBI, 57 percent had not been evaluated by a physician for brain injury."