Business As Usual = Bending Over for the Rapist

Time to stop crying and start the revolution

See also Juan Cole’s piece below.

Our Republic Raped and Still No Revolution!
By Joel Hirschhorn / September 22, 2008

Are Americans ready for a revolution? What worse than the current meltdown of the financial sector, the unraveling of our economy, and burdening us and future generations with astounding debt is needed to convince Americans that the two-party plutocracy has sold out ordinary Americans? What we are witnessing is far worse than the taxation without representation that spurred the American Revolution. Taxation with MISrepresentation is a greater evil and shameful sellout of democracy that so many Americans have fought and died for.

Yet, despite over 80 percent of Americans saying that the nation is on the wrong track – BEFORE the current financial crisis, Americans sheepishly seem ready and willing this year to keep voting for Democrats and Republicans. If they had one shred of the smartness and courage of our nation’s Founders, they would overwhelmingly vote for third party presidential candidates to send the clearest and most patriotic message possible to the ruling class that has both major parties in their pocket.

Ousting Democrats and Republicans is more justified and needed than removing the tyranny of the King of England. Our elected domestic tyranny operating as a plutocracy masquerading as a democracy has been raping our nation. Yet middle class victims seem more than willing to keep bending over and asking for more pain and insult as they fall hook, line and sinker for the lies of both Barack Obama and John McCain.

It is far too easy, with the financial sector meltdown, for Americans to only blame Republicans. But Bill Clinton started the deregulation of the financial sector and every evil and stupid thing George W. Bush and Republicans have done could not have happened without the cooperation of corrupt and cowardly Democrats in Congress. They too have inflicted economic sodomy on us and contributed to disgracing our Constitution.

What incredible absurdity that the government seems ready to spend $700 billion to bail out countless crooked, mismanaged and greedy companies (and similar money on the Iraq war) and not ever seriously propose to spend that kind of money on rebuilding the nation’s crumbling physical infrastructure that would immediately create millions of new good paying jobs desperately needed by the middle class.

Now is the time for Americans to wake up, stand up and vote down Republicans and Democrats. How wonderful it would be if the candidate that claims the presidency only receives, say, 20 percent of all eligible voters. This is the first necessary step for we the people to take back OUR country.

Source / Associated Content

And there’s this independently published piece from the normally rather subdued Juan Cole today. Clearly he’s very worked up about recent events in the US:

A Nation of Masochists
By Juan Cole / September 22, 2008

“I send my tormentor hurrying
hither and thither in the
service of my
suffering and desire.”
– Mason Cooley (d.2002)

I have concluded that Americans, who pretend in public to be straitlaced, are in fact rabid masochists addicted to whips, black leather and the application of fists. It turns out that large numbers of people throughout the world are accidentally asphyxiated every year because they need to be choked for maximum pleasure.

The diagnosis of national masochism is the only thing that can satisfactorily explain the poll numbers in the presidential race.

Let’s get this straight.

The Republican Party came to Washington, DC, in 2000 with a solid majority in both houses of Congress and on the Supreme Court, allowing them to steal the presidency, as well. If you wanted to know what a pure Republican-Party government unhindered by the Democrats, Libertarians, Greens or Socialists might look like, this was the moment.

So they came to power when there was a budget surplus bequeathed by a Democratic president.

They immediately ran up a big deficit every year since, doubling the national debt from $5 trillion to $10 trillion. You don’t run big deficits of $300 and $400 billion a year in good times according to Keynes. You save the the deficit spending for a recession, when the economy needs a jolt. If you’re already racking up a big deficit every year in a good economy, you have no way of making a difference during a significant downturn except by then going for a truly mega-deficit, which risks destroying the value of your currency abroad. In a service economy like that of the US, a dollar with a declining value might not even help the economy via exports very much, since the manufactured goods are being made down in Mexico now, anyway.

Note that Clinton had been talking about using the surplus to pay down the debt or to fix the looming crisis in social security.

With the government encumbered with $5 trillion in new debt before September, and now with another trillion and a half (probably when it is all said and done with), how exactly will social security be fixed?

(Hint: Republican leaders such as Ronald Reagan and Newt Gingrich hated social security, because the people are grateful to the Democrats for it. Bush tried to privatize it and McCain would have helped him; you wonder if they are trying deliberately to destroy it. Social security is the main reason for which the elderly are not now, as they were in the 1930s, the poorest and most miserable section of society.)

Then many the Republicans came to Washington with a crooked plan to use fraudulent methods to ensure that campaign financing went almost exclusively to them through super-lobbyists like Jack Abramoff. Grover Norquist’s K-Street Project aimed at guaranteeing big corporate dollars for the Republicans in exchange for their granting the corporations the right to write the legislation affecting their industry. Thus, laws governing pharmaceuticals were written by the pharmaceutical industry lobbyists and just signed off on by the Republicans.

This scam goes beyond Marx’s fear that government in a business society was just a “managing committee” for the business classes. Tom Delay, from 2002 the Republican Party majority leader in the House, was too lazy even to be the managing committee! The K-Street crowd just let the business classes run the legislature directly, themselves, having the regulatory laws written to suit them.

So Abramoff, Delay, the K-Street crowd are busted. Once upon a time such a thing would have been a huge political scandal and would have haunted the party that produced it. But because US Big Media is mostly Republican-owned, it just quietly subsided as a story.

It is not just that the rap sheet against the Class of 2000, 2002, and 2004 among the Republican politicians is longer than a trans-Atlantic cable, it is that so much of the corruption took the form of a conspiracy.

All parties have people in them looking to get rich on the side. But the K Street Project and various other such scams weren’t just about individual aggrandizement. They were about fixing the whole American system permanently to kow-tow to the super-rich without so much as a whimper, and to positively punish the middle classes.

After the 2002 mid-terms, even George W. Bush wanted to do a tax cut for the middle classes. But Cheney over-ruled him, insisting on another deep tax cut for the very wealthy. We won the mid-terms, Cheney said. This is our due. Deficits don’t matter. “Our” due? Cheney is saying that the Republican Party is the party of the super-rich, of the 3 million at the top of American society who own 45% of the privately held wealth (as though we were Brazil), and they are the ones that will be exclusively benefited by Republican rule.

Of course, there were many other conspiracies by the pirouetting pirates of plunder.

There was the Iraq War, one of the great criminal conspiracies of modern times. Barton Gellman has how related the story of how Dick Cheney lied to Dick Armey before the vote on the war, telling him that Saddam’s family was all al-Qaeda and that Saddam’s evil scientists had made a suitcase nuclear bomb that he would certainly turn over to Bin Laden, and such rank horse manure as that. Dick Armey weeps, says he deserved better than to be bullshitted by the vice president of the United States.

They took us to war against a country that had not attacked the United States; they killed or maimed 33,000 Americans, and turned a whole Arab Muslim country into a burned-out hulk, displacing millions and continuously bombing the very cities that they had conquered and occupied, killing and disfiguring.

They propagandized us with implausible lies about mobile biological weapons labs and Baathist al-Qaeda, and our journalists and their corporate bosses bought them hook line and sinker, as did the public.

Cable and satellite television “news” tells us nothing of elections in India or constitutional crisis in Thailand, and barely mentions a major workers strike at Boeing. Dozens of car bombs go off in Iraq and we are told it is “calm” now. It is a vast electromagnetic form of bread and circuses, wherein hapless celebrities and philandering politicians are fed to the lions before millions of cheering plebes, by corporate moguls desperately hoping that the marks will not notice the legion of pickpockets in the arena, relieving them of their purses.

This crew in Washington thought nothing of assiduously attempting to induce the press to out a covert CIA operative working against Iranian nuclear proliferation, Valerie Plame. Their culture of lies is such that they attempt to divert attention from all the phone calls to journalists by Irv Lewis Libby and Karl Rove trying to get the press to print her name by saying that those two did not succeed. As if the attempt were not dastardly!

Why is trying to inform the Iranians of the identity of a CIA field officer assigned to spy on Iran not an act of treason? After all, you can’t inform the world without also informing the Iranians. Isn’t the punishment for treason hanging?

The Republican Party conducted a vast illegal spying operation on Americans and on foreign diplomats. We still don’t know why exactly, and that the operation had domestic political motivations cannot be ruled out.

They imposed on us this so-called PATRIOT act that gutted the Constitution. The peaceful protesters in St. Paul at the RNC were actually charged with being terrorists, in this Brave New World.

By their incompetence and cupidity the Republican politicians deeply damaged the relief effort for one of America’s great cities, New Orleans, which will never see the $33 billion pledged for its reconstruction. Not to mention that levies and bridges are breaking and falling down all around us because Cheney did not want to tax his billionaire friends to pay for the country’s infrastructural upkeep.

And then they so radically deregulated and removed any oversight from the banking system that they came within hours of presiding over a 1929-style absolute meltdown of the entire financial and securities system. To cover the criminal activities of their cronies, they are now proposing to impose a fine of one trillion dollars on the middle class, to ensure that their partners in crime will receive their $25 million Christmas bonuses and be held harmless for their misdeeds.

And in the wake of the greatest and most sustained act of systematic plunder since the Mongol hordes appropriated to themselves the riches of everyplace in Asia from Beijing to Isfahan, the reaction of the supine and slave-like American voting public is to scratch their heads and have a hard time deciding if they would like more of the same.

Despite his aristocratic prerogatives and connections in high society, even the Marquis de Sade himself was brought down by a lowly maid, who complained to the police of his cutting her while having his way with her, leading to his arrest.

In contrast to that plucky domestic servant, the American public appears to enjoy being lacerated while being badly used, moaning with delight at each new act of abuse and abasement, while, blue-lipped, gasping for air.

One worries for our children, threatened with the fate of the homeless street children so common in the sort of third world country into which we are being turned by our managing committee.

But, well, if you are determined to bend over on November 4, at least I hope you enjoy pain. In that case, you are going to be ecstatic.

Source / Informed Comment

The Rag Blog

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All Things Being Equinox…

Photo by Stephanie Chernikowski / The Rag Blog.

may your autumn be healthy and colorful.

Stephanie Chernikowski

The Rag Blog

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David Hamilton : McCain Running on Racism


‘McCain has known all along he couldn’t win on issues’
By David P. Hamilton / The Rag Blog / September 22, 2008

Observations on this morning’s news.

“Fox News” paired a white male Demo spokesperson with a maybe Latina female Repug counterpart. Question: Is race the principal issue in the presidential campaign? As evidence, polls show a significant percentage of white voters will not, under any circumstances, vote for a black man.

These polls also conclude that this overtly racist portion of the white electorate is only the tip of the iceberg. Otherwise, Obama would be way ahead, more like the impending Demo landslide in the Congress. Weird result: both pundits agreed that racism is a very major factor. To my surprise, the Repug accepted without blinking that they were the benefactors of the racism vote. Sort of, “yeah, we’re ok with that.”

A few minutes later, McCain is shown speaking to an Irish-American assemblage in Scranton, PA, on all cable channels. Using the established codes, he openly panders to racism. The audience behind him is entirely white. While discussing immigration, he praises the contributions of past immigrant groups – “the Irish, the Italians, the Poles . . . and yes, the Hispanic, too.(voice dropping)” Pointedly, no mention was made concerning the contributions of the descendants of past involuntary immigrants.

McCain has known all along he couldn’t win on issues. He wants competitive branding, a Coke vs. Pepsi election. He has also been totally open to scurrilous negative campaigning and perpetual lying. But the core of his campaign now is mobilization of the racist vote by conspicuously dropping all pretense of diversity. The nomination of a small (white) town evangelical for Vice President supports this analysis. Activating the most racist component of American society has been Sarah Palin’s primary role. And it is now the Repugs’ primary strategy to win.

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The Monday Movie: Does Capitalism Work?

The myth that capitalism works conveniently ignores reality. In this video, political scientist and activist Michael Parenti debunks this popular myth.

Thanks to Diane Stirling-Stevens / The Rag Blog

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Heed H.R. Mencken : Economy Notwithstanding, This Election Not a Sure Thing

H.R. Mencken: Some wisdom worth heeding?

‘We face an election currently as did the USA and Germany in 1932’
By S.R. Keister / The Rag Blog / September 21, 2008

H.L. Mencken once wrote, “The only way to success in American life lies in flattering and kow-towing to the mob.”

It seems an axiom that the American public will support the Democratic Party in the Autumn if the economy is in tatters. Is this assumption valid looking at a historical precedent? I have been party to a discussion with several well trained academics in the fields of history, economics, anthropology, and sociology and we are not at all certain of that presumption. We have coined the term the “Weimar Syndrome.”

Let us begin to look at several features of this line of reasoning. The current American electorate is much less informed, less cultured, less interested, and less educated than the citizens of the Weimar Republic 1919-1932.

Germany after World War I was not devastated, though suffering thousands of casualties, as the actual fighting had been on French soil. The nation was humiliated by the Versailles Treaty; however, at the Treaty of Paris had received Allsaise-Lorraine from France. During the Weimar period the German intelligencia and artistic communities thrived. Physicians and engineers came from around the world to study in Germany. The culture of the cabaret, the avantguarde came into being; however, the culture produced more serious artists and thinkers such as Bertoit Brecht, Kurt Weill, and Arnold Schoenberg among others. Art, music, engineering, medicine, and psychology thrived.

Yet, there was a cultural undercurrent of respect for authority developed under the century long rein of the Hohenzollerns (The Empire). There was a respect for the history and mythology of a superior people and nation, reinforced by a pride in militarism and a strong religious influence. In spite of the daring-do there was a strong feeling of family and tradition. There was a feeling of pride in the industrial might of the capitalists such as Krupp and Farben.

The great depression enfolded Germany in 1929 as it did the remainder of the Western World and thinking was that the Social Democrat Party would be the logical institution to turn to in time of financial crises.

We face an election currently as did the USA and Germany in 1932. We currently have the choice of an elderly gentleman, with an obviously failing memory, but an expert in changing the topic, avoiding productive discussion, and an expert at throwing out well rehearsed one-liners. Aligned with him a woman, a cross between Lucrecia Borgia and Shakespeare’s Katerina, with great appeal to the NRA and Religious Right. Both are experts at jingoism and exhorting divine guidance. On the other hand we have two well educated, thinking, sophisticated gentlemen who try their best to present the nation’s problems in a well defined and learned way. Yet, one gentleman presents something “different.” In the mind of the unsophisticated.

Something “different” is perhaps something to be feared. The British newspaper The Guardian recently had an extensive article on American “anti-intellectualism.”

With the economic collapse in both the USA and Germany in 1932 the electorate in both nations looked for underlying reasons, the American people recognized unbridled capitalism as the probable cause, while the German’s blamed other nations, as we now blame Islamic extremists, and people of a “different type” within their society. Remember the economy was similar in both nations. America elected FDR, but the Germans, fearing “something different” in the Social Democratic Party, the reasonable choice, made another choice which changed the history of the world.

Please let us not take anything for granted, as the future of the nation is at stake. As one whose ancestors arrived here in 1754, I live in fear that this may indeed be the end of our Republic as we have known it. Obama is not perfect but please, please, let this old curmudgeon take his last breath in a nation based on good will, trust, and respect for the better things in man’s nature. At least Obama has integrity, honor, a sense of reason, and feeling for those less fortunate.

Again, Mencken: “There’s no underestimating the intelligence of the American public.”

[S.R. Keister posts to Progressives for Obama.]

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Texas Court Decision Worthy of Tom Delay : Checks Aren’t Money!

The Hammer his own self. Photo by Carrie Devorah / WENN.

Court Writes Delay a Blank Check
By Andrew Wheat / September 19, 2008

Two years after scandal drove Tom DeLay from Congress and six years after DeLay allegedly violated state law to make over Texas’ congressional map, a state appeals court recently hammered out a stunning legal opinion that did all it could—and more than it should—to rescue DeLay and two fellow indicted cronies. Freeing jurisprudence from the shackles of prudence, the ruling is a tour de brute force that is every bit worthy of the man for whom it was written.

Acting on a pretrial appeal by two cronies who helped DeLay run the Texans for a Republican Majority PAC in 2002, three Republican state judges on the Austin-based Third Court of Appeals twisted their August 22 ruling into a would-be DeLay rescue rope. Travis County District Attorney Ronnie Earle had indicted John Colyandro of Austin and Jim Ellis of Washington, D.C., in 2004 and 2005 on charges that they raised illegal corporate contributions for TRMPAC and illegally laundered $190,000 of the funds though a Republican political committee in Washington. (DeLay faces similar laundering charges.) The appeal that Colyandro and Ellis filed three long years ago argued that the state laws they allegedly broke are unconstitutionally vague.

Rejecting the defendants’ arguments, most of the court’s 22-page opinion belabors the well-established constitutionality of laws that prohibit corporate campaign contributions in Texas. What’s notable is that it took the judges so long—in words and years—to tackle a no-brainer.

Next, the judges address claims that the money-laundering law that Earle invoked is unconstitutionally vague. The GOP judges do their best to spin gold from straw. DeLay, Colyandro, and Ellis all face money-laundering charges for transactions that occurred shortly before the November 2002 election. That’s when TRMPAC sent a $190,000 check to an arm of the Republican National Committee. Two weeks later, the committee sent a total of $190,000 in campaign contributions to seven TRMPAC-backed legislative candidates in Texas. Earle argues that TRMPAC used this financial round-trip to funnel corporate contributions illegally to Texas legislative candidates.

The Austin judges crafted a semantic escape hatch, arguing that the money-laundering law applied to money—but not to TRMPAC’s checks. The law says a person commits a crime when he or she “conducts, supervises, or facilitates a transaction involving the proceeds of criminal activity.” The law defined these “proceeds” as “funds” such as domestic and foreign currency. Since the law did not specifically say that checks are “funds,” the GOP judges wrote that the money-laundering statute does not apply to TRMPAC’s $190,000 check—or the seven smaller checks that it begat.

To support this claim, the judges cite differences between checks and cash—differences that vanish the instant a check is cashed, of course. The opinion notes that checks might not be converted to cash if the signature is forged, the check writer stops payment, or the check bounces. Yet none of these scenarios applies to the eight checks involved in the TRMPAC case. Those checks performed exquisitely as cash. In a defining moment, the judges wrote, “It is too much of a leap for us to conclude that a reasonable person of ordinary intelligence would look at the pre-2005 version of section 34.01 and be aware that it intended to criminalize the ‘laundering’ of checks.” In fact, this is precisely what reasonable, intelligent people would conclude—were they not trying to help fellow party activists beat a criminal rap.

The Republican appeals judges admit in a footnote that the Dallas-based Fifth Court of Appeals previously upheld two money-laundering convictions involving checks. Gary Lee got 20 years and a $10,000 fine for laundering the $29,000 check that he induced a 92-year-old victim to pay him for phantom home repairs. Insurance scammer Michael Lee Davis got 60 years and a $10,000 fine for charges that included laundering checks (Davis recruited people at AIDS resource centers to conceal their illness while selling their life insurance policies to investors). Both of these crooks failed to use the checks-are-not-funds defense. If they had, can anyone visualize their actually beating their raps in a Texas courtroom? If the pixels won’t align, repeat the exercise. This time, imagine the crooks raising this defense before judges who are heavily biased in their favor. Voila!

After the court issued its all-Republican opinion, Democratic Justice Diane Henson issued a scathing dissent that panned her colleagues for improperly tackling the check issue in what should have been a narrow, expedited, pretrial review. The four Republicans on the court then overruled a request by their two Democratic colleagues for all six justices to review the TRMPAC appeal. Democratic dissenter Henson and two of the Republicans who signed the opinion, Alan Waldrop and Bob Pemberton, were all narrowly elected in 2006 with less than 52 percent of the vote. The opinion’s third GOP signatory, Chief Justice Ken Law, faces Democratic challenger Woodie Jones this November.

A major disagreement between the TRMPAC majority opinion and the dissent is over the significance of a law that the legislature passed after the first TRMPAC indictments, in September 2004. In May 2005, lawmakers approved a measure, House Bill 3376, that explicitly says checks are “funds” that can trigger money-laundering penalties. The Democratic dissent says legislators simply made explicit what the world knew all along: Checks are funds. The GOP justices argue that the Legislature did not make checks money-laundering funds until the new law took effect on September 1, 2005. Note that this date came three years after TRMPAC’s alleged crimes, one year after Earle filed his first TRMPAC money-laundering charges, and several weeks before DeLay’s initial indictment on September 28.

All this raises intriguing questions: What was the genesis of the Legislature’s 2005 tweaking of the money-laundering statute? Did TRMPAC’s beneficiaries push the bill to hand activist GOP judges a tool? Did Earle’s helpmates push it in a lame effort to fix the DA’s laundering indictments (the tweak did not apply retroactively to TRMPAC’s actions)? Or—to the dismay of conspiracy theorists of every stripe—did the tweak occur for reasons unrelated to TRMPAC?

The Houston Chronicle’s Rick Casey recently pointed out that the author of this legislative tweak is none other than Republican state Rep. Larry Taylor of Friendswood. As a House candidate in October 2002, Taylor received one of the $20,000 checks that TRMPAC allegedly laundered. (Taylor even cashed the check into “funds.”) As a freshman lawmaker six months later, Taylor testified before the House Insurance Committee on his bill. He and other witnesses said that the measure implemented suggestions that prosecutors and insurers made to better prosecute insurance fraud.

Several interesting moments are evident when tapes of that hearing are reviewed three years later. For example, Insurance Committee Chair John Smithee, an Amarillo Republican, voiced unease that his panel “isn’t really accustomed to getting penal-code-type statutes.” Taylor testified that his bill just targeted insurance fraud (his bill’s money-laundering provisions have no such limitation). “I don’t want to get involved in a lot of spillover into other areas,” he told the committee. To prevent unintended consequences, Taylor assured the chair that the bill would be vetted by an expert in criminal law: then-Rep. Terry Keel, an Austin Republican. This was a striking choice in retrospect. A former prosecutor in Earle’s office, Keel made a failed 2006 bid for the Texas Court of Criminal Appeals (the court of last resort for criminal matters like the TRMPAC case). Last year, when the House parliamentarian abruptly resigned during a mutiny over the autocratic rule of TRMPAC-backed House Speaker Tom Craddick, the speaker appointed Keel as his parliamentarian.

If a vast, right-wing conspiracy was under way in 2005, it seemed to catch Earle off guard. Several attorneys from his office formally registered with the House Insurance Committee in support of Taylor’s bill. The only one who testified said that the money-laundering statute had frustrated her office’s ability to prosecute a car-crash ring that laundered checks from fraudulent health care claims. “The way the money-laundering statute was worded at the time, it was too cumbersome—it was not worth it—to even try to prosecute under that,” Assistant District Attorney Barrett Hansen testified. Parts of Hansen’s testimony about the statute could be confused with passages in the TRMPAC opinion that GOP judges issued three years later. “I think when it was originally drafted, it [the laundering law] was meant to apply only to proceeds from drug transactions,” Hansen told the committee. Responding to questions about this testimony, Assistant District Attorney Holly Taylor told the Observer that her office always has believed that applying the old statutory language to laundered checks is “cumbersome,” but “our office has never maintained that it is impossible.”

The TRMPAC case now returns to semi-retired Judge Pat Priest, who must decide what to do with the appellate court’s editorializing on the inapplicability of money-laundering laws to checks dated before September 1, 2005. If Priest, a Democrat, hews to the line of Justice Henson’s dissent, the TRMPAC defendants surely will return to the Republican-controlled appeals court. All this illustrates the insanity of having judges wage partisan campaigns funded by interests with cases before the courts. Texas’ judicial system has a congenital, obstetrical defect that results in recurring miscarriages. Until this corrupt system is reformed, the Texas Election Code should be amended with a disclaimer that reads, “The ruling party can violate any provision of this law with impunity.”

[Andrew Wheat is research director of Texans for Public Justice.]

Source / Texas Observer

Thanks to David McQueen / The Rag Blog

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Israel’s Olmert Is Finished and Tarnished

We just posted about this. It seems to have finally yielded a result. It would be outstanding to see this change yield a meaningful dialogue for peace with Palestine. And even more outstanding if BushCo could keep its nose out of the discussion.

Richard Jehn / The Rag Blog

Israeli Prime Minister Ehud Olmert speaks during a cabinet meeting in Jerusalem Sunday. Foreign Minister Tzipi Livni, left, was recently elected to replace him as chairman of the governing Kadima Party. Photo: Jim Hollander, Pool / AP.

Israeli Prime Minister Formally Resigns
By Mark Lavie / September 21, 2008

JERUSALEM — Israeli Foreign Minister Tzipi Livni wasted no time Sunday working to put together a new government, meeting with potential coalition partners even as outgoing Prime Minister Ehud Olmert formally resigned. Her ability to move fast in her first task could have far-reaching effects on Mideast peace talks.

Livni, who has gained respect for favoring peace deals with the Palestinians and Syria while distancing herself from the unpopular Olmert, would become Israel’s second female prime minister after Golda Meir, who served from 1969-1974.

A former lawyer and one-time agent in the Mossad spy agency, Livni has 42 days to form a government.

Olmert remains in office until a new government is approved by the parliament, and he has pledged to press ahead with peace efforts as long as he is premier. That in itself might push reluctant Israeli politicians to deal quickly with Livni.

Olmert’s dismal approval ratings approach single figures, and both those who favor an accord with the Palestinians and those who oppose it don’t want him to be the one who presents an agreement to the people.

She met leaders from the pivotal Shas Party Thursday, hours after she won a primary election to succeed Olmert as head of their Kadima Party. Over the weekend, she sat with leaders of several other factions, and later Sunday, she scheduled a meeting with Defense Minister Ehud Barak, head of the Labor Party, Olmert’s main partner.
Formal steps were overtaken by events, and the two unfolded in parallel universes.

Olmert told his Cabinet on Sunday morning that he would resign and followed that with a visit to the official Jerusalem residence of President Shimon Peres — both formalities in a process that began in late July, when Olmert caved under the pressure of multiple corruption probes and announced he would step down after the Kadima primary election.

“This decision was not easy, it was not simple, and it was not taken in an offhanded way,” Olmert said before the start of the Sunday Cabinet meeting. He pledged to help Livni, a longtime rival, form a new government.

“Prime Minister Ehud Olmert presented to me this evening his resignation as head of the government,” Peres said after the two met. Peres thanked him for his service. Olmert did not talk to reporters.

At stake is political stability in Israel as the clock winds down on a January target date for a peace accord with the Palestinians, set by Olmert and Palestinian President Mahmoud Abbas at a U.S.-sponsored peace conference last November.

Livni favors negotiations and making concessions to forge a peace agreement, but if she fails to form a coalition, elections would be called, and Israel might not have a new government until next spring. That could freeze peace efforts for months.

Olmert succeeded the popular and respected Ariel Sharon, who was felled by a stroke, and weeks later Olmert led Israel into a war with Hezbollah guerrillas in Lebanon. The decision to go to war and its inconclusive outcome, along with the damage wrought by almost 4,000 rockets fired at Israel by Hezbollah, decimated Olmert’s popular support.

Then old corruption allegations caught up with him. Police began pressing their investigations, and a key witness testified in a “trial” against Olmert though no charges had been filed. That led Olmert to step down, setting the search for a new leader in motion.

On Sunday, Peres consulted with the parties over who should join the new government. Peres faced a shorter deadline than the week allotted him by law — he was due to leave for the United Nations on Monday to address the General Assembly session the next day. Peres said he would announce his decision before leaving for New York.
It was a foregone conclusion that Livni would be his choice, so even before receiving the formal title of prime minister-designate, Livni was sounding out the parties about their demands for remaining on or joining her team.

Livni won the Kadima primary by a small margin over hawkish former Defense Minister Shaul Mofaz, who announced he would not serve in her government. With Kadima already holding only 29 seats in the 120-member parliament, a split in her party could doom her efforts to forge a majority coalition.

Shas has already demanded additional funds to help needy Israelis, the party’s main constituency.

Barak’s Labor is in a difficult position. On the one hand, Labor does not want to continue in its subordinate position as a junior partner to Kadima. But polls show that if an election were held now, Labor would win only a dozen or so seats, a drastic comedown for the party that ruled Israel practically unchallenged for its first three decades.

Analysts believe that after an initial show of reluctance, Labor will join along with Shas and the Pensioners party, the other member of the outgoing government. Livni would like to add others to the team to increase its stability.

The main opposition leader, Benjamin Netanyahu of the hawkish Likud, is calling for new elections. Likud stalwarts are ridiculing Kadima, Livni and Olmert, saying they have failed the country and must all be replaced. Polls show Kadima and Likud virtually tied if an election were held now.

Livni has 28 days to form a government after she is formally tapped by Peres and can receive an extra two weeks if necessary. Israeli political historians point out that in every case in the past, the politician chosen to form a government here has succeeded.

Copyright 2008 The Associated Press

Source / America On Line

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Preserving the Record of Wrong-Doing and Deceit

Vice President Dick Cheney has argued that his office is not part of the executive branch of government. Photo: Filippo Monteforte, AFP / Getty Images

Judge Orders Cheney to Preserve Records
By Pete Yost / September 21, 2008

WASHINGTON — A federal judge on Saturday ordered Dick Cheney to preserve a wide range of the records from his time as vice president.

The decision by U.S. District Judge Colleen Kollar-Kotelly is a setback for the Bush administration in its effort to promote a narrow definition of materials that must be safeguarded under by the Presidential Records Act.

The Bush administration’s legal position “heightens the court’s concern” that some records may not be preserved, said the judge.

A private group, Citizens for Responsibility and Ethics in Washington, is suing Cheney and the Executive Office of the President in an effort to ensure that no presidential records are destroyed or handled in a way that makes them unavailable to the public.

In a 22-page opinion, the judge revealed that in recent days, lawyers for the Bush administration balked at a proposed agreement between the two sides on how to proceed with the case.

Cheney and the other defendants in the case “were only willing to agree to a preservation order that tracked their narrowed interpretation” of the Presidential Records Act, wrote Kollar-Kotelly.

The administration, said the judge, wanted any court order on what records are at issue in the suit to cover only the office of the vice president, not Cheney or the other defendants in the lawsuit. The other defendants include the National Archives and the archivist of the United States.

In response to the ruling, Cheney spokesman James R. Hennigan said that “we will not have any comment on pending litigation.”

The lawsuit stems from Cheney’s position that his office is not part of the executive branch of government.

This summer, Cheney chief of staff David Addington told Congress the vice president belongs to neither the executive nor legislative branch of government, but rather is attached by the Constitution to Congress. The vice president presides over the Senate.

The lawsuit alleges that the Bush administration’s actions over the past 7 1/2 years raise questions over whether the White House will turn over records created by Cheney and his staff to the National Archives in January.

In 2003, Cheney asserted that the office of the vice president is not an entity within the executive branch.

Two historians and three groups of historians and archivists joined CREW in filing the suit two weeks ago.

Copyright 2008 The Associated Press.

Source / America On Line

The Rag Blog

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Spreading Viral E-Mails Around the World



If you grow up in Hawaii, raised by your grandparents, you’re “exotic, different.”

If you grow up in Alaska eating mooseburgers, you’re a quintessential American story.

++++++++++++++++

If your name is Barack, you’re a radical, unpatriotic Muslim.

If you name your kids Willow, Trig and Track, you’re a maverick.

++++++++++++++++

If you graduate from Harvard law School and be President of the Law Review, you are unstable.

If you attend 5 different small colleges before graduating, you’re well grounded.

++++++++++++++++

If you spend 3 years as a community organizer, create a voter registration drive that registers 150,000 new voters, spend 12 years as a Constitutional Law professor, spend 8 years as a State Senator representing a district with over 750,000 people, become chairman of the state Senate’s Health and Human Services committee, spend 4 years in the United States Senate representing a state of 13 million people while sponsoring 131 bills and serving on the Foreign Affairs, Environment and Public Works and Veteran’s Affairs committees, you don’t have any real leadership experience.

If your total resume is local weather girl, 4 years on the city council and 6 years as the mayor of a town with less than 7,000 people, 20 months as the governor of a state with only 650,000 people, then you’re qualified to become the country’s second highest ranking executive.

++++++++++++++++

If you have been married to the same woman for 19 years while raising 2 beautiful daughters, all within Protestant churches, you’re not a real Christian.

If you cheated on your first wife with a rich heiress, and left your disfigured wife and married the heiress the next month, you’re a Christian.

++++++++++++++++

If you teach responsible, age appropriate sex education, including the proper use of birth control, you’re eroding the fiber of society.

If, while governor, you staunchly advocate abstinence only, with no other option in sex education in your state’s school system while your unwed teen daughter ends up pregnant, you’re very responsible.

++++++++++++++++

If your wife is a Harvard graduate lawyer who gave up a position in a prestigious law firm to work for the betterment of her inner city community, then gave that up to raise a family, your family’s values don’t represent America’s.

If your husband is nicknamed “First Dude”, with at least one DUI conviction and no college education, who didn’t register to vote until age 25 and once was a member of a group that advocated the secession of Alaska from the USA, your family is extremely admirable.

++++++++++++++++

OK, much clearer now.

Source / Political Insider

Thanks to Diane Stirling-Stevens / The Rag Blog

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Austin : Demonstrators Oppose Military Recruitment for Iraq War

Demonstrators protesting the continuing occupation of Iraq gathered on Friday, September 19 at Dobie Mall adjacent to the campus of The University of Texas at Austin.

Dobie Mall houses a military recruitment center and has been the site of anti-war protests in the past.

The demonstrators represented MDS/Austin, CodePink and the Campus Antiwar Movement to End the Occupations (CAMEO). The action was part of the Iraq Moratorium, a monthly event during which activities in opposition the Iraq war take place throughout the country. Photo by Alice Embree / The Rag Blog.

Thorne Dreyer / The Rag Blog / September 21, 2008

The Rag Blog

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But Will It Happen Again in 40 Days?


New Events Happening in King-Lincoln v. Blackwell Case
September 20, 2008

There have been some interesting and potentially shocking developments in the King Lincoln Bronzeville v. Blackwell lawsuit currently pending in Ohio. Some of these developments we can report to you, some are still off-the-record. Events are happening by the day and almost by the hour, so check back frequently for further information and updates.

We’ve previously covered the King-Lincoln v. Blackwell suit in some detail here, but in brief, some Ohio voters filed a lawsuit about the 2004 election. They want to take the deposition of Mike Connell, a Republican IT “guru” who set up the computers for counting the votes in Ohio.

There has been a stay on the case for some time, and the lead attorney for the plaintiffs, Cliff Arnebeck, has filed a motion requesting a lifting of the stay so that he can depose Mike Connell under oath and ask him about his 20 years of work for the Bush family and for many, many Republican politicians and causes, and specifically his computer/IT work for Ken Blackwell in Ohio 2004.

In his motion to lift the stay, Arnebeck writes [PDF, 6 pages], “The public has a need and right to know, before the next presidential election, that the top Republican IT expert shares a concern about the vulnerability of electronic voting systems to fraudulent manipulation, and that this is not just ‘conspiracy theory.'”

Arnebeck’s reference to Connell sharing “a concern” about electronic voting is based on cyber security expert Stephen Spoonamore’s conversations with Connell. Mr. Spoonamore is serving as an expert witness for the plaintiffs in this case. (In August of this year, we covered a recently-released 2006 interview with Mr. Spoonamore in which he discusses his views on electronic voting and the impossibility of securing an election run on these machines.)

In a supporting affidavit from Mr. Spoonamore (filed along with the motion for relief from stay), Spoonamore writes that Connell “clearly agrees that the electronic voting systems in the US are not secure.” He continues, “Mr. Connell is a devout Catholic. He has admitted to me that in his zeal to ‘save the unborn’ he may have helped others who have compromised elections. He was clearly uncomfortable when I asked directly about Ohio 2004.” [emphasis added]

In addition to Spoonamore’s affidavit, Arnebeck has filed with the court an affidavit from Dr. Richard Hayes Phillips, author of the book Witness to a Crime: A Citizens’ Audit of an American Election. Dr. Phillips writes: “Having personally examined 126,000 ballots, 127 poll books, and 141 voter signature books from 18 counties in Ohio, and having examined many other election records as well, it is my conclusion that there is so much evidence of ballot alteration, ballot substitution, ballot box stuffing, ballot destruction, vote switching, tabulator rigging, and old-fashioned voter suppression, that the results of the 2004 presidential election, in all likelihood, have been reversed.”

Dr. Phillips’ affidavit is a must-read [PDF, 6 pages]. He names names and lists a litany of crimes from the 2004 election that strike at the heart of our nation; crimes that have weakened and damn near destroyed our democratic republic.

If these crimes are allowed to be repeated this November — and we have every reason to believe they *will* be repeated — we truly believe that “the Great Experiment” that is America will be at an end.

A few choice quotes from Dr. Phillips:

This is a nation that prides itself on the rule of law. One of the reasons for punishment of criminals is its deterrent effect not only upon those convicted of the crimes, but also upon those who might contemplate committing similar crimes in the future. Even if the persons who engaged in criminal activity related to the election of November 2, 2004 are no longer in a position to do so, it is vital that their crimes be investigated and that their guilt or innocence be established. Election fraud undermines the very foundation of the United States of America.

Any time I am asked when would be a good time to hold accountable those who were responsible for rigging a presidential election I will give the same answer: Now is the time. And for every day we have failed to do so: That was the time.

As we wrote above, this situation is still developing and there are some very volatile events taking place around this case. Stay tuned to this page, as well as to Velvet Revolution and our colleagues at The BRAD BLOG, for details and information as they happen.

Source / Velvet Revolution Election Protection Strike Force

Thanks to Mariann Wizard / The Rag Blog

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Market Meltdown: Explanation from an Expert

The spittin’ image of a bad bet

The Real Reason for the Global Financial Crisis…the Story No One’s Talking About
By Shah Gilani / September 18, 2008

[Part I of a three-part series looking at how so-called “credit default swap” derivatives could ignite a worldwide capital markets meltdown.]

Are you shell-shocked? Are you wondering what’s really going on in the market? The truth is probably more frightening than even your worst fears. And yet, you won’t hear about it anywhere else because “they” can’t tell you. “They” are the U.S. Federal Reserve and the U.S. Treasury Department, and they can’t tell you what’s really going on because there’s nothing they can do about it, except what they’ve been trying to do – add liquidity.

At the exchange rate yesterday (Wednesday [September 17, 2008]), 35 trillion British Pounds was equivalent to U.S. $62 trillion (hence, the 35 trillion Pound gorilla). According to the International Swaps and Derivatives Association, $62 trillion is the notional value of credit default swaps (CDS) out there, somewhere, in the market.

This isn’t the first time Money Morning has warned readers about the dangers of credit default swaps. And it won’t be the last.

The Genesis of a Derivative Boom

In the mid-1980s, upon arriving in New York from Chicago with an extensive background trading options and futures (the original derivatives), I was offered a job at what was then Citicorp [today’s Citigroup Inc. (C)]. The offer was for an entry-level post in the bank’s brand new OTC (over-the-counter, meaning not exchange traded) swaps and derivatives group. When I asked what the economic purpose of swaps was, the answer came back: “To make money for the bank.”

I declined the position.

It used to be that regulators and legislators demanded theoretical, empirical, and quantitative measures of the efficacy of new tradable instruments being proposed by exchanges. What is their purpose? How will they benefit the capital markets and the economy? And, what safeguards will accompany their introduction?

Not any more. In the early 1990s, in order to hedge their loan risks, J. P. Morgan & Co. [now JPMorgan Chase & Co. (JPM)] bankers devised credit default swaps.

A credit default swap is, essentially, an insurance contract between a protection buyer and a protection seller covering a corporation’s, or sovereign’s (the “referenced entity”), specific bond or loan. A protection buyer pays an upfront amount and yearly premiums to the protection seller to cover any loss on the face amount of the referenced bond or loan. Typically, the insurance is for five years.

Credit default swaps are bilateral contracts, meaning they are private contracts between two parties. CDSs are subject only to the collateral and margin agreed to by contract. They are traded over-the-counter, usually by telephone. They are subject to re-sale to another party willing to enter into another contract. Most frighteningly, credit default swaps are subject to “counterparty risk.”

If the party providing the insurance protection – once it has collected its upfront payment and premiums – doesn’t have the money to pay the insured buyer in the case of a default event affecting the referenced bond or loan (think hedge funds), or if the “insurer” goes bankrupt (Bear Stearns was almost there, and American International Group Inc. (AIG) was almost there) the buyer is not covered – period. The premium payments are gone, as is the insurance against default.

Credit default swaps are not standardized instruments. In fact, they technically aren’t true securities in the classic sense of the word in that they’re not transparent, aren’t traded on any exchange, aren’t subject to present securities laws, and aren’t regulated. They are, however, at risk – all $62 trillion (the best guess by the ISDA) of them.

Fundamentally, this kind of derivative serves a real purpose – as a hedging device. The actual holders, or creditors, of outstanding corporate or sovereign loans and bonds might seek insurance to guarantee that the debts they are owed are repaid. That’s the economic purpose of insurance.

What happened, however, is that risk speculators who wanted exposure to certain asset classes, various bonds and loans, or security pools such as residential and commercial mortgage-backed securities (yes, those same subprime mortgage-backed securities that you’ve been reading about), but didn’t actually own the underlying credits, now had a means by which to speculate on them.

If you think XYZ Corp. is in trouble, and won’t be able to pay back its bondholders, you can speculate by buying, and paying premiums for, credit default swaps on their bonds, which will pay you the full face amount of the bonds if they do actually default. If, on the other hand, you think that XYZ Corp. is doing just fine, and its bonds are as good as gold, you can offer insurance to a fellow speculator, who holds the opinion opposite yours. That means you’d essentially be speculating that the bonds would not default. You’re hoping that you’ll collect, and keep, all the premiums, and never have to pay off on the insurance. It’s pure speculation.

Credit default swaps are not unlike me being able to insure your house, not with you, but with someone else entirely not connected to your house, so that if your house is washed away in the next hurricane I get paid its value. I’m speculating on an event. I’m making a bet.

The bad news is that there are even worse bets out there. There are credit default swaps written on subprime mortgage securities. It’s bad enough that these subprime mortgage pools that banks, investment banks, insurance companies, hedge funds and others bought were over-rated and ended up falling precipitously in value as foreclosures mounted on the underlying mortgages in the pools.

What’s even worse, however, is that speculators sold and bought trillions of dollars of insurance that these pools would, or wouldn’t, default! The sellers of this insurance (AIG is one example) are getting killed as defaults continue to rise with no end in sight.

And this is only where the story begins.

The Ticking Time Bomb

What is happening in both the stock and credit markets is a direct result of what’s playing out in the CDS market. The Fed could not let Bear Stearns enter bankruptcy because – and only because – the trillions of dollars of credit default swaps on its books would be wiped out. All the banks and institutions that had insurance written by Bear would not be able to say that they were insured or hedged anymore and they would have to write-down billions and billions of dollars in losses that they’ve been carrying at higher values because they could say that they were insured for those losses.

The counterparty risk that all Bear’s trading partners were exposed to was so far and wide, and so deep, that if Bear was to enter bankruptcy it would take years to sort out the risk and losses. That was an untenable option.

The Fed had to bail out Bear Stearns.

The same thing has just happened to AIG. Make no mistake about it, there’s nothing wrong with AIG’s insurance subsidiaries – absolutely nothing. In fact, the Fed just made the best trade in its history by bailing AIG out and getting equity, warrants and charging the insurance giant seven points over the benchmark London Interbank Offered Rate (LIBOR) on that $85 billion loan!

What happened to AIG is simple: AIG got greedy. AIG, as of June 30, had written $441 billion worth of swaps on corporate bonds, and worse, mortgage-backed securities. As the value of these insured-referenced entities fell, AIG had massive write-downs and additionally had to post more collateral. And when its ratings were downgraded on Monday evening, the company had to post even more collateral, which it didn’t have.

In short, what happened in one small AIG corporate subsidiary blew apart the largest insurance company in the world.

But there’s more – a lot more. These instruments are causing many of the massive write-downs at banks, investment banks and insurance companies. Knowing what all this means for hedge funds, the credit markets and the stock market is the key to understanding where this might end and how.

The rest of the story will be illuminated in the next two installments. Next up: An examination of the AIG collapse, followed by a look at how bad things could get, and what we can do to fix the problem at hand. So stay tuned.

[Editor’s Note: Contributing Editor R. Shah Gilani has toiled in the trading pits in Chicago, run trading desks in New York, operated as a broker/dealer and managed everything from hedge funds to currency accounts. In his new column, “Inside Wall Street,” Gilani promises to take readers on a journey through the “shadowy back alleys” of the U.S. capital markets – and to conduct us past the “velvet rope” that guards Wall Street’s most-valuable secrets – in an ongoing search for the investment ideas with the biggest profit potential. If the whipsaw markets we’re experiencing lead to the so-called market “Super Crash” that many analysts fear, shrewd investors won’t have to worry.]

Source / Money Morning

Thanks to Diane Stirling-Stevens / The Rag Blog

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