Washington's Blog: September 2008

Tuesday, September 30, 2008

If You're Looting the Treasury, Give it To US

If the government is looting the treasury to the tune of of $700 billion plus, give the American people the money, not the con artists who got us into trouble in the first place.

We'll use the money to pay off our mortgages, credit card and other debt, and to stabilize the economy.

Instead of the peanuts the government gave us in the "stimulus package", this would have a real benefit, and would largely solve American's economic problems.

Say it Congress, phone it into talk shows, put it in emails and bumper stickers and freeway blogs:

"If You're Looting the Treasury, Give it To US"

The last official act of any government is to loot the treasury. If their looting the treasury, give it to the people.

As a reader named Ron puts it, distributing money to the taxpayers instead of the fat cats has many benefits:

"Pay off your mortgage - housing crisis solved.
Repay college loans - what a great boost to new grads
Put away money for college - it’ll be there
Save in a bank - create money to loan to entrepreneurs.
Buy a new car - create jobs
Invest in the market - capital drives growth"

Bottom line: If the loot is given to the financial elite, it will probably be the last official act of the government. But if it is distributed to the American people, it could create a true and sustainable economic recovery.

Monday, September 29, 2008

Ammunition To Use Against the "New, Improved" Bailout Proposal

The financial elite will propose a "new, improved" version of the bailout bill in the next couple of days. Here is some advanced ammunition to use against the proposal:

Paulson and Congress pretended that the first bailout bill capped the initial round of funding to $200 billion, and capped executive compensation. However, treasury officials have admitted (when they thought the public wasn't listening) that the restrictions on disbursing more than 200 big ones and CEO compensation were lies that wouldn't be enforced (you can listen to their statements yourself: here's part 1 of 5)

The boys pretended that the bailout was limited to $700 billion. But that was not true (see the final vesion of the bailout proposal on page 40). Indeed, a Bloomberg analyst says that the bailout could balloon to $5 trillion dollars. And remember that "in the months before the March 2003 Iraq invasion, the Bush administration estimated the Iraq war would cost no more than $50 billion", but it will end up costing at least $3 trillion dollars

The snake oil salesmen said the bailout was needed to save the economy. But most experts who have looked at the bailout said it wasn't needed, wouldn't have worked, and would actually have made the economic crisis worse

Unless the new bailout proposal will actually help Americans, use the above proven lies by the proponents of the original bailout monster to argue that the liars cannot be believed, and that the fruit of the poisonous tree is itself poisonous.

Financial Crisis Will Deepen Until Trust in Free Market is Restored

The worldwide financial crisis isn't about the subprime meltdown, although it might have first surfaced there for all to see.

It is not even ultimately about derivatives, although derivatives are by the largest risk numbers-wise (indeed, the nominal value of derivatives dwarfs the size of the world-wide economy).

It is - at core - a crisis of trust.

As long-time financial writer Will Hutton says:

"Such was the break down in trust and sense of panic that some of the most familiar names in British high street banking would not lend to each other at all or, at best, just overnight. Instead, the Bank of England had to supply tens of billions to banks who found the normal sources of funds blocked.

***
Unless there is a radical and government-led change in ownership, structure, regulation and incentives so that the principles of fairness are put at the heart of the Anglo American financial system - proportionality of reward and fair distribution of risk - there is no chance of the return of trust and integrity upon which long-term recovery depends."

Princeton economist and former Secretary of Labor Robert Reich agrees that Wall Street's biggest problem right now is the collapse of trust:

The problem is, government bailouts, subsidies, and insurance aren't really helping Wall Street. The Street's fundamental problem isn't lack of capital. It's lack of trust. And without trust, Wall Street might as well fold up its fancy tents.

And as prominent economist Nouriel Roubini writes:

"It is obvious that the current financial crisis is becoming more severe in spite of the Treasury rescue plan (or maybe because of it as this [bailout] plan is totally flawed."

In other words, the financial crisis is worsening because the government is offering proposals based on obvious lies, which will not actually fix anything. Paulson and Bernanke and company are lying - just like the scam artists on Wall Street were lying . . . it's just more of the same.

The crisis will deepen unless real productive manufacturing and service jobs return as the foundation of our economy, honest and transparent accounting is used, and the government stops gaming the system for the benefit of the wealthiest 1%.

As John Carney writes:

"We're probably making things worse. Allowing insolvent institutions to fail and requiring worthless and worth less assets to be fully written down would provide transparency to the market. Instead, we're dedicated to the post-Lehman proposition of "Never Again." The various programs of our government continue to obscure asset pricing and conceal insolvency. This means that you can't trust the market to tell you which firms are failing.
Twisting the arms of bankers to lend to institutions that may be insolvent is a recipe for deepening the crisis. We've just been through a period of malinvestment--we spent too much borrowed money on junk. Borrowing more to spend on junk only digs us in deeper.

Bank lending won't get going again until trust in the markets can be restored. Fighting a Great Depression era problem probably won't help. More transparency, which means more write-downs and failures, is probably necessary if we're going to get through this. Unfortunately, we're still sailing in the opposite direction."

Silver Lining of the Economic Crash . . . A Window of Opportunity To Plant Seeds of Truth

The economic crash - as horrible as it is - has a silver lining.

It is a window of opportunity wake Americans up from their comfortable slumber and make them question their government.

Stalin said that dictatorships only last so long as the dictators keep their people well-fed. Americans have been strongly motivated not to question the government because they have been led to believe that if they just follow the party line, they'll get nice jobs, make a bundle of dough, buy into "the American dream". A crash has the possibility to awaken Americans from their long nap. It has the potential to get Americans to open their eyes and start questioning the lies they have been told by our government and their media lapdogs about virtually everything. Indeed, polls show that the economic crisis has increased Americans' distrust in government.

The old systems, institutions and habits are collapsing. This is a window of opportunity to reach people with truth.

On the other hand, there is a tendency for people to become scared, to be driven lower on the Maslow pyramid to the point that they have no energy to think about truth or justice or liberty.
Indeed, this is exactly what the elites hope.

Will truth or a resigned survival-based disinterest prevail? It is not yet clear.

But one thing is for sure . . . the game has changed, and there is a huge window of opportunity to spread truth while people's habitual ways of thinking have been knocked for a loop.

America Wins Major Battle Against the Financial Elite

America has won a major battle against the financial elite.

The house has rejected the bailout scam. The will of the people - as expressed through thousands and thousands of angry phone calls and faxes to Congress - prevailed.

But the financial elite will regroup and try another attack on the people and the free market . . .

Big Money and their Congress critters will try again, and use dirty tricks and try to pass it when no one is looking.

So we must redouble our efforts to make sure we win the war, as well as just one battle.

Call and thank those who voted no, and tell congress that anyone who voted yes or who votes yes in the future will be kicked out of office, tarred and feathered. And demand that they address the real financial issues, like Iraq (it is bankrupting America, we have to get out), derivatives (by far the largest financial crisis), etc.

Find congress members' contact info here.

People Who Opposed The Bailout are NOT To Blame for the Stock Market Crash

Some people have blamed those who oppose the bailout for the crash in the stock market. Are they right?

Well, first of all, the overwhelming majority of Americans rejected the bailout. So if you start trashing those who opposed the bailout, your dissing America.

Second, most experts who have looked at the bailout say it won't work, and will actually make the economic crisis worse.

Third, the bailout doesn't address the fundamental issues which need to be addressed to actually stabilize the U.S. economy, such as the trillions of dollars being spent in Iraq and the phony war on terror, the national debt, derivatives, lack of savings, the loss of our manufacturing base, the fact that the wealthiest people have collected all of the poker chips so that regular people can't keep playing, and gaming of the markets by the super-rich and the government.

And last but not least, investors who are dumping stocks because a quick "fix" wasn't approved don't understand what is going on. hey don't understand the real, fundamental problems with the economy. For example:

They don't get that America is broke due to spending trillions in Iraq and trillions more in the phony war on terror, and the bailout would only make matters worse.

They don't understand that unless the derivatives bomb is diffused, it will take out the world's economy when it explodes, bailout or no.

They haven't learned that speculation is not real economic growth, and that until America restores its productive economy, it will remain a house of cards in a storm

Are those who oppose the bailout responsible for the stock market crash?

No . . . those who got us into Iraq and the war on terror based on lies, who have run up the national debt into the stratosphere, those who hawked derivatives as a safe bet (including Alan Greenspan), those who have encouraged borrowing instead of saving, those who argued it was good for America to ship our manufacturing jobs overseas, those who have been so greedy that they've taken all the chips, and those who have been gaming the markets are responsible.

Sunday, September 28, 2008

Republican and Democratic Congress Members Sound the Alarm: Tyranny is Here

Democratic and Republican congress members are sounding the alarm: tyranny is here.

For example:

Rep. Michael Burgess (R-TX) says:

“I have been thrown out of more meetings in this capital in the last 24 hours than I ever thought possible, as a duly elected representative of 825,000 citizens of north Texas.”

Burgess asks the Speaker of the House to post the bailout bill on the internet for at least 24 hours instead of passing the largest piece of legislation in US financial history in the “dark of night.”

Rep. Burgess’ says, “Mr. Speaker I understand we are under martial law as declared by the speaker last night.” (Note: For an explanation of what he meant by martial law, see this)

Congresswoman Kaptur (D-OH) says:

“My message to the American people don’t let Congress seal this deal. High financial crimes have been committed.

The normal legislative process has been shelved. Only a few insiders are doing the dealing, sounds like insider trading to me. These criminals have so much political power than can shut down the normal legislative process of the highest law making body of this land.”
We are Constitutionally sworn to protect and defend this Republic against all enemies foreign and domestic. And my friends there are enemies.”
The people pushing this deal are the very ones who are responsible for the implosion on Wall Street. They were fraudulent then and they are fraudulent now.”

Of course, there are many other indications that tyranny has already come to Amerca, including the permanent stationing of U.S. troops inside the country to quell "civil unrest" and the probable suspension of normal constitutional government for a state of emergency "continuity of government" operation.

This is not entirely new. In 2006, the Center for Budget and Policy Priorities wrote:

"House leadership invokes 'martial law,' forcing members to vote on key bills without full knowledge of what they are voting on: move represents erosion of the democratic process"

Indeed, many people, including high-level politicians, have been warning of tyranny in the U.S. for some time. As three of many examples:

Former prominent republican congressman Bob Barr stated that the U.S. is close to becoming a totalitarian society and that the Bush administration is using fear to try to ensure that this happens

Current U.S. Congressman Ron Paul stated, the government "is determined to have martial law", and that the government is hoping to get the people "fearful enough that they will accept the man on the white horse"

And Former Supreme Court justice Sandra Day O'Connor warned of dictatorship

Saturday, September 27, 2008

Who is Putting "Intense Pressure" on Bush and Congress to Pass the Bailout?

An article in CNBC states, "The U.S. Congress and the Bush administration were under intense pressure on Saturday to negotiate a $700 billion rescue".

Who is putting intense pressure on both the White House and Congress to pass the bailout?

Not the American people, who overwhelmingly oppose the bailout.

Not American economists, former treasury secretaries, chairmen of the FDIC, or the Congressional Budget Office, who all say that the bailout won't work, and will actually harm the economy.

So who is putting the intense pressure on our government?

Maybe its just America's financial elite.

But consider that many financial analysts say that the real reason that the government bailed out Freddie and Fannie is because China demanded it. And there were rumors last week that China instructed its banks to stop lending to U.S. banks. The U.S. owes trillions of dollars to China which, along with Japan, Saudi Arabia, and other creditor nations, is keeping America afloat. If they pulled the plug, the U.S. would instantly default on its obligations. See this.

They say that economics and finance are now global. Perhaps corruption, blackmail and tyranny are also.

Friday, September 26, 2008

Are the Big Banks Faking a "Liquidity Crisis"?

I previously pointed out that when the Japanese government threw cash at their big banks in the 90's, the banks just horded the money instead of using it to restore "liquidity".

Well, a professor of economics and an expert in liquidity now hints that the entire liquidity "crisis" might be a hoax.

Bloomberg quotes the good professor:

"I suspect that part of what we're seeing in the freezing up of lending markets is strategic behavior on the part of big financial players who stand to benefit from the bailout,'' said David K. Levine, an economist at Washington University in St. Louis, who studies liquidity constraints and game theory.

Are the big banks faking a liquidity crisis because they know that if they act like the financial system is drying up, they'll get a big bailout?

Like a kid who pretends he's sick so he can play hookie from school, are the big players pretending they are financially "sick" so that they can play hookie from the free market?

Support the Wall Street-Funded Rescue Plan

Forget Republican versus Democratic. That's a false dichotomy. Its the Democrats in Congress who are now trying to pass the fat cat welfare, taxpayer-funded bailout. Forget labels. Forget politics. Forget who should get credit for good ideas. Let's look at substance and do what's best for the country.

House Republicans are pushing a meaningful alternative to the Paulson bailout plan.

CNBC has the story:

In a letter to House Speaker Nancy Pelosi, House Minority Leader John Boehner urged that the proposals be "given the consideration they deserve."
The proposals include:
Wall Street – Not Taxpayers – Should Fund the Recovery
Private Capital – Not Tax Dollars – Should Be Injected Into Financial Markets
Immediate Transparency, Oversight, and Market Reform
Click Here to Read Boehner's Letter and Republican Proposal

This is a chance to stop the taxpayer bailout and to make the scam artists who created the economic mess clean it up.

So call Congress and demand that they support:

(1) Wall Street - not taxpayer - funding of the recovery

(2) Private - not public - capital injected into the markets

(3) Immediate transparency, oversight and market reform, and

(4) Insist that they clean up the derivatives mess, also.

(Find contact info at Congress.org).

Thursday, September 25, 2008

The Dallas Federal Reserve Bank President, Former Treasury Secretary, Head of the Congressional Budget Office and Leading Economists All Slam Bailout

The following experts have slammed the bailout:

The Dallas Federal Reserve Bank President (Richard Fisher) said the proposed bailout would plunge the U.S. government deeper into a fiscal abyss

The former Secretary of the Treasury (Paul O'Neill) questions the bailout

The director of the nonpartisan Congressional Budget Office (Peter R. Orszag) said the bailout could deepen the crisis

The former Chairman of the FDIC (William Isaac) doubts the bailout will work in its current form

The former head of the Fed's open market operation - the key Federal Reserve program which loans hundreds of billions of dollars to Wall Street companies and banks - said the bailout could make matters worse: "Every time you tinker with this delicate system even small changes can create big ripples . . . . The risks are that the government's $700 billion purchase of assets disturbs markets even more.''

Hundreds of leading economists, including numerous nobel prize winners, question the bailout

Former White House economist (Steve Hanke) adamantly opposes the bailout

Nobel prize economist and former chief economist of the World Bank (Joseph Stiglitz) opposes the bailout

A prominent economist (Nouriel Roubini) says "The Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown."

A highly-regarded economist (Michael Hudson) says that the bailout is a giveaway that will cause hyperinflation and dollar collapse

Many other leading economists question the bailout

Prestigious Group of 192 Economists - Including Nobel Prize Winners - Slams Bailout

The following group of prominent economists, including numerous Nobel Prize winners, has written a letter slamming the bailout proposal:

Acemoglu Daron (Massachusetts Institute of Technology)

Adler Michael (Columbia University)

Admati Anat R. (Stanford University)

Alexis Marcus (Northwestern University)

Alvarez Fernando (University of Chicago)

Andersen Torben (Northwestern University)

Baliga Sandeep (Northwestern University)

Banerjee Abhijit V. (Massachusetts Institute of Technology)

Barankay Iwan (University of Pennsylvania)

Barry Brian (University of Chicago)

Bartkus James R. (Xavier University of Louisiana)

Becker Charles M. (Duke University)

Becker Robert A. (Indiana University)

Beim David (Columbia University)

Berk Jonathan (Stanford University)

Bisin Alberto (New York University)

Bittlingmayer George (University of Kansas)

Boldrin Michele (Washington University)

Brooks Taggert J. (University of Wisconsin)

Brynjolfsson Erik (Massachusetts Institute of Technology)

Buera Francisco J. (UCLA)

Camp Mary Elizabeth (Indiana University)

Carmel Jonathan (University of Michigan)

Carroll Christopher (Johns Hopkins University)

Cassar Gavin (University of Pennsylvania)

Chaney Thomas (University of Chicago)

Chari Varadarajan V. (University of Minnesota)

Chauvin Keith W. (University of Kansas)

Chintagunta Pradeep K. (University of Chicago)

Christiano Lawrence J. (Northwestern University)

Cochrane John (University of Chicago)

Coleman John (Duke University)

Constantinides George M. (University of Chicago)

Crain Robert (UC Berkeley)

Culp Christopher (University of Chicago)

Da Zhi (University of Notre Dame)

Davis Morris (University of Wisconsin)

De Marzo Peter (Stanford University)

Dubé Jean-Pierre H. (University of Chicago)

Edlin Aaron (UC Berkeley)

Eichenbaum Martin (Northwestern University)

Ely Jeffrey (Northwestern University)

Eraslan Hülya K. K.(Johns Hopkins University)

Faulhaber Gerald (University of Pennsylvania)

Feldmann Sven (University of Melbourne)

Fernandez-Villaverde Jesus (University of Pennsylvania)

Fohlin Caroline (Johns Hopkins University)

Fox Jeremy T. (University of Chicago)

Frank Murray Z.(University of Minnesota)

Frenzen Jonathan (University of Chicago)

Fuchs William (University of Chicago)

Fudenberg Drew (Harvard University)

Gabaix Xavier (New York University)

Gao Paul (Notre Dame University)

Garicano Luis (University of Chicago)

Gerakos Joseph J. (University of Chicago)

Gibbs Michael (University of Chicago)

Glomm Gerhard (Indiana University)

Goettler Ron (University of Chicago)

Goldin Claudia (Harvard University)

Gordon Robert J. (Northwestern University)

Greenstone Michael (Massachusetts Institute of Technology)

Guadalupe Maria (Columbia University)

Guerrieri Veronica (University of Chicago)

Hagerty Kathleen (Northwestern University)

Hamada Robert S. (University of Chicago)

Hansen Lars (University of Chicago)

Harris Milton (University of Chicago)

Hart Oliver (Harvard University)

Hazlett Thomas W. (George Mason University)

Heaton John (University of Chicago)

Heckman James (University of Chicago - Nobel Laureate)

Henderson David R. (Hoover Institution)

Henisz, Witold (University of Pennsylvania)

Hertzberg Andrew (Columbia University)

Hite Gailen (Columbia University)

Hitsch Günter J. (University of Chicago)

Hodrick Robert J. (Columbia University)

Hopenhayn Hugo (UCLA)

Hurst Erik (University of Chicago)

Imrohoroglu Ayse (University of Southern California)

Isakson Hans (University of Northern Iowa)

Israel Ronen (London Business School)

Jaffee Dwight M. (UC Berkeley)

Jagannathan Ravi (Northwestern University)

Jenter Dirk (Stanford University)

Jones Charles M. (Columbia Business School)

Kaboski Joseph P. (Ohio State University)

Kahn Matthew (UCLA)

Kaplan Ethan (Stockholm University)

Karolyi, Andrew (Ohio State University)

Kashyap Anil (University of Chicago)

Keim Donald B (University of Pennsylvania)

Ketkar Suhas L (Vanderbilt University)

Kiesling Lynne (Northwestern University)

Klenow Pete (Stanford University)

Koch Paul (University of Kansas)

Kocherlakota Narayana (University of Minnesota)

Koijen Ralph S.J. (University of Chicago)

Kondo Jiro (Northwestern University)

Korteweg Arthur (Stanford University)

Kortum Samuel (University of Chicago)

Krueger Dirk (University of Pennsylvania)

Ledesma Patricia (Northwestern University)

Lee Lung-fei (Ohio State University)

Leeper Eric M. (Indiana University)

Leuz Christian (University of Chicago)

Levine David I.(UC Berkeley)

Levine David K.(Washington University)

Levy David M. (George Mason University)

Linnainmaa Juhani (University of Chicago)

Lott John R. Jr. (University of Maryland)

Lucas Robert (University of Chicago - Nobel Laureate)

Luttmer Erzo G.J. (University of Minnesota)

Manski Charles F. (Northwestern University)

Martin Ian (Stanford University)

Mayer Christopher (Columbia University)

Mazzeo Michael (Northwestern University)

McDonald Robert (Northwestern University)

Meadow Scott F. (University of Chicago)

Mehra Rajnish (UC Santa Barbara)

Mian Atif (University of Chicago)

Middlebrook Art (University of Chicago)

Miguel Edward (UC Berkeley)

Miravete Eugenio J. (University of Texas at Austin)

Miron Jeffrey (Harvard University)

Moretti Enrico (UC Berkeley)

Moriguchi Chiaki (Northwestern University)

Moro Andrea (Vanderbilt University)

Morse Adair (University of Chicago)

Mortensen Dale T. (Northwestern University)

Mortimer Julie Holland (Harvard University)

Muralidharan Karthik (UC San Diego)

Nanda Dhananjay (University of Miami)

Nevo Aviv (Northwestern University)

Ohanian Lee (UCLA)

Pagliari Joseph (University of Chicago)

Papanikolaou Dimitris (Northwestern University)

Parker Jonathan (Northwestern University)

Paul Evans (Ohio State University)

Pejovich Svetozar (Texas A&M University)

Peltzman Sam (University of Chicago)

Perri Fabrizio (University of Minnesota)

Phelan Christopher (University of Minnesota)

Piazzesi Monika (Stanford University)

Piskorski Tomasz (Columbia University)

Rampini Adriano (Duke University)

Reagan Patricia (Ohio State University)

Reich Michael (UC Berkeley)

Reuben Ernesto (Northwestern University)

Roberts Michael (University of Pennsylvania)

Robinson David (Duke University)

Rogers Michele (Northwestern University)

Rotella Elyce (Indiana University)

Ruud Paul (Vassar College)

Safford Sean (University of Chicago)

Sandbu Martin E. (University of Pennsylvania)

Sapienza Paola (Northwestern University)

Savor Pavel (University of Pennsylvania)

Scharfstein David (Harvard University)

Seim Katja (University of Pennsylvania)

Seru Amit (University of Chicago)

Shang-Jin Wei (Columbia University)

Shimer Robert (University of Chicago)

Shore Stephen H. (Johns Hopkins University)

Siegel Ron (Northwestern University)

Smith David C. (University of Virginia)

Smith Vernon L.(Chapman University- Nobel Laureate)

Sorensen Morten (Columbia University)

Spiegel Matthew (Yale University)

Stevenson Betsey (University of Pennsylvania)

Stokey Nancy (University of Chicago)

Strahan Philip (Boston College)

Strebulaev Ilya (Stanford University)

Sufi Amir (University of Chicago)

Tabarrok Alex (George Mason University)

Taylor Alan M. (UC Davis)

Thompson Tim (Northwestern University)

Tschoegl Adrian E. (University of Pennsylvania)

Uhlig Harald (University of Chicago)

Ulrich, Maxim (Columbia University)

Van Buskirk Andrew (University of Chicago)

Veronesi Pietro (University of Chicago)

Vissing-Jorgensen Annette (Northwestern University)

Wacziarg Romain (UCLA)

Weill Pierre-Olivier (UCLA)

Williamson Samuel H. (Miami University)

Witte Mark (Northwestern University)

Wolfers Justin (University of Pennsylvania)

Woutersen Tiemen (Johns Hopkins University)

Zingales Luigi (University of Chicago)

Zitzewitz Eric (Dartmouth College)

Here's the letter.

They are not alone. See this, this, this, this, this, this, this, this and this.

Wednesday, September 24, 2008

Treasury Pulled the Number Out of Thin Air

You know the $700 billion price tag of the proposed bailout? Treasury pulled that number out of thin air.

As Forbes writes:

In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

McCain Tries to Blackmail America

McCain is making the following threat: "Vote for the bailout or I'll pull out of the election".

Specifically:

Sen. Lindsey Graham, McCain's representative in debate negotiations, said McCain will not attend the debate "unless there is an agreement that would provide a solution" to the financial crisis. Graham, R-S.C., told The Associated Press that the agreement would have to be publicly endorsed by Obama, McCain, the White House and congressional leaders, but not necessarily given final passage by the House and Senate.

McCain is trying to blackmail America: Pass the bailout, or the elections won't happen.

Has the Election Just Been Cancelled?

CNN is reporting that McCain has "suspended his campaign" and is asking Obama to do the same, due to the economic crisis:

Republican presidential candidate Sen. John McCain announced Wednesday that he is suspending his campaign to return to Washington and focus on the "historic" crisis facing the U.S. economy.

Is this the first step in canceling the elections due to "national emergency"?

Is that part of the reason that the U.S. military is permanently being deployed within the U.S. to deal with "civil unrest" and "crowd control"?

Many of us have been warning about this possibility for years.

Hopefully, McCain's suspension of his campaign is just political posturing, and he will return to the campaign next week. Hopefully, this is not the first step in canceling the election.

I am For the Free Market . . . But if the Government is Going to Stick its Big Nose Into the Market, Here's What It Should Do

I am opposed to the bailout plan because it is socialism. It would deal a mortal blow to the free market and to the rule of law, as Paulson's actions are unreviewable by courts. And Paulson's plan is immoral, because its the fat cats hosing the taxpayer again.

Moreover, it simply won't work.

Why not?

Because the real crisis is the unwinding $62 trillion dollar market in credit default swaps. (See this, this, this, this and this).

A hundred billion here or a hundred billion there - while huge sums - are dwarfed by the potential of a crashing credit default swap market, which could very well take out not only the U.S. economy, but the economies of most of the world's developed countries.

I think there is a powerful argument that we should let the markets sort it out for themselves.

However, if governments are going to do anything, they should cancel all credit default swap contracts. The governments of the world should all declare that default swaps are null and void. See this.

The basis for canceling them? Fraud, for one.

People selling credit default swaps got fat and made billions of dollars selling something that no one understood, that no one was overseeing, and that is threatening to bring down the world economy. Indeed, a young, brand new graduate who knew nothing about the real world invented credit default swaps and talked her bosses at JP Morgan into selling them.

And yet they were sold as a relatively safe investment, even though the companies which sold them didn't have the assets to pay out on them. That's fraud.

Warren Buffet calls derivatives "weapons of mass destruction", and they should be treated as such.

Remember that banks and financial houses have hidden their derivatives exposure off the balance sheets. And almost no one understands derivatives:

"Not only [world's richest man] Warren Buffett, but Bond King Bill Gross, our Fed Chairman Ben Bernanke, the Treasury Secretary Henry Paulson and the rest of America's leaders can't 'figure out'" the derivatives market.

Indeed, the government actively helped to hide the derivatives mess since at least 2006. For example, according to Business Week:

"President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations."

Again, I am for the free market and for the rule of law. But if the U.S. government is going to stick its enormous nose into the free market, the Paulson bailout plan is not what will help. The one thing the government could do is cancel credit default swaps and persuade allied governments to do the same.

While it is solely Wall Street which would be helped by Paulson's bailout, something that addresses the derivatives mess might help the little guy, too. Remember that Orange County, California, went bankrupt in 1994 because it had invested in bad derivatives. Indeed, I heard that a small fishing village in Norway might have to file for bankruptcy because it had bought derivatives as part of its portfolio. And the pension and retirement accounts of millions of teachers and other middle class people probably contain a lot of derivatives also.

Tuesday, September 23, 2008

Wall Street and the Sheriff

In the 1974 comedy Blazing Saddles, Cleavon Little plays the new sheriff in an old Western town. The sheriff is African-American, and when he rides into town for the first time, the townspeople pull out their guns and are about to shoot him.

But he quickly puts a gun to his own head, pretends he's scared of his own gun, and says "BACK OFF OR THE AFRICAN-AMERICAN GUY GETS IT!!!" The townspeople are dumb and fall for it, suddenly terrified that he'll kill himself. Here's the scene.

That's what Wall Street is doing with the bailout.

The fat cats on Wall Street are saying "give us a lot of money, and buy all of our bad debt for a lot more than its worth, or Wall Street will get it and we'll go into a depression!"

Are Americans stupid enough to fall for it?

Note: While the scene contains racism, this analogy really has nothing to do with race. If it was a white sheriff, I still would have written about it, because its the principal of threatening one's self to manipulate other people which I'm referring to, not any racial issues. In any event, it was the sheriff - not the townspeople - who was the smart one.

Army to Be Deployed INSIDE U.S. as Part of Northcom

An article in the Army Times reveals that the 3rd Infantry Division’s 1st Brigade Combat Team will be redeployed from Iraq to domestic operations within the United States.

The unit will soon be under the day-to-day control of US Army North, the Army service component of Northern Command. The Army Times reports this new mission marks the first time an active unit has been given a dedicated assignment to Northern Command. The paper says the Army unit may be called upon to help with "civil unrest" and "crowd control".

The soldiers are learning to use so-called "nonlethal weapons" designed to subdue unruly or dangerous individuals and crowds.

This violates posse comitatus and the Constitution. But, hey, we're in a "national emergency", so who cares, right?

Bernanke Admits Bailout is NOT Aimed at Helping Taxpayers

Apologists for the bailout plan say that it will have a trickle-down benefit for taxpayers.

But in his testimony to the Senate today, Bernanke pretty much admitted that the bailout isn't aimed at helping taxpayers.

Specifically, as the Wall Street Journal summarizes it:

Bernanke used his time to argue for not buying assets at fire-sale prices in the Treasury's $700 billion bailout proposal.
***
Mr. Bernanke said the Treasury plan should have taxpayers buy the assets and hold them at close to their maturity value. Removing the assets, he said, would bring liquidity back to markets, unfreeze credit markets, reduce uncertainty and allow banks to attract private capital. (Reuters has a partial transcript)

Forcing assets down to even lower fire-sale prices would protect taxpayers the most, since the government would own the assets below the value if held to maturity. As long as those securities didn’t flat-out default, the government’s purchase would have a substantial upside. However, Mr. Bernanke essentially argued that doing so would hurt markets even further and wouldn’t solve the problem facing the economy. In pushing back against congressional efforts to change the Treasury proposal, Mr. Bernanke said: “We cannot impose punitive measures on institutions that choose to sell assets.” The beneficiaries would be not just the companies selling, but markets and the overall economy, he said.

Still, he acknowledged that the precise approach to doing so hadn’t been determined, arguing for flexibility. “We do not know exactly what the best design is,” and that would come from consultation with experts, Mr. Bernanke said.

“We believe that strong and timely action is urgently needed to stabilize our markets and our economy,” he said.

In subsequent questioning, Mr. Bernanke distinguished between, on the one hand, “fire sale prices,” the ones that prevail “when you sell into an illiquid market” and, on the other, the prices that holders think the assets are really worth, sometimes described as “fundamental” values or “hold-to-maturity” value.

“The holders have a view of what they think it’s worth. It’s hard for outsiders to know,” Mr. Bernanke said. The point of an auction is to reveal those prices.

So Bernanke is arguing against the government purchasing Wall Street's toxic assets at their real price (which would benefit taxpayers) and for the Wall Street firms themselves to set whatever arbitrary price they like, since they "have a view of what they think it's worth" and "it's hard for outsiders to know".

Further proof of the fact that the bailout is not aimed at helping taxpayers is that even very wealthy, solvent Wall Street (and foreign) firms may get bailout money. See this.

White House Admits It Drew Up Bailout Months Ago

No one could have seen this coming, right?

Well, actually, the White House has admitted that they drew up the bail out plan months ago:

[White House Deputy Press Secretary Tony] Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.

But the government did nothing real to prevent the financial meltdown. Instead, it let the meltdown happen, and now is trying to ram through terrible and counter-productive legislation drafted previously by using fear tactics.

Does this sound familiar? It should.

Monday, September 22, 2008

The Shock Doctrine and the Economy

As we all know, the powers-that-be have used the "Shock Doctrine" to pass anti-American, fascist legislation while the public was in a state of shock.

This applies to economic shocks, as well as physical attacks like 9/11.

Indeed, right now, Paulson and Bernanke are using the shock doctrine to try to ram through legislation that would help out the fat cats at the expense of taxpayers, and give the government control over the free market.

But there is some resistance. For example, Senator Leahy and the New York Times are questioning Paulson's use of shock and awe:

Senator Leahy said "If we learned anything from 9/11, the biggest mistake is to pass anything they ask for just because it's an emergency"

The New York Times wrote:
"The rescue is being sold as a must-have emergency measure by an administration with a controversial record when it comes to asking Congress for special authority in time of duress."
***
Mr. Paulson has argued that the powers he seeks are necessary to chase away the wolf howling at the door: a potentially swift shredding of the American financial system. That would be catastrophic for everyone, he argues, not only banks, but also ordinary Americans who depend on their finances to buy homes and cars, and to pay for college.
Some are suspicious of Mr. Paulson’s characterizations, finding in his warnings and demands for extraordinary powers a parallel with the way the Bush administration gained authority for the war in Iraq. Then, the White House suggested that mushroom clouds could accompany Congress’s failure to act. This time, it is financial Armageddon supposedly on the doorstep.
“This is scare tactics to try to do something that’s in the private but not the public interest,” said Allan Meltzer, a former economic adviser to President Reagan, and an expert on monetary policy at the Carnegie Mellon Tepper School of Business. “It’s terrible.”

Is there any chance that the lure of the shock doctrine might be wearing off? Or is this just political posturing?

As Naomi Klein writes:

The only hope of preventing another dose of shock politics is loud, organized grassroots pressure on all political parties: they have to know right now that after seven years of Bush, Americans are becoming shock resistant.

America Versus the Financial Elite

The people don't want it (see this poll showing that only 28% support the bailout; and see this).

Most economists don't want it (see this, this, this, this and this).

Many congress people don't want it (see here and here).

So who wants the bailout?

The only people who want it are the big money boys, the ultra elite, including the Wall Street fat cats and Fed who got us into this mess, and their counterparts abroad who would also be bailed out (see this and this).

It is literally America versus the financial elite.

Under Proposed Bailout, Feds Could Speculate, Nationalize Any Company or Industry, Or Do Anything Else They Want Using Taxpayer Money

The Fact Sheet from the U.S. Treasury states:

The purchases are intended to be residential and commercial mortgage-related assets, which may include mortgage-backed securities and whole loans. The Secretary will have the discretion, in consultation with the Chairman of the Federal Reserve, to purchase other assets, as deemed necessary to effectively stabilize financial markets.

So Paulson, in consultation with Bernanke, could "deem it necessary" to "stabilize" the financial markets by buying boat loads of gold. Or by cornering the market in uranium or platinum.

Or they could decide that they needed to buy Microsoft and Google.

Just like Bush and Cheney have gotten us into oil wars and wars to protect Israel under the guise of being necessary to protect our national defense, Paulson and Bernanke could do anything they want by pretending it is for the stability of the financial markets, especially since no one could challenge their actions in court.

The Bailout Is NOT Limited to $700 Billion; Paulson Could Spend UNLIMITED Taxpayer Money

Most people think that the proposed bailout will cost $700 billion. In fact, it is not limited to $700 big ones, and will probably go much higher.

Specifically, Paulson's draft bailout plans says:

"The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time."

That means that Paulson could buy a couple hundred billion worth of assets one day, sell them, and then the next day buy another couple hundred billion, and so on.

The maximum price tag?

There is no maximum. Paulson could literally spend unlimited taxpayer monies. And remember that Paulson has already broadened the proposal to include the purchase of non mortgage-related assets (and see this).

As Chris Martenson writes:

This means that $700 billion is NOT the cost of this dangerous legislation, it is only the amount that can be outstanding at any one time. After, say, $100 billion of bad mortgages are disposed of, another $100 billion can be bought. In short, these four little words assure that there is NO LIMIT to the potential size of this bailout. This means that $700 billion is a rolling amount, not a ceiling.

So what happens when you have vague language and an unlimited budget? Fraud and self-dealing. Mark my words, this is the largest looting operation ever in the history of the US, and it’s all spelled out right in this delightfully brief document that is about to be rammed through a scared Congress and made into law.

Indeed, as written, the feds are only limited to $700 billion at a time in mortgage-related assets. But since they can also buy non-mortgage related assets, the $700 billion language may not even apply to other assets.

Update 1: See the final version of the bailout proposal on page 40.

Update 2: A Bloomberg analyst says that the bailout could balloon to $5 trillion dollars.

Update 3: And remember that "in the months before the March 2003 Iraq invasion, the Bush administration estimated the Iraq war would cost no more than $50 billion", but it will end up costing at least $3 trillion dollars.

Sunday, September 21, 2008

$700 Billion Bailout Could Fund Private Foreign Banks

Not only are the fed bailouts giving billions to foreign central banks, but the new $700 billion bailout proposal could bail out private foreign banks as well.

Specifically, a Fact Sheet from the U.S. Treasury says:

Participating financial institutions must have significant operations in the U.S., unless the Secretary makes a determination, in consultation with the Chairman of the Federal Reserve, that broader eligibility is necessary to effectively stabilize financial markets.

An article from today in Politico explains

"In a change from the original proposal sent to Capitol Hill, foreign-based banks with big U.S. operations could qualify for the Treasury Department’s mortgage bailout, according to the fine print of an administration statement Saturday night."

Why Bailouts Won't Keep the System From Freezing Up

An interview in Bloomberg shows why the bailouts won't work:

As details of Treasury Secretary Henry Paulson's plan to revive the U.S. financial system by pumping as much as $700 billion into the markets emerged Sept. 19, bond investor Michael Cheah was reminded of Japan.

When that country's real estate bubble burst, leaving a trail of bad real estate loans, officials flooded the economy with cash only to see banks hoard the money instead of lending it out. The result has been a series of recessions and persistent deflation for more than a decade.

"Although the government tried to debase the yen by printing a lot of government bonds, the economy went into a standstill,'' said Cheah, an official at the Monetary Authority of Singapore from 1991 to 1999 who manages $2 billion at AIG SunAmerica Asset Management in Jersey City, New Jersey. "The banks used the money to buy safety. I see a repeat happening here. The banks will use it to buy Treasuries.''

We already know that Wall Street firms have used fed cash to speculate or to buy failing competitors. As the economic crash gets worse, they may just park it in treasuries to try to save their own hides.

Either way, they probably won't use it to keep the system from freezing up and "liquid" or to extend credit to consumers or businesses.

Given that The Neocons are Fascists, Is The Bailout A Form of "Financial Fascism"?

Many commentators have called the Paulson bailout socialism for the wealthy. For example, former senior advisor to the U.S. Treasury and highly-regarded economics professor, Nouriel Roubini, says that Washington’s bail outs are “socialism for the rich, the well connected and Wall Street; it is . . . a corrupt system where profits are privatized and losses are socialized.”

But as leading journalist Robert Scheer notes, this is more like fascism than socialism:

What is proposed is not the nationalization of private corporations but rather a corporate takeover of government. The marriage of highly concentrated corporate power with an authoritarian state that services the politico-economic elite at the expense of the people is more accurately referred to as "financial fascism" [than socialism]. After all, even Hitler never nationalized the Mercedes-Benz company but rather entered into a very profitable partnership with the current car company's corporate ancestor, which made out quite well until Hitler's bubble burst.

Indeed, historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because "the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social" (page 416). This perfectly mirrors Roubini's statement about the current bailout plan.

Remember that one of the best definitions of fascism is the "merger of state and corporate power". And remember that a significant agenda of fascists is to ensure loyalty from their nation's corporations.

As an article on Wikipedia states:

In general, apart from the nationalizations of some industries, fascist economies were based on private property and private initiative, but these were contingent upon service to the state.

***
Fascist governments encouraged the pursuit of private profit and offered many benefits to large businesses, but they demanded in return that all economic activity should serve the "national interest".

Sound familiar?

Saturday, September 20, 2008

U.S. Taxpayers Are Paying to Bail Out FOREIGN Speculators

We all know that the Fed is trying to stick the American taxpayers with trillions of dollars in debt (direct or through inflation) to bail out the Wall Street robber barons.

But did you know that they are also trying to get you to bail out foreign gamblers?

An article in the Telegraph states:

"The Fed has also just offered another $125bn of liquidity to banks outside the US that are desperate for dollars and can't access America's frozen credit markets"

"Another" $125 billion? How much has the Fed already given to foreign banks?

Why are American taxpayers who are already drowning in debt due to U.S. gamblers also being asked to also bail out foreign speculators?

This isn't a pro-America anti-everyone-else post. If I lived in England, or Canada or Japan, I would resent being asked to bail out America, too.

The Market is Now Pricing In the Genuine Possibility that the US will Default on Its Debt

You've heard of "credit default swaps". They are a type of derivative where one person places a bet that a certain company will go out of business, and another person on the other side of the contract places a bet that the company won't go out of business (see this and this).

Well, people are now starting to increase their use of credit default swaps to bet that the U.S. will default on its ability to pay on its treasury debt.

An article in the Telegraph from today includes a here showing credit default swaps on US 10 year treasury debt, and explains:

"Check out the chart showing the recent spikes in the US 10-year credit default swap. In other words, the market is now pricing-in the genuine possibility that the US will struggle to pay-back some of its long-term T-bills.
That possibility is still deemed to be quite low. But the ultimate financial question - until recently, unthinkable - is now being asked. Yes siree, the mighty US government could default. That's how much the world has changed."

We Have DAYS To Stop the $700 Billion Stick-Up (and Fascist Power Grab)

Congress hopes to pass the $700 Billion bailout bill by Friday, according to an article in Bloomberg.

In case you haven't heard, the bill would not only stick up American taxpayers for an additional $700 billion, but would literally give Paulson and the government fascist powers.

Don't believe me?

Well, as the Bloomberg article notes: "The bill would bar courts from reviewing actions taken under its authority."

Bloomberg includes the following quotes by people who understand the significance of the bill:

It sounds like Paulson is asking to be a financial dictator, for a limited period of time,'' said historian John Steele Gordon . . . .
***
The Bush administration seeks "dictatorial power unreviewable by the third branch of government, the courts, to try to resolve the crisis,'' said Frank Razzano, a former assistant chief trial attorney at the Securities and Exchange Commission now at Pepper Hamilton LLP in Washington. ``We are taking a huge leap of faith.''

This power grab is so serious that investigative reporter Larisa Alexandrovna calls it "the final stages of the coup".

We have days to stop this bill. March on Congress. Educate and motivate everyone around you. Do everything you can to prevent this disaster before it is too late.

Friday, September 19, 2008

The Fed's Weekend at Bernie's

In the movie "Weekend at Bernie's", a couple of young executives try to create the illusion that their murdered boss is alive in order to avoid being questioned about it. They move his arms and legs and pretend he's moving in order to keep the charade going (watch the trailer).

Bernanke, Paulson, the White House and bozos in Congress like Frank and Dodd are pulling a Weekend at Bernie's with the economy. The U.S. economy is dead. America is broke. The derivatives house of cards is falling down. The credit orgy has left the banks hungover and without any money. The American people have tapped out their credit cards and are starting to live on fumes.

But the boys are borrowing trillions more to move the arms of the U.S. economy, to pick up one foot at a time to pretend that it is still moving and breathing.

It is comical. As soon as they pick up the right arm, another part of the body economic slumps . . . . and in picking up that up, the right arm falls again.

The feds brokered the Bear-JP Morgan deal, but then Indymac collapsed. They took over Freddie and Fannie, but then Lehman died. They propped up AIG, but then the money markets collapsed . . .

Pretty soon, the government will have to start playing both sides in conversations. You know, one government-operated company will "do business" with another government-operated company, so that it looks like there is commerce happening.

Let Me Provide A List Of Entities Responsible For The Financial Mess We Find Ourselves In

Here's a great email (slightly edited) from CS to Mike Shedlock:

"I am almost shaking as I write this for what is happening to the capital markets, this country, and the free world. The impact of the past two weeks' action in the financial markets, if not reversed by cooler heads, will have irreparably changed the world in a way that only terrorist attacks and acts of war have in the past.

Nationalizing Fannie Mae and Freddie Mac, providing an emergency quasi-legal bridge loan to AIG, temporarily banning short-selling on all stocks in the US, and instituting an RTC-type entity to handle the toxic waste of the financial system is economic violence on a grand scale.

The long-term cost of these actions to dollar holders will likely be in excess of $1 trillion. The basic premise of a free economy is one governed by laws and not men, where property rights are respected, where individuals are free to make contracts with each other, and where honesty and transparency exist in the marketplace. It's questionable whether any of these currently exist in the economy of the United States.

[L] et me provide a partial list of entities responsible for the financial mess we find ourselves in:
Fractional-reserve banking, which is inherently unstable and entirely a confidence game
Congress for passing the Federal Reserve Act and creating the Federal Reserve, the third central bank in the history of the US
Woodrow Wilson for using the Fed to finance World War 1
Benjamin Strong, the President of the Federal Reserve Bank of New York from 1914-1928, for inflating the money supply in the '20s to help out Great Britain which led to the Great Depression
Herbert Hoover for his economic intervention from 1929-1932. He was not laissez-faire by any means.
John Maynard Keynes for laying the foundation of a miseducated public
FDR for banning private ownership of gold, enacting the New Deal, creating Social Security and Fannie Mae, and exacerbating the Great Depression
The FDIC for lulling the American public into a false sense of security regarding their bank deposits and training the public to unquestionably trust the financial system
LBJ for the guns and butter of the '60s
Nixon for severing all ties between the US dollar and gold
Reagan's intellectual duplicity, using free market, small government rhetoric while turning the US into a chronic debtor nation
Alan Greenspan, one of the most duplicitous, arrogant, and incompetent individuals in the history of the United States. If I had to pin this crisis on any one man, it would be he.
George W. Bush for cutting taxes while raising spending and his full embrace of Cheney's doctrine of "deficits don't matter"
Ben Bernanke for following the Greenspan doctrine to its inevitable conclusion
The heads of Fannie Mae and Freddie Mac for using artificially low borrowing costs to create systemically-dangerous housing institutions
Christopher Dodd and Barney Frank for beating the socialist drum
Christopher Cox for thinking a ban on short-selling will solve anything
Hank Paulson for folding the hand he was dealt
The ratings agencies for rubber stamping garbage assets as AAA
The heads of the major banks and brokerages on Wall Street for turning a blind eye as their institutions were taking on massive leverage that threatens to take down the financial system
The hedge funds that levered up structured finance to dangerous levels
Generations of lawmakers for kicking the looming financial crisis can down the road
Home buyers who lied about their income and creditworthiness
Predatory lenders who put people into mortgages they could never afford

Its worth reading the rest of Mish's article.

Thursday, September 18, 2008

Rice Admits Georgia Started War with Russia

A BBC article from today confirmed what many people have been saying:

Speaking at an event organised by the German Marshall Fund in Washington, Ms Rice acknowledged that Georgia had fired the first shots in the breakaway region of South Ossetia.
"The Georgian government launched a major military operation into Tskhinvali [the capital of South Ossetia] and other areas of that separatist region," she said.
"Regrettably, several Russian peacekeepers were killed in the fighting," she added.

Wednesday, September 17, 2008

America Is Too Big To Fail Broke

America is spending so much money it doesn't have that even the mainstream press is starting to question the dogma that the U.S. is too big to fail. For example:

CBS News asks "Who'll Bail Out Uncle Sam?"

Forbes asks "Is The U.S. Broke? Now that the federal government has bailed out Fannie and Freddie, who's going to bail out the federal government?"

The New York Post writes in a front-page story:
"The next issue for concern in the battered economy is whether there are going to be buyers for the nation's billions in debt, Mayor Bloomberg said yesterday. . . . "Who's buying our debt? It's these overseas funds, these sovereign-wealth funds, these overseas hedge funds. They are in trouble now. So it's not clear who is going to be buying" US Treasury bills, he said."

Reuters is covering the story of a leading Chinese state-run newspaper saying that - threatened by a "financial tsunami" -the world must consider building a financial order no longer dependent on the United States

Bloomberg quotes a portfolio manager saying "It brings up the more troubling question of whether the U.S. government is big enough to take on this whole problem, relative [to the size of the American economy]".

And in July - long before the bailout of AIG and the hundreds of billions in additional comittments by the government- the San Francisco Chronicle wrote:
"As the Bush administration proposes backstopping mortgage giants Fannie Mae and Freddie Mac with a $300 billion line of credit and Congress contemplates another economic stimulus, the question is who will bail out the government?
'People seem to think the government has money,' said former U.S. Comptroller General David Walker. 'The government doesn't have any money.'

A rare consensus has developed across the political spectrum that the government's own fiscal affairs are precarious, with an astonishing $53 trillion in long-term liabilities, according to the Government Accountability Office."

Of course, those in the know have been saying this for some time. For example, the author of the Forbes article said the same thing years ago to the Saint Louis Federal Reserve, but the media ignored it. And Treasury and the Office of Management and Budget published a report in 2006 stating that the U.S. cannot grow our way out of the government's liabilities, that the liabilities are quickly growing, and that failing to take drastic and immediate action would lead to very bad consequences. Of course, Congress, the White House the Fed and everyone else did the exact opposite of what was recommended.

Why the Poker Game is Ending

In his book "Secrets of the Temple: How the Federal Reserve Runs the Country", leading journalist William Greider said that the economy is like a poker game. He said that it is human nature to want to get all of the chips, but noted that - if one person does get all of the chips - the game ends.

In other words, the game of capitalism only continues as long as everyone has some money to play with. If the government and corporations take everyone's money, the game ends.

The fed and Treasury are not giving more chips to those who need them: the American consumer. Instead, they are giving chips to the 800-pound gorillas at the poker table, such as Wall Street investment banks. Indeed, a good chunk of the money used by surviving mammoth players to buy the failing behemoths actually comes from the Fed.

No wonder billionaire George Soros says that the way US Treasury Secretary Henry Paulson was handling the situation was "very reminiscent of the way the central bankers talked in the 1930s", the time of the Great Depression.

And no wonder Nobel-prize winning economist Joseph Stiglitz stresses putting poker chips back in the hands of the little guy (for example, by strengthening unemployment insurance).

This is not a question of big government versus small government, or republican versus democrat. It is not even a question of Keynes versus Friedman (two influential, competing economic thinkers).

It is a question of focusing any government funding which is made to the majority of poker players - instead of the titans of finance - so that the game can continue. If the hundreds of billions or trillions spent on bailouts had instead been given to ease the burden of consumers, we would have already recovered from the financial crisis.

Monday, September 15, 2008

Why AIG is in Trouble . . .and Why its Failure Would Be a Big Deal

Why is AIG in trouble and why are people saying its failure would be a big deal?

You know the answer . . . derivatives.

Specifically, a February 2008 article in the International Herald Tribune states:

[AIG revealed that] auditors had questioned whether it properly valued its derivatives portfolio, raising new questions about accounting practices at one of the world's largest insurance companies.
***
The disclosure sent AIG shares down 11.33 percent and cast doubt on the company's previous contention that it did not face major problems stemming from the credit crisis that has slammed other financial institutions.

***

We "believe AIG management will have an extremely difficult time regaining investor confidence," Standard & Poor's wrote Monday in a note.
[AIG's auditor] concluded that AIG had a material weakness in its internal controls over financial reporting relating to the fair valuation of credit default swap portfolio obligations of AIG Financial Products.
S&P cut its price target on AIG shares by 38 percent to $43 and downgraded the shares to "sell" from "buy." It said the company's problems with valuing the derivatives portfolio were "very troubling" and that the lower price target - a discount to AIG's peers - was "warranted in light of these disclosures."

What's happening with AIG now? And what would its failure mean? A money manger explains in a New York Times op-ed:

Late Monday, A.I.G. was downgraded by the major credit rating agencies . . . . This credit downgrade could require A.I.G. to post billions of dollars of additional collateral for its mortgage derivative contracts.
Fat chance. That’s collateral A.I.G. does not have. There is therefore a substantial possibility that A.I.G. will be unable to meet its obligations and be forced into liquidation. A side effect: Its collapse would be as close to an extinction-level event as the financial markets have seen since the Great Depression.
A.I.G. does business with virtually every financial institution in the world. Most important, it is a central player in the unregulated . . . credit default swap market that is reported to be at least $60 trillion in size.
***
If A.I.G. collapsed, its hundreds of billions of dollars of mortgage-related assets would be added to those being sold by other financial institutions. This would just depress values further. The counterparties around the world to A.I.G.’s credit default swaps may be unable to collect on their trades. As a large hedge-fund investor, A.I.G. would suddenly become a large redeemer from hedge funds, forcing fund managers to sell positions and probably driving down prices in the world’s financial markets. More failures, particularly of hedge funds, could follow.

Note: this explanation is admittedly somewhat of an oversimplification. However, it does accurately reflect the centrality of derivatives to the economic crisis.

Jim Wilkinson and the Plunge Protection Team

Remember the Bush-Cheney supporters who pretended to spontaneously protest the Miami-Dade 2000 election recount, but were really high-level Republican aides and staffers?

Well, Jim Wilkinson was there:

"Jim Wilkinson, a spokesman for the Bush recount team who was present at the protest outside the Miami-Dade canvassing room, says that there was nothing orchestrated about the protest. 'There were between 80 and 100 of us' outside the room, Wilkinson said, 'and it was a very emotional group of young people. But they thought the election was being held behind closed doors.' Hence they all walked outside the canvassing room and protested -- emotionally, but spontaneously, Wilkinson said."

The same Wilkinson "helped to manage the program of embedding reporters in combat units" during the Iraq War, and has been a part of numerous other Bush administration propaganda and dirty tricks efforts. He's so bad that a reporter from Texas said Wilkinson "used techniques first perfected by Stalin".

Would you give someone like Wilkinson the keys to your car? Would you give him the keys to the economy?

Well, it turns out that Wilkinson is one of the key players of the Working Group on Financial Markets (better known as the "Plunge Protection Team" or PPT).

As the Telegraph notes, the PPT has broad powers:

It appears to have powers to support the markets in a crisis with a host of instruments, mostly by through buying futures contracts on the stock indexes (DOW, S&P 500, NASDAQ and Russell) and key credit levers. And it has the means to fry "short" traders in the hottest of oils.

Indeed, Treasury Secretary Paulson, the head of the PPT, appointed Wilkinson as his chief of staff and:

"Ordered Jim Wilkinson ... to 'oversee the creation of a Treasury Command Center to track markets world-wide and serve as an operations base in a crisis'! (Wall Street Journal)"

Given that shady characters like Wilkinson are part of the PPT, I agree with journalist Danny Schetcher when he calls for a probe of the PPT by Congress and the press and writes:

In actual fact, this secret branch of government has a sophisticated war room using every state of the art technology to monitor markets worldwide. It has emergency powers. It doesn't keep minutes. There is no freedom of information access to its deliberations.

***

We need to know who was lobbying "the team" and in whose interests they act.

***
Is their goal to get taxpayers to pay off corporate failures or centralize power as former Treasury Department official Catherine Austin Fitts believes?:
"If your goal is total centralized control, this is a great way to achieve it," she argues. "Between Freddie, Fannie, Ginnie Mae, FHA, VA and the Federal Home Loan Bank Board, the federal government no longer regulates or provides credit to the residential mortgage market -- it is the market."
Before the economy goes down the toilet, as some analysts who are predicting a depression now fear, before that final flush, we need to find out how to protect ourselves from the plunge protectors.

Sunday, September 14, 2008

Why The Fed Allowed Derivatives Trading on a Sunday

In an unprecedented move, the Fed and the International Swaps and Derivatives Association allowed derivatives trading today, on a Sunday, to "reduce risk associated with a potential Lehman . . . bankruptcy."

Lehman holds $ 800 billion in derivatives.

As the very even-keeled and level-headed chief executive of Pimco, the world's biggest bond fund, said:

"This is an extremely, and I stress extremely, rare event. It also speaks to the more general notion that, in today's highly disrupted financial markets, the unthinkable is thinkable."

What is the "unthinkable" he's referring to?

Another great depression. Perhaps even a world-wide depression.

To see why derivatives are the key to the financial crisis in the U.S. and the world, and why the Fed allowed derivatives trading today, read this.

Update: Bloomberg today writes:

"Bond-default risk soared worldwide as the collapse of Lehman Brother Holdings Inc. sparked concern than the $62 trillion credit-derivatives market will unravel."

Saturday, September 13, 2008

The FBI's Mail-Sorting Theory Doesn't Add Up

The FBI claims that mail-sorting equipment crushed the killer anthrax in the letters to Senators Daschle and Leahy down to a fine powder.

Is that possible?

Well, the anthrax spores in the Daschle letter were 1.5 to 3 microns, according to the Washington Post (and see this).

There are 25,400 microns in an inch.

Mail-sorting equipment is generally built to handle letters at least 1/4 inch thick. Correspondingly, U.S. Postal Service guidelines allow letters to be up to 1/4 of an inch thick.

The following U.S. Postal Service chart shows the standard size and thickness of letters that can be handled by mail-sorting machines:

**Letter-Size Mailpiece Dimensions**
Dimension	Minimum	Maximum
Height	3-1/2 inches	6-1/8 inches
Length	5 inches	11-1/2 inches
Thickness	0.007 inch	1/4 inch

Here is one of the U.S. Postal Service's mail sorting machines which actually processed an anthrax letter in 2001 (although not the one which processed the Leahy and Daschle letters):

What does this all mean?

1/4 of an inch equals 6,350 microns. So the FBI is trying to say that a mail-sorting machine which is designed to process letters 6,350 microns thick crushed something down to 3 microns . . . 2,116 to 4,232 times smaller than the type of envelope sorting machines are designed to handle (the smaller number is compared to 3 micron thick anthrax powder and the larger is compared to 1.5 micron powder) .

I don't know about you, but my mail isn't crushed into oblivion when I get it.

On the other hand, the LA Times hints at a more likely explanation:

"Since the early 1990s, U.S. Army scientists at Dugway Proving Ground in Utah have made small quantities of weapons-grade anthrax that is virtually identical to the powdery spores used in the bioterrorist attacks that have killed five people, government sources say."

"Dugway’s production of weapons-grade anthrax, which has never before been publicly revealed, is apparently the first by the U.S. government since President Nixon ordered the U.S. offensive biowarfare program closed in 1969. Scientists familiar with the anthrax program at Dugway described it to the Baltimore Sun on the condition that they not be named."

"Dugway’s weapons-grade anthrax has been milled to achieve a concentration similar to that sent in a letter to Senate Majority Leader Tom Daschle, according to a source. The strain found in those letters is indistinguishable from that used most often by Dugway."

Friday, September 12, 2008

Congressman and Scientist: FBI Theory that Mail-Sorting Machines Crushed Anthrax to a Fine Powder "Patently Ridiculous"... Anthrax was Weaponized

The anthrax in the letters to Leahy and Daschle was ground into an extremely fine powder. As USA Today noted:

The finely prepared Daschle-letter spores ... were ground so fine that they apparently drifted across offices and contaminated other letters in the mail.

As the Washington Post noted, the anthrax was:

1.5 to 3 microns in size and processed to a grade of 1 trillion spores per gram -- 50 times finer than anything produced by the now-defunct U.S. bioweapons program and 10 times finer than the finest known grade of Soviet anthrax spores.

In addition, the anthrax sent to Daschle and Leahy was so advanced that no one at Fort Detrick had ever seen anything like it before. As described in a 2001 CBS article:

"When technicians at the Army biodefense lab in Fort Detrick, Md., tried to examine a sample from the Daschle letter under a microscope, it floated off the glass slide and was lost. "

(Grinding the anthrax into a fine powder makes it disperse more widely, and ensures that it will get straight into victim's lungs, so as to be lethal).

So how does the FBI explain how a lone vaccine scientist, Bruce Ivins, could have produced something that most of the top anthrax bioweapons experts with their own labs couldn't produce?

An accident.

Specifically, the official FBI explanation for how the anthrax was milled so finely is that:

"Post Office sorting machines crushed the dried anthrax in mailing envelopes, making them very powdery."

Uh-huh.

Maryland Congressman and PhD physiologist Roscoe Bartlett hit the nail on the head:

The FBI's theory that the anthrax was crushed to a fine powder by U.S. Postal Service mail-sorting machines is "patently ridiculous."

He says he's convinced the anthrax was deliberately "weaponized," and that Ivins lacked the equipment to make it.

What Time Is It?

The thickest Democrat hopes that Obama will "restore" America, and "undo" the damage caused by the Bush administration.

People who think a little deeper say the Bush administration has rolled us back to the days of Nixon and Hoover and Cointelpro and stagflation.

Students of history think of Nazi Germany.

People studying the economy say we are teetering on the brink of a crash not seen since the great depression.

So what time is it?

Well, many people believe that the illegal acts and usurpations by the Bush administration are even worse than those of King George before the American Revolution.

And because fundamentalism is sweeping not only America, but much of the world, maybe we're going to undo the Enlightenment and go back to the Middle Ages.

Do you think I'm exaggerating?

Maybe.

But a highly-regarded economist (Michael Hudson, Distinguished Research Professor at the University of Missouri, Kansas City, who has advised the U.S., Canadian, Mexican and Latvian governments as well as the United Nations Institute for Training and Research, and who is a former Wall Street economist at Chase Manhattan Bank who also helped establish the world’s first sovereign debt fund) said:

"You have to realize that what they’re trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions. They’re not trying to make the economy more equal, and they’re not trying to share power. Their greed is (as Aristotle noted) infinite. So what you find to be a violation of traditional values is a re-assertion of pre-industrial, feudal values. The economy is being set back on the road to debt peonage. The Road to Serfdom is not government sponsorship of economic progress and rising living standards, it’s the dismantling of government, the dissolution of regulatory agencies, to create a new feudal-type elite."

Are we willing to let them take us back to the Dark Ages? Or are we going to fight to keep the hands of the clock in the present?

Thursday, September 11, 2008

US Politicians Admit Georgia Started the Conflict with Russia

Some U.S. politicians are now beginning to admit that Georgia started the conflict with Russia.

For example, the U.S. ambassador to Russia said a couple of weeks ago that Russia's initial military response was legitimate after Russian troops came under attack by Georgian forces.

And a few days ago, Congressman Dana Rohrbacher, a California Republican, said:

"The Russians are right! We're wrong! Georgia started it, the Russians ended it"

Even Dan Fried, a senior US state department official who has consistently stated that Russia started the conflict, is now backpedaling:

The Georgians "believed at the time - at least they said at the time - that they thought the Russian forces were coming through the Roki tunnel (which links Russia with South Ossetia) and they were in imminent danger."
He added: "I'm unable to tell you now whether or not this was true."

Indeed, Georgia's own former defense minister has revealed that the Georgian president planned the invasion of South Ossetia a long time ago.

"Unusual Magnetic Forces" Should Not Have Caused the Twin Towers to Collapse

First it was the "new phenomenon" of "thermal expansion".

Now, Sergei Dudarev, of the UK Atomic Energy Agency, says the Twin Towers collapsed due to "unusual magnetic forces".

Specifically, as described by the BBC, Mr. Dudarev argues that:

"The peak in this pliability is at 911.5C, but begins at much lower temperatures, at around 500C (932F) - a temperature often reached during building fires.
The steel backbone of the Twin Towers was probably exposed to temperatures close to this, when insulating panels - meant to protect the buildings' structural frame - were dislodged by the impacts of the hijacked planes.
The roaring fire mid-way up the building heated the steel struts, and once temperatures rose above 500C the structure became elastic, and collapsed under the force of the floors above."

Is he right?

Well, as noted in Appendix A of The World Trade Center Building Performance Study:

In the mid-1990s British Steel and the Building Research Establishment performed a series of six experiments at Cardington to investigate the behavior of steel-framed buildings. These experiments were conducted in a simulated, eight-story building. Secondary steel beams were not protected. Despite the temperature of the steel beams reaching 800-900 C (1,500-1,700 F) in three of the tests (well above the traditionally assumed critical temperature of 600 C (1,100 F), no collapse was observed in any of the six experiments.

And Underwriters Laboratories tested the steel components at the Twin Towers and found they could withstand fires for hours without failure:

"NIST contracted with Underwriters Laboratories, Inc. to conduct tests to obtain information on the fire endurance of trusses like those in the WTC towers…. All four test specimens sustained the maximum design load for approximately 2 hours without collapsing… The Investigation Team was cautious about using these results directly in the formulation of collapse hypotheses. In addition to the scaling issues raised by the test results, the fires in the towers on September 11, and the resulting exposure of the floor systems, were substantially different from the conditions in the test furnaces. Nonetheless, the [empirical test] results established that this type of assembly was capable of sustaining a large gravity load, without collapsing, for a substantial period of time relative to the duration of the fires in any given location on September 11." (NIST, 2005, p. 140).

Other fire tests have also failed to cause failures, collapses or "unusual magnetic forces" at high temperatures.

What about actual office fires?

The 2005 Madrid skyscraper fire "reached 800 degrees Celsius (1,472 F), said Javier Sanz, head of Madrid firefighter" (see pictures here), and lasted some 20 hours. Indeed, the fires in the Twin Towers were much cooler than many office fires, as indicated by the color of the flames and the black smoke pouring out of the windows.

As Steve Watson notes:

We have previously pointed to the innumerable number of buildings that have suffered roaring fires across the majority of their floors for hours and remained standing. Seemingly the steel beams in these buildings were not subjected to the same “unusual magnetic forces”.

Furthermore, a far more extensive fire occurred in WTC 1 itself, prior to enhanced fireproofing of the building, on February 13, 1975. The fire burned at much higher temperatures for three hours and spread over six floors, including 65% of the 11th floor and the building core, yet it caused no significant damage to the steel structure and no trusses had to be replaced. There were no “unusual magnetic forces” present on that day.
***

Furthermore, referring to the collapses, the original NIST report concluded that 'the existing condition of the fireproofing prior to aircraft impact and the fireproofing thickness on the WTC floor system did not play a significant role'”.

Any "thermal expansion" at the World Trade Center was not a new phenomenon, but something that building designers and fire safety engineers have taken into account for decades if not hundreds of years.

Likewise, any "magnetic forces" at the WTC should have been less severe than those present in fire safety tests and actual office building fires, which have never before led to complete collapses. Indeed, despite the apparently advanced science which Mr. Dudarev hints at, he actually admits this is nothing new:

"He said blacksmiths had exploited this property for hundreds of years".

Do I Have to Obey Orders From an Unconstitutional Government?

I am a loyal citizen of the United States of America, and I believe deeply in the vision of the Founding Fathers, the rule of law as enshrined in the Constitution, and the liberty that our forefathers fought and died for.

I have therefore felt a duty to obey the laws of the U.S. my whole life.

However, it is likely that the U.S. no longer has a constitutional form of government.

As the Washington Post noted in March 2002, Bush hid from Congress the fact that Continuity of Government (COG) plans were implemented on 9/11 and were still in effect many months later, and stated:

It was unclear yesterday whether any federal documents -- prepared either by the current White House or by Bush's predecessors dating to Dwight D. Eisenhower -- specify whether congressional leaders should be told if the plan is put into effect. At least one relatively general document, a 1988 executive order entitled "Assignment of Emergency Preparedness Responsibilities," said the White House's National Security Council "shall arrange for Executive branch liaison with, and assistance to, the Congress and the federal judiciary on national security-emergency preparedness matters."

The executive order, signed by President Ronald Reagan, is a precursor to documents outlining the contingency plans in greater detail, which have not been made public. Regardless of whether Bush had an obligation to notify legislative leaders, the congressional leaders' ignorance of the plan he set in motion could raise the question of how this shadow administration would establish its legitimacy with Congress in the event it needed to step in for a crippled White House.

At least some members of Congress suggested yesterday that the administration should have conferred about its plans, which were first reported in The Washington Post yesterday.

"There are two other branches of government that are central to the functioning of our democracy," said Rep. William Delahunt (D-Mass.), a member of the House Judiciary Committee. "I would hope the speaker and the minority leader would at least pose the question, 'What about us?' "

So What?

Remember that, in the summer 2007, Congressman Peter DeFazio, on the Homeland Security Committee (and so with proper security access to be briefed on COG issues), inquired about continuity of government plans, and was refused access. Indeed, DeFazio told Congress that the entire Homeland Security Committee of the U.S. Congress has been denied access to the plans by the White House (video; or here is the transcript). The Homeland Security Committee has full clearance to view all information about COG plans. DeFazio concluded: "Maybe the people who think there’s a conspiracy out there are right”.

And University of California Berkeley Professor Emeritus Peter Dale Scott has warned:

"If members of the Homeland Security Committee cannot enforce their right to read secret plans of the Executive Branch, then the systems of checks and balances established by the U.S. Constitution would seem to be failing.

To put it another way, if the White House is successful in frustrating DeFazio, then Continuity of Government planning has arguably already superseded the Constitution as a higher authority."

Indeed, White House spokesman Gordon Johndroe said that "because of the attacks of Sept. 11, 2001, the American public needs no explanation of [Continuity of Government] plans".

What Does This All Mean?

Continuity of government documents probably require that Congress be notified of the details of implementation of COG plans. But since the executive is hiding such documents from Congress and the people, so we can't be sure.

Regardless, the executive has failed to "establish its legitimacy with Congress" or the American people, because it is hiding the documents which created the COG emergency government and which give it emergency powers and specify its obligations.

In other words, even if the COG documents were harmless and say "we will coordinate with Congress and the courts and follow the Constitution", the fact that the White House is hiding the documents, refusing to disclose what acts it has taken pursuant to extraordinary authority granted by the COG plans, and refusing even to say whether a COG government is still in effect renders the current government unconstitutional and illegal.

I consider myself a law-abiding citizen, and I cherish the Constitution, the rule of law, and the American form government established by the Founding Fathers.

But do I have any duty to obey the orders of a government that cannot even establish its basic legitimacy? A government which is itself violating the Constitution and the rule of law? A government that is trying to dismantle the vision that the Founding Fathers and everything that our forefathers fought and died for?

Do I have to obey illegal orders from an unconstitutional government?

This essay doesn't even discuss spying on Americans, failure to comply with Congressional subpoenas, signing statements, torture, wars based on false intelligence, or the numerous other unconstitutional acts by this administration. It solely focuses on the unconstitutionality of the COG plans.

And it doesn't even get into guessing what the Founding Fathers might have thought about this bunch of tyrants.

Wednesday, September 10, 2008

Dear Reporter: Looking for a Story about 9/11?

If you're looking for a story for the 7th anniversary of 9/11, you can interview one of the following people:

A 9/11 Commissioner

A Congress member

A military leader

An intelligence professional

A scientist

A structural engineer or architect

A legal scholar

A victim's family members or heroic first responder

A psychiatrist or psychologist

Or one of the thousands of other highly-credible people who question 9/11

But you just want to cover nonsensical stories of McCain and Obama threatening to "get" Osama Bin Laden and fight the "war on terror" more effectively, don't you?

Oh well, that's why your company is losing viewers and readers ... people want real news!

Tuesday, September 9, 2008

World’s Top Anthrax Experts Say The Killer Anthrax was Weaponized

Some of the top anthrax experts in the world say that the killer anthrax was weaponized:

William C. Patrick III, top U.S. bioweapons expert, who holds numerous patents on the weaponization of anthrax, and former chief of the Product Development Division of the Agent Development and Engineering Directorate for the Army's Biological Warfare laboratories at Fort Detrick and consultant to the C.I.A., stated of the anthrax in the Leahy and Daschle letters:
"It’s high-grade. It’s free flowing. It’s electrostatic free. And it’s in high concentration. It appears to have an additive that keeps the spores from clumping."

Dr. Byron Weeks, a former Air Force doctor and retired colonel who has studied infectious diseases and bio warfare for decades, stated:
"Yes, of course it was weaponized anthrax. There's no question."

Dr. John Ezzell, a top expert who has published some 60 articles on anthrax, tested the letter and concluded that, in his many years of researching anthrax, he had never seen anthrax spores so potent.Dr. Ezzell characterized the anthrax in the Daschle letter as being "weaponized."Indeed, the anthrax spores were so potent that, when Dr. Ezzell opened the Daschle letter to test it, some of its contents aerosolized instantly.

The Chief of Biological Planning and Operations at the UN Monitoring, Verification and Inspection Commission, Dr. Kay Mereish, reported that the letter anthrax had in fact been prepared with a charge, according to a 2006 lecture at a CBRN meeting by D. Small, who had worked with the anthrax

Dr. Richard Spertzel, a former biodefense scientist who worked with Ivins at the Fort Detrick lab, stated to CNN that there was "no way" a lyophilizer could have created the fine anthrax spores used in the attack letters. Spertzel stated:
"Apparently, the spores were coated with a polyglass which tightly bound hydrophilic silica to each particle. That's what was briefed (according to one of my former weapons inspectors at the United Nations Special Commission) by the FBI to the German Foreign Ministry at the time.
Another FBI leak indicated that each particle was given a weak electric charge, thereby causing the particles to repel each other at the molecular level. This made it easier for the spores to float in the air, and increased their retention in the lungs.

In short, the potential lethality of anthrax in this case far exceeds that of any powdered product found in the now extinct U.S. Biological Warfare Program. In meetings held on the cleanup of the anthrax spores in Washington, the product was described by an official at the Department of Homeland Security as 'according to the Russian recipes' -- apparently referring to the use of the weak electric charge.

***
The FBI spent between 12 and 18 months trying 'to reverse engineer' (make a replica of) the anthrax in the letters sent to Messrs. Daschle and Leahy without success, according to FBI news releases. So why should federal investigators or the news media or the American public believe that a lone scientist would be able to do so?”

Spertzel also wrote: "In my opinion, there are maybe four or five people in the whole country who might be able to make this stuff, and I'm one of them. And even with a good lab and staff to help run it, it might take me a year to come up with a product as good.”

Many other scientists say the same thing, including a leading expert on infectious diseases who notes that anthrax usually only causes skin infections, while the letters to Leahy and Daschle caused inhalation infections, due to the small particle size and special properties. He also noted the presence on high levels of silica (or "Si") in the killer anthrax, and who wrote:

"The FBI has failed to reproduce the Si levels, which would have been trivial had the Si appeared because of Si in the nutrients or water. The failure to replicate the levels, coupled with the frequency of inhalational cases in the DC mailings [as opposed to the less serious cutaneous infections], strongly support weaponization"

See also this statement by a PhD in physiology.

The Government as Wizard of Oz in Anthrax and 9/11 Investigations. . . "Don't Look at the Man Behind the Curtain"

As top independent anthrax experts, physicists, engineers and architects confirm, the government makes claims in the anthrax and 9/11 investigations but does not provide the details which would allow the claims to be independently tested by scientists not affiliated with the government. At the end of the day, the government is simply begging us - like the Wizard of Oz - not to look at the man behind the curtain.

Anthrax

The government admits that Dr. Bruce Ivins passed 2 lie detector tests, that hair samples and handwriting samples don't implicate him, and that there is no direct evidence linking him to the anthrax murders.

However, the government claims that a "new scientific method" links Ivins' flask of anthrax to the killer anthrax used in the letters (even though another lab had the same stuff, Ivins' flask was also stored in another room at Ft. Detrick, 200-300 hundred other people had access to the flask, and an unknown quantity of anthrax was removed from the flask).

But the government refuses to disclose the details of the "new scientific method". For example, they won't say which genetic markers are distinctive in Ivins' mixture of anthrax, or how the government ruled out the other lab known to have had the same strains.

And the government's response to evidence that scientists originally said that the killer anthrax was highly weaponized with a silica coating and an electric charge is that the silica was "naturally occurring" and no charge was found.

But the government refuses to disclose how much silica was found, how the government knows it was "naturally occurring" when it has previously been proven that artificial silica coatings can penetrate inside the anthrax spores, or how the government knows there was not originally an electric charge when electric charges quickly wear off, and when the type of processing used would likely change the properties of the anthrax.

In other words, the government's entire scientific case against Ivins is that genetic markers lead to Ivins' flask of anthrax and that silica found in the anthrax was naturally occuring, but they won't disclose what the genetic markers were and whether they could be explained by other causes, the nature of the silica and whether it could be explained by other causes, or the details of what scientists originally found when they examined the killer anthrax.

In summary, the government's entire scientific argument really boils down to 2 words: "trust us".

9/11

Similarly, the government admits that World Trade Center building 7 did not collapse due to damage from debris falling from the Twin Towers, or due to the diesel stored in the building. And the government admits that no other modern steel-framed building has ever collapsed due to fire alone.

In fact, the government's argument that WTC 7 collapsed due to fire is based entirely on computer models (along with the false claim that thermal expansion is somehow a "new phenomenon" unique to this particular building). However, the models don't match actual observation. Moreover, the government refuses to disclose the data underlying the models, the programming used in the models, or the actual results of the experimental runs made using the models (see Kevin Ryan's comments to NIST's report on WTC7).

Again, the government's scientific argument is really "just trust us".

Given the numerous documented lies by this government, including by its scientific agencies, should we just trust them? Top anthrax experts, scientists, engineers and architects say no: we should demand that the government release all of the details.

If Its Broken, Why Haven't They Fixed It?

(Updated in light of a new report showing that the government isn't taking real steps to make us safer and the recent harassment of reporters, children, grandmothers and others at the Minnesota convention).

Fort Knox is robbed in an unusual way. Burglars break in through an air conditioning vent and shine a laser at the video cameras to "blind" them. Billions are stolen.

The head of Fort Knox (let's call him the "Chief") announces that no one could have foreseen this type of burglary.

The commission investigating the robbery -- stacked with the Chief's business partners and friends -- finds that the break-in was unexpected. The commission makes numerous suggestions on how to thwart similar burglaries by installing motion detectors in the air conditioning vents and main vault.

Independent researchers, however, discover that there have been many previous break-ins at repositories of valuable items where the burglars crawled in through the air conditioning vents and shined lasers at video cameras.

They also discover that the Fort's security system would normally have caught the burglars in the act and alerted the military in time to stop the burglary, but the system was undergoing a series of "safety tests" that night -- including some that were similar to what actually occurred -- and so the military assumed that the alarms were part of the test.

There had been safety tests before, but never so many at the same time. The Chief personally scheduled multiple, overlapping tests for the night of the robbery, and then oversaw the operation of the tests and the Fort's reaction to those tests.

Years pass, but the Chief does not follow the commission's recommendations. He fails to install any motion detectors.

That's circumstantial evidence that the Chief was in on the heist. Why? Because if the robbery really had not been foreseeable and if he was innocent, he would have a very strong incentive to install motion detectors to prevent further robberies at the Fort. His personal reputation, the government's reputation, and its gold reserves would all depend on it. You can bet that he'd shore up the Fort's defenses.

Perks

Let's take it a step further: the Chief's personal bank account has suddenly gotten alot bigger after the heist. That helps to prove he was in on it, right? But it also shows that one of the reasons the Chief is leaving the Fort's defenses in a compromised state now is so that additional heists can occur, and he'll get more loot.

9/11

Similarly, the 9-11 Commission -- stacked with cronies of the Bush administration (like executive director Philip Zelikow (an administration insider whose area of expertise is the creation and maintenance of "public myths" thought to be true, even if not actually true, who controlled what the Commission did and did not analyze, then limited the scope of the Commission's inquiry so that the overwhelming majority of questions about 9/11 remained unasked - see this article and this article) found that the attacks were unexpected, despite very strong evidence that they were not, and despite the fact that the government scheduled numerous, overlapping war games for 9/11 -- some involving a plane flying into a building and others involving hijackings.

And even though Bin Laden allegedly masterminded 9/11, the CIA commander in charge of the capture that the U.S. let Bin Laden escape from Afghanistan. If one particular criminal had done the first crime and was known to want to do additional crimes, wouldn't failing to capture him when they had the chance indicate something wasn't right?

And U.S. and allied intelligence services had penetrated the very "highest levels" of Al Qaeda and knew the attacks were coming, and yet failed to stop them.

And while the 9-11 Commission made numerous recommendations on how to prevent future terrorist attacks -- many of them simple and inexpensive to implement -- the Bush administration has has failed to do so (and see this and this). Moreover, he and his allies are actively blocking efforts to do so.

Indeed, the Department of Homeland Security, instead of protecting vulnerable targets, has instead randomly made up lists which include kangaroo centers, petting zoos and ice cream parlors as high-priority terrorist threats. And the administration is refusing to fill important positions at DHS so that our security can be protected.

The government is also harassing reporters, children and other innocent American citizens instead of real terrorists (see this, this and this).

Just like with the Chief, the current administration's failure to make the recommended and preventative changes -- many of them cheap fixes -- despite billions being spent on supposed "homeland security", is strong evidence that the administration was in on it. Indeed, the Department of Homeland Security is now claiming that many more terrorist attacks are "inevitable". But they wouldn't be inevitable if the government had beefed up security and kept its eye on the ball, right? I mean, if you were told that it was "inevitable" that a bunch of robbers would come break into your bank (or your house), wouldn't you move heaven and earth to strengthen your ability to defend your home?

The administration has received so many perks from 9/11: justification for wars in Afghanistan (where a huge oil pipeline benefiting American companies was being held up by the Taliban) and Iraq (one of the world's largest oil producers), permanent military bases in the Middle East, and consolidation of power at home.

And by failing to implement the recommendations of the 9-11 Commission, the administration keeps open the possibility that another "terrorist" attack will occur which will whip the now-dissenting American public into line, justify the invasion of Iran, and allow for the suspension of our remaining constitutional rights.

The bottom line is that the administration's, like the Chief's, inaction to fix the alleged holes in security which allowed supposedly unforeseeable crimes to occur shows that they are guilty of the crimes, and hope to benefit from additional crimes in the future.

And if foreign terrorists really had carried out 9/11, why is the government using all of its resources spying on innocent people who obviously have never met a terrorist in their life? Indeed, even insider and war hawk Zbigniew Brzezinski and other leading experts are now admitting that the war on terror is a racket. Moreover, a top adviser to the U.S. military has confirmed that the war on terror is a hoax because there is no battlefield solution to terrorism. And the neocons themselves admit that the war on terror is a hoax.

Monday, September 8, 2008

Ivins' Colleague Says He Was Murdered

Dr. Ayaad Assaad, who worked in the U.S. Army Medical Research Institute of Infectious Disease lab at Fort Detrick from 1989 to 1997, was interviewed yesterday by the Frederick News Post (the local paper in the area of Fort Detrick).

Dr. Assaad said of Ivins:

"He's a great man. He's honorable, sincere, honest and most important, he didn't kill five people and he didn't kill himself".

If Ivins didn't kill himself, that can only mean that he was murdered.

Insights Into the Question of Whether the Anthrax was Weaponized

Remember how the FBI was instructed to blame the Anthrax attacks on Al Qaeda by White House officials in 2001?

Well, according to Washington Post reporter and Assistant Managing Editor for Investigations at The Washington Post Marilyn Thompson, the US government ordered Fort Detrick's USAMRIID bioweapons facility to "tone down" its description of the Daschle anthrax as "weaponized."

Moreover, scientists originally found that an electrical charge and high-tech silicon-coating were added to the killer anthrax to make it more lethal. As pointed out by anthrax expert Dr. Meryl Nass:

"If a charge were added to the spores, the charge would be expected to dissipate over days or weeks; thus the characteristics of the anthrax could have changed when inspected later. Furthermore, Dr. John Ezzell initially evaluated this anthrax in a high containment lab at USAMRIID. It was later processed before sharing with some other labs, to reduce its lethality. This processing likely changed other characteristics as well."

Therefore, there were not only political reasons for backing away from the finding of weaponization, but there may also have been physical reasons that the weaponization might have been less apparent to scientists who subsequently studied it.

See also this.

Demand that the FBI Reveal How Much of Ivins' Anthrax Sample was Taken by Other People

The FBI's August 18th briefing revealed that originally there were two flasks containing the RMR-1029 anthrax spore batch. The two RMR 1029 flasks held a total of "about a liter" of concentrated anthrax spores.

Specifically, an official stated at the briefing, "It is a total of over 164 liters of spore production, concentrated down to about a liter." Of course, "about a liter" could mean more than a liter.

However, by the time the FBI seized the RMR-1029 spore batch in April 2004, "it had been reduced into one flask -- [a] one-liter flask of several hundred milliliters." Specifically, FBI scientist Hassell said at the briefing:

"It was divided into two one-liter Erlenmeyer flasks, more or less equally. When we seized it, by that time it had been reduced into one flask -- one-liter flask of several hundred milliliters. So there’s not two flasks in evidence, there's just one.

Because there are 1,000 milliliters in a liter, "several hundred milliliters" could very well be less than "about a liter". Indeed, "several hundred milliliters" could very well be half a liter or less.

In an interview reported by NPR, Dr. Ivins' attorney, Paul Kemp, said that numerous people got samples from the RMR-1029 anthrax batch, but "nobody knows the quantities, how much, when they took it, what they did with what that they didn't use."

We must therefore demand that the FBI reveal how much of the original anthrax mixture in Ivins' flasks was missing by the time the FBI seized the flask.

Sunday, September 7, 2008

Empowerment Clubs

This essay does not argue for either religion or atheism. As I think you will see, I am trying to build a common bridge that will empower everyone to be more effective fighters for truth, liberty and justice.

Billions of people go to church, temple or mosque - driven by human desires to be uplifted and to find a sense of comraderie with other people. But in the process, they get exposed to messages such as:

Obey authority

Be meek

We know what is true, you're not qualified to figure it out for yourself

Our way is the only right way

All unbelievers are going to hell

God wants us to conquer others

(Obviously, some churches, temples, mosques, etc. are better than others, and preach better messages. I am not criticizing faith, belief, or any particular religion. I am simply addressing the power-hungry, authoritarian version of it which has swept most of the world in recent years.)

On the other side of the coin, huge numbers of atheists stay away from religious rituals, and so miss out on the celebration and upliftment which comes from getting together with a bunch of people, celebrating comraderie, singing uplifting songs and saying deeply-felt affirmations together. For those who get their comraderie from participating in a regular ball game or a “mother’s club”, I will show below that this does not meet the same deep emotional need*. Remember, the overwhelming majority of Americans go to some time of “religious” services, and so if you aren’t going to religious celebrations, you are missing out on something most other people participate in (I am not saying that the things being preached are true or accurate. I'm only talking about missing out on frequent interactions with other people in a celebratory, inspirational fashion. For many people, this type of communal gathering - similar to the small town gatherings of our ancestors - is very emotionally satisfying).

What's In It For Me?

I propose a type of regular meeting which welcomes both atheists and people of faith, concentrates on empowering and uplifting people, and leaves all of the baggage behind.

Impossible, you say?

Well, some groups are already doing something like this. (As just one of many possible examples, Unitarians provide the singing, uplifitng and comraderie part. They focus on uplifting values, without overtly preaching any religion. I interviewed a local Unitarian minister; he told me he was an atheist. However, they are a fairly touchy-feely left-wing group which is not very welcoming to traditional conservative values.)

How can a group provide comraderie, upliftment, be welcoming to conservatives and liberals, and not be divisive?

By providing uplifting activities, and by focusing on the power each individual has to choose his or her own destiny and to take heroic action.

What Value Is Shared By Both Conservatives and Liberals, People of Faith and Atheists?

Conservatives value individual liberty and the right of each person to make his or her own choices as a responsible adult, and then to face the consequences of that choice.

Liberals value the right to choose one's own lifestyle regardless of what traditional authorities say.

Both groups value the hero: the person who rises up and creates his own destiny and lives in the way that he wants.

People of faith value taking action based on deep values even when the world seems to be against them.

Atheists value independent thinking and logic in the face of false dogma.

Both groups value the hero.

Why Group Meetings?

The way humans are wired makes the type of comraderie, singing and affirmations which occur in small groups (roughly 10-200 people, pulling numbers out of my ear) effective in making people feel more empowered, to help focus and to get motivated.

The intention in participating in such meetings is to empower us to fight for truth, liberty and justice, and to give us a little inspiration while we're doing it. So sing empowering songs (they don't have to be churchy; they can be heavy metal or hip-hop if that's what pumps you up), read passages from inspiring biographies of people who made the world better in the face of overwhelming odds, tell empowering stories, and make empowering affirmations of our heroic natures and our ability to overcome powerful tyrants and oppressors.

The important thing is that it should be obvious at this point in human history that:

Each person has more power within themselves than they are currently using; and

We need to start using that power to fight for the liberty, justice, wealth, and health which the bad guys are trying to take away from us

For some people, the path of the hero is fueled by courage. For others, conviction, passion, faith or brains. Why not cater to (or at least not discriminate against) all of these different types, and focus on the one common goal of empowering each of us to be a hero and providing inspiration in a way that we don’t have to swallow authoritarian messages with the uplifting parts?

Let's use the power of small group meetings to fire up our efforts. Instead of being lone wolves who try to fight the good fight alone, let's harness our human and tribal tendencies hard-wired into us to empower our activism and are ability to fight the good fight.

And since there is something deeply satisfying to most people in this kind of uplifting group meeting, it will make us feel good at the same time.

* Regular ballgames with the guys or mother’s clubs with the gals provides some comraderie and inspiration. However, for most people, they do not meet the hard-wired human needs for comraderie, inspiration and empowerment to the same degree that meetings that specifically focus on those things give. For example, almost nothing inspires people as much as hearing true stories about people who have overcome tremendous adversity, and group affirmations are quite moving, and singing uplifting songs together brings good cheer to most people (as long as you like the music).

Note: This is not some new hierarchical pyramid scheme. No one's in charge, no one has to join, and you can do it any way you want.

And you don't necessary have to start building new buildings to house meetings. We can simply hold meetings in our houses, apartments, parks, forests, or wherever else we want. Just meet once a week or more, or whenever you want.

And if you can’t find 10 or more people, just get together with a friend or two. There’s nothing set in stone about it.

Use any rituals that empower and inspire the group; or none at all. Do what works for your group, and leave the rest. If you want, you can go to existing ceremonies to get ideas about what does or doesn’t empower and inspire people.

All I'm saying is that many people disempower themselves by selling themselves short. They assume - based on false assumptions - that they don't have what it takes to be a hero, to act with power, to have a positive impact on the world.

Empowerment clubs are a way to help make us all heroes.

Saturday, September 6, 2008

Predator and Prey

For millions of years, predator and prey have competed.

Some of the fastest periods of biological evolution have occurred when predator and prey were locked in an "arm's race", each side adapting as quickly as possible to gain the upper hand. When predator developed a fierce new weapon, the prey would develop a new defense. The predator would then develop a new attack strategy, etc.

Now, predator and prey are engaging in an arm's race among humans.

The social and political predators attempt to separate the prey from their money, their power, and their freedom.

The predators have used new weapons such as the psychological science of how to manipulate the masses using the arts of propaganda created by Freud's nephew, Edward Bernays.

They also developed methods of spying on all of the prey and processing the data using powerful databases like main core.

The prey, in turn, are quickly evolving. Many of them have used the Web to learn, and grow and organize, and use videocameras to confront and question the high and mighty.

Many of them have also found that each individual has the ability to see things as they are, without the dirty glasses previously imposed on them by their culture, religion, and family. And many have found that - to some extent - we creates our own experience with our choices, our free will, and our decisions.

However, the rules of the game are constantly changing at this time, as predator and prey constantly innovate new strategies.

Evolve or Die

In nature, the rule is - literally - evolve or die.

The same is true in human society. We must literally evolve, and innovate new ways and new tools.

The predators who are trying to take our money, our liberty, and our dignity are constantly trying to evolve new weapons against us.

We must evolve or we will die.

Clarifying the Collapse Time of WTC 7

Government apologists have argued that WTC 7 took 13 or more seconds to collapse, thus disproving the "virtual free fall" argument. However, this argument entirely misses the point.

Why?

Because the videos show that the penthouse collapsed long before the main building. In fact, everyone admits that there was a delay of several seconds between the collapse of the penthouse and the collapse of the rest of the building.

"An object at rest tends to stay at rest". So once the movement stopped, it should have stayed stopped.

Therefore, the collapse of the main portion of building 7 - several seconds after the collapse of the penthouse stopped - should be treated as a discrete and new event (see discussion below).

Since the main building collapsed in approximately 7 seconds - the same time as a controlled demolition takes - that is strong evidence that WTC 7 was in fact demolished.

The important comparison is the collapse time for the main portion of a building. In videos of controlled demolitions, demolition charges are often visible long before the building starts to collapse, but these should not be included in the collapse time. If there are things going on inside the building after the charges go off but before the main building visibly starts collapsing, then that should not be included in the timing calculations.

In other words, government apologists will argue that alot was going on inside WTC 7 between the end of the collapse of the penthouse and the beginning of the collapse of the main building. They have provided no evidence for that argument. Indeed, if there had been significant movement inside the building after the collapse of the penthouse, this should have resulted in some movement or deformation of the building visible from outside.

More importantly, alot might also be going on inside other buildings between the start of demolition charges and the start of the visible collapse of the main building. There is simply no way to know (there are usually not cameras inside buildings being demolished, and there were no cameras inside WTC7 to capture what was happening; so this cannot objectively be measured).

The comparison should be in the time that the main buildings take to collapse. This is an objective measurement (unlike guessing about what is going on inside of a building when no movement is observable from outside), and readily observable from video.

Note: For any previous instances of controlled demolition when a penthouse, antenna or other roof structure was demolished before the main building, then - for the sake of consistency - that must be excluded from the collapse time when comparisons are made to WTC 7.

Update: Mechanical engineer Tony Szamboti agrees with this analysis, and adds:

"The WTC 7 East penthouse had columns on its perimeter and none in its interior. On three sides these columns mounted near the edge of the roof of WTC 7. It is unlikely that a collapse of any core columns of the main building could have pulled them completely down without the roof beams breaking completely loose from the exterior columns and moving down completely also.

It is unlikely that the roof beams were severed from the exterior columns, which is what would be necessary for a core collapse to cause the penthouse to collapse."

New Evidence Shows Ivins Case Even Weaker Than Previously Thought

A New York Times article from today reveals that the case against Ivins is even weaker than previously disclosed.

Specifically, the Times stated that even after anthrax was genetically linked to Ivin's lab and he was questioned about late-night lab work, the FBI informed him he was not a suspect:

"In April 2007, after the mailed anthrax was genetically linked to Dr. Ivins’s laboratory and after he was questioned about late-night work in the laboratory before the letters were mailed, prosecutors sent Dr. Ivins a formal letter saying he was 'not a target' of the investigation."

If the FBI did not consider the genetic and after-hours work evidence persuasive then, why should the evidence be considered persuasive now (other than the FBI's embarassment over the multi-million dollar judgment in favor of Steven Hatfill and the desperate desire to shift attention away from U.S. bioterror programs)?

In addition, the Times has determined that 200 or 300 hundred people had access to the killer anthrax at Fort Detrick alone:

"Laboratory records obtained by The New York Times show that the anthrax supply labeled RMR-1029, which the F.B.I. linked to the attacks, was stored in 1997 not in Dr. Ivins’s laboratory, in Building 1425, but in the adjacent Building 1412. Former colleagues said that its storage in both buildings at different times from 1997 to 2001 might mean that the bureau’s estimate of 100 people with physical access to it was two or three times too low."

(This is in addition to the numerous other labs which had the killer strain. See this, this and this.)

No wonder Senator Charles Grassley said:

“If the case is solved, why isn’t it solved? It’s all very suspicious, and you wonder whether or not the F.B.I. doesn’t have something to cover up and that they don’t want to come clean.”

And Senator Arlen Specter said:

"My conclusion at this point is that it’s very much an open matter. There are some very serious questions that have yet to be answered and need to be made public.”

Friday, September 5, 2008

WTC 7 Collapsed at the Same Speed as Known Controlled Demolitions

Here is a video of the demolition of the Landmark Tower, Fort Worth, Texas:

The Landmark Tower was 380 feet high.

According to the timer on Youtube, it took about 7 seconds from the start of the collapse (once the building started to fall) until the last of the building reached the ground.

Or check it yourself: here is an online stopwatch (click the green arrow on the left).

WTC 7 was 576 feet high (counting the rooftop penthouses, it was 610 feet; but since the penthouses collapsed a couple of seconds before the main building, and was thus part of a different and discrete process from the collapse of the main building, and - most importantly - because the collapse of the penthouse is irrelevant to the question of whether the main building itself fell as fast as known demolitions, we will ignore the penthouses for now).

WTC 7 collapsed in approximately 7 seconds, not counting the earlier collapse of the penthouses. See this video, and other videos here.

So how did a 576-foot building collapse in the same time as a 380-foot building? Even using controlled demo, that would be an impressive feat.

But let's bend over backwards to be reasonable. Let's add a full second to WTC 7's apparent collapse time - let's call it 8 seconds - to be make sure we are not underestimating how long it took building 7 to collapse.

How did a 576-foot building collapse in 8 seconds when a 380-foot building took 7 seconds?
Acceleration would not have caused the additional 196 feet of Building 7 to disappear in the last second.

Bottom line: WTC 7 collapsed at the same speed as known controlled demolitions.

I encourage researchers to compare the collapse times of other demolitions, and then let me know what you find. Other videos of known controlled demolitions can be found here, here and here.

Hat tip to Dr. Steven Jones. By way of background, I asked Dr. Jones how to calculate collapse speeds in air, to compare with WTC 7's actual collapse time. Dr. Jones responded collapse times in air depends on many variables and is very difficult to calculate, and so it would be better to compare WTC 7 collapse time with known controlled demolition collapse times.

Have Our Leaders Made Us Safer?

The McCain campaign has made 9/11 the centerpiece of their platform. The argument, of course, is that America has not suffered another terrorist attack since 9/11 because of strong Republican leadership.

Let's put aside the fact that the anthrax attacks occured just a couple of weeks later (and were an inside job).

Let's put aside the fact that America hasn't suffered any more terrorist attacks simply because the boys haven't authorized any more false flag attacks (yes, they do deserve credit for that!)

And let's put aside the fact that the Iraq war was launched based on an intentional false linkage with 9/11.

Let's just focus on whether the Republican White House and their democratic and republican co-conspirators in Congress have made us any safer. The answer is clearly no:

The "war on terror" in Iraq and elsewhere has gravely interfered with our national security. For example, American intelligence agencies have concluded that the Iraq war has increased the threat of terrorism (and see this and this)

While the 9-11 Commission made numerous recommendations on how to prevent future terrorist attacks -- many of them simple and inexpensive to implement -- the Bush administration has failed to do so (and see this). Moreover, the White House has actively blocked efforts to do so

The Department of Homeland Security, instead of protecting vulnerable targets, has instead randomly made up lists which include kangaroo centers, petting zoos and ice cream parlors as high-priority terrorist threats. And the administration is refusing to fill important positions at DHS so that our security can be protected

The government is using all of its resources spying on innocent people who obviously have never met a terrorist in their life, and harassing reporters, children and other innocent American citizens instead of real terrorists (see this, this and this)

The administration has rolled out a massive torture program. However, torture makes us less, safe, not more safe, because - according to the top experts - it interferes with interrorators' ability to obtain information, and it radicalizes the people being tortured

By needlessly extending the state of emergency up to today, sidestepping the Constitution and stomping on American's freedoms, they have created unrest and instability. Unrest and instability can lead to civil disobedience, civil war or revolution

America's reputation in the world has been destroyed. Everyone with a tv anywhere in the world knows that the "war on terror" is a fraud (even insider and war hawk Zbigniew Brzezinski other leading experts are now admitting that the war on terror is a racket; a top advisor to the U.S. military has confirmed that the war on terror is a hoax because there is no battlefield solution to terrorism; and the neocons themselves admit that the war on terror is a hoax)

Given that the White House and their republican and democratic co-conspirators in Congress have made America significantly less safe in their handling of 9/11 (oh yeah, that was a false flag attack also) , it is good that they are making 9/11 the centerpiece of the campaign. It gives us the opportunity to point out how unsafe the government has really made us.

Thursday, September 4, 2008

In a Fascist State, Cameras Equal Terrorism

In America and England, citizens are being urged to report people taking pictures as potential terrorists.

Do you assume that that is an innocent attempt to stop would-be terrorists from casing out high-value targets, and for planning terror attacks?

Sorry, but the arrest of well-known journalists outside the Republican convention destroys that belief. The only thing the journalists was doing were filming peaceful protesters and their brutal treatment by the police. See this and this.

In Iraq, journalists are targeted and killed when they show what the military doesn't want shown. America and England are themselves now being treated like war zones. Anyone with a camera is being treated like a "foreign enemy combatant"and a terrorist.

Isn't that the core characteristic of a fascist police state . . . war zone rules being used inside the home country against its citizens?

Moreover, the protesters who were targeted in Minnesota were mainly those who were peacefully filming the protests. Indeed, a 2003 FBI memo describes protesters' use of videotaping as an "intimidation" technique, even though - as the ACLU points out - "Most mainstream demonstrators often use videotape during protests to document law enforcement activity and, more importantly, deter police from acting outside the law."

Clearly, what the FBI is objecting to is the use of cameras to document unlawful behavior by law enforcement.

So what should we do: leave our cameras at home? No. If we all bring our videocameras, cellphone cameras, and other photographic equipment with us wherever we go, we'll be able to document tyrannical behavior, and the police won't have the manpower to hassle all of us.

"Bombs Not Food"

My essay arguing that the arrest of peaceful protesters in Minneapolis - and the labelling of nonviolent protesters as "terrorists" - was for the purpose of grabbing power and stifling dissent has been confirmed.

Specifically, members of the long-time peace group, Food Not Bombs, have now been charged with drummed-up allegations of terrorism (and see this).

Food Not Bombs has been peacefully participating in nonviolent protests for 20 years. They served meals to rescue workers at the World Trade Center after 9/11 and to nearly 20 communities in the Gulf region following Hurricane Katrina (see this). To think that they planned violence at the Minnesota convention is almost like saying that Gandhi secretly advocated violence.

If the group had been called "Bombs Not Food", had advocated for waging war against Iran and other countries, and had argued that the U.S. cannot afford to fund social programs like feeding poor when we need every cent to fight the "war on terror" abroad, do you think they would have been targeted and charged with terrorism? I think, instead, they might be invited to speak on the tv news shows and perhaps even inside the Convention.

Given that the U.S. has been funding known terrorist groups (see confirming articles here and here), the issue doesn't really seem to be about terrorism at all.

Rather, it seems to be about stifling those who are exercising their free speech rights (guaranteed by the Constitution) to criticize the government's imperial war plans.

Note: I don't know any of the actual Food Not Bombs people arrested. But given their group's nonviolent philosophy, government provocation or simply false government allegations are more likely than planned violence by the group.

Wednesday, September 3, 2008

Trying to Avoid Pain, Americans Have Only Delayed the Invevitable and Allowed the Cancer to Spread

I understand that people are afraid to face the fact that 9/11 and the anthrax attacks were inside jobs, because that would be painful. It would challenge their assumptions of benign father figures running our government, and would mean that there is no Santa Claus and governments sometimes do horrible things to their own people to justify power-grabs. (Despite my sarcasm, I actually try to sympathize with people who are locked in a prison of fear).

But if Americans had gotten a spine a couple of years ago and had the courage to deal with reality, we could have thrown the bums behind these false flag attacks out on their ears (and into jail), held a truth and reconciliation commission, appointed honest leaders, gone through the healing process, and gotten back on track towards the effort to try to make real what the Founding Fathers wrote about in the Constitution.

Instead, due to Americans' pain-avoidance tactics and their tremendous efforts to deny reality in order to avoid unpleasant truths, things have gotten worse: freedoms have been more widely abused, costly new wars have been planned, fascism has become more entrenched.

When the Ostrich buries its head in the sand, it only encourages an attack by predators. By trying to the painful truth, Americans have only delayed the inevitable. Instead of avoiding pain, all we have done is allowed the cancer to spread.

What the Violence Against Protesters at the Convention Really Means

A classified FBI intelligence memorandum gives police detailed instructions on how to target and monitor lawful political demonstrations under the rubric of fighting terrorism. And the Joint Terrorism Task Force was involved in infiltrating, tracking and disrupting every-day Americans who disagree with the current administration's policies.

While the ACLU calls such tactics "a return to the days of J. Edgar Hoover's spying tactics", that is not an accurate description.

While Hoover's FBI had its "enemies list", and carried out numerous dirty tricks including Cointelpro, the current governmental actions are a lot worse.

For example, according to a law school professor, the Military Commissions Act of 2006 has the following consequences:

"Anyone who donates money to a charity that turns up on Bush's list of 'terrorist' organizations, or who speaks out against the government's policies could be declared an 'unlawful enemy combatant' and imprisoned indefinitely. That includes American citizens."

According to the New York Times:

"A dangerously broad definition of “illegal enemy combatant” in the bill could subject legal residents of the United States, as well as foreign citizens living in their own countries, to summary arrest and indefinite detention with no hope of appeal. The president could give the power to apply this label to anyone he wanted."

And according to a Yale law professor, "The [torture] legislation....authorizes the president to seize American citizens as enemy combatants, even if they have never left the United States. And once thrown into military prison, they cannot expect a trial by their peers or any other of the normal protections of the Bill of Rights."

After they disappear into the black hole of enemy combatant status, they may, of course, also be tortured.

See also this FBI memo showing that peace protesters are being labeled as "terrorists" (and see this).

Is that why mass arrest facilities were set up for the Democratic National Convention, and signs on the walls of the warehouse read "Warning! Electric stun devices used in this facility" (and see this)?

Remember, the Department of Homeland Security - instead of protecting vulnerable targets from alleged terror threats - has instead randomly made up lists which include kangaroo centers, petting zoos and ice cream parlors as high-priority terrorist threats. The fact that they are now targeting reporters, children, little old ladies and skinny vegetarians is just more proof that the "war on terror" has nothing to do with terror, and everything to do with grabbing power and stifling dissent.

Tuesday, September 2, 2008

Police Terrorize Children, Reporters and Other Dangerous Criminals

Federal and local law enforcement officers are literally terrorizing people in Minneapolis for their thought crimes.

Police have essentially been waging preemptive war by infiltrating, tracking and disrupting every-day Americans who disagree with the current administration's policies.

As former constitutional lawyer Glenn Greenwald wrote on August 31st:

"We have a massive assault led by Federal Government law enforcement agencies on left-wing dissidents and protesters who have committed no acts of violence or illegality whatsoever, preceded by months-long espionage efforts to track what they do."

As Greenwald and others note, those targeted were little old ladies and grandfathers, vegetarians, and other people who are not a threat to anyone.

And as law school professor and President of the well-respected legal group National Lawyers Guild, Marjorie Cohn, writes:

"Local police and sheriffs, working with the FBI, conducted preemptive searches, seizures and arrests. Glenn Greenwald described the targeting of protestors by 'teams of 25-30 officers in riot gear, with semi-automatic weapons drawn, entering homes of those suspected of planning protests, handcuffing and forcing them to lay on the floor, while law enforcement officers searched the homes, seizing computers, journals, and political pamphlets.' Journalists were detained at gunpoint and lawyers representing detainees were handcuffed at the scene.
'I was personally present and saw officers with riot gear and assault rifles, pump action shotguns,' said Bruce Nestor, the President of the Minnesota chapter of the National Lawyers Guild, who is representing several of the protestors. 'The neighbor of one of the houses had a gun pointed in her face when she walked out on her back porch to see what was going on. There were children in all of these houses, and children were held at gunpoint.'"

Cohn notes that "preventive detention violates the Fourth Amendment" (you're supposed to have a justification for imprisonment, not just thought crimes).

Then today, the police set out to publicly intimidate Americans before any protests had even begun outside the Republican National Convention:

"The brigades of police officers would periodically chant military terms and march around in formation ('Double Time!'), while helicopters hovered overhead and Humvees drove by frequently.

***
Clearly, and particularly in the wake of this weekend's thuggish raids, the intent was to create a highly intimidating, militarized and high-tension climate."

Once the protests started, the police fired rubber bullets, teargas, pepper spray and concussion grenades at protesters, then arrested them en masse.

They also specifically targeted established journalists (and see this) simply for trying to cover the protests. What's next . . . assassinating reporters like the U.S. did in Iraq?

Provocation at Protests Is A Type of False Flag Terror

When agents provocateur commit violence or destroy property at peaceful protests, they are carrying out false flag terrorism.

Wikipedia defines false flag terror as follows:

False flag operations are covert operations conducted by governments, corporations, or other organizations, which are designed to appear as if they are being carried out by other entities. The name is derived from the military concept of flying false colors; that is, flying the flag of a country other than one's own. False flag operations are not limited to war and counter-insurgency operations, and have been used in peace-time; for example, during Italy's strategy of tension.

If intelligence agencies or federal, state or local police themselves commit acts of violence against people or property, and then blame it on peaceful protesters, that is - by definition - false flag terror.

Read this to see how eagerly the mainstream media are to pin acts of violence on peaceful protesters, instead of the thugs who actually committed them.

And if you don't know about agents provocateur, read this statement about Burma:

"They’ve ordered some soldiers in the military to shave their heads, so that they could pose as monks, and then those fake monks would attack soldiers to incite a military crackdown. The regime has done this before in Burma, and we believe they would do so again."

this news from Canada, and this Wikipedia discussion.