The Rag Blog

If you woke up one morning only to discover that civilization has been on a roaring oil binge and in its catatonic consuming stupor had unceremoniously launched itself into the pit of despair, you’d want to know about that, right? It would be a leading news story on the front page of every prestigious newspaper like the NY Times, Boston Globe, Chicago Tribune, San Francisco Chronicle, LA Times, etc., right? Yet, I couldn’t find a drop of ink that suggests that life as we know it has already ended and real estate on the North Pole will be available soon. But did you see the latest eye-popping candy on the front cover of Victoria’s Secret catalogue suggesting that if we “buy more we save more” printed on paper from a forest near you? No, you didn’t read the print, silly me.

Seriously, “Late summer 2007, an area of Arctic sea ice almost twice the size of Britain disappeared in a single week.” Overall, about 50% of the Arctic ice has thinned out over the last fifty industrial years as a result of fossil fuel driven economies. Last years shrinkage broke the record for ice melt and 2008 is on pace to obliterate that record.

No, let’s be casual, I mean its only a leading climatologist from Washington State University who recently proved that the tipping point has been breached, and, like it or not, the euphemism shop to till you drop, has the drop on an overly distracted civilization. And it’s not like the issue hasn’t been heating up since “Inconvenient Truth” aired world-wide and every other climatologist in the business not employed by Bush has alluded to the fact that carbon emissions trap heat, and well, hot planets melt ice. No ice, no Malibu, inland properties can speculate new coastlines and build piers or set-up post-industrial villas for the likes of Bush, Cheney and the Wall Street gang.

A recent airing of Exploration hosted by Michio Kaku featured world-renown environmentalist Lester Brown, whose recent release, Plan B, 3.0: Mobilizing to Save Civilization, details the folly of a fossil fuel-based industrial economy and its impact on climate, ecosystems, economy, food production, forest, and population. All of which seems rather important, in my view, to the quality of life. Hello Hillary, Hello Obama, Hello McCain? Is anybody home?

Now, if you’re wondering, who’s Lester Brown and why should I trust his data over the governments? Brown is the founder of the Earth Policy Institute in Washington D.C. and the World Watch Institute and has been tracking carbon emissions and global climate patterns for the past thirty years and has the ear, apparently, of most world leaders. Bush, whose personal climatologist exists in the mythical space between his ears, answers only to higher authorities unavailable to common folk.

Brown’s four overriding goals are to “stabilize climate, stabilize population, eradicate poverty, and restore the earth’s damaged ecosystems. Failure to reach any one of these goals will likely mean failure to reach the others as well.” Now there’s a days work. After setting the stage for massive climate change, Brown defines a way out. Albeit, not a family vacation but the notion of living within planetary means has a comforting ring to it. Don’t you think? Let’s consider some of his findings.

27/02/08 “AlterNet” — – They say journalists provide the first draft of history. With the U.S.-led invasion of Afghanistan, that draft led to an almost universal consensus, at least among Americans, that the attack was a justifiable act of self-defense. The Afghanistan action is commonly viewed as a “clean” conflict as well — a war prosecuted with minimal loss of life, and one that didn’t bring the kind of international opprobrium onto the United States that the invasion of Iraq would lead to a year later.

Those views are also held by many Americans who are critical of the excesses of the Bush administration’s “War on Terror.” But there’s a disconnect there. Everything that followed — secret detentions, torture, the invasion of Iraq, the assault on domestic dissent — flowed inevitably from the failure to challenge Bush’s claim that an act of terror required a military response. The United States has a rich history of abandoning its purported liberal values during times of war, and it was our acceptance of Bush’s war narrative that led to the abuses that have shattered America’s moral standing before the world.

In his book, The Guantánamo Files, historian and journalist Andy Worthington offers a much-needed corrective to the draft of the Afghanistan conflict that most Americans saw on their nightly newscasts. Worthington is the first to detail the histories of all 774 prisoners who have passed through the Bush administration’s “legal black hole” at Guantánamo Bay, Cuba. But his history starts in Afghanistan, and makes it abundantly clear that the road to Guantánamo — not to mention Abu Ghraib — began in places like Kandahar.

AlterNet recently asked Worthington what that road looked like at its point of origin.

Joshua Holland: I think most Americans believe that we went into Afghanistan to rout anti-American or anti-Western “jihadi,” but your book captures the fact that the U.S. entered on one side of a long-standing civil war that had nothing to do with any sort of “clash of civilizations” between East and West. Can you give us some sense of what that conflict was about?

Andy Worthington: Sure, it’s a very good question, actually. Briefly, the roots of the conflict lie in the Afghan resistance to the Soviet invasion in the 1980s, when the United States, via Pakistani intermediaries, and the Saudis vied to fund the mujahideen — Afghan warlords and their soldiers, backed up by a rather smaller number of Arab recruits.

At the end of the 1980s, when the Soviet Union withdrew, the country was plunged into a civil war, as the various warlords, pumped up with billions of dollars of U.S. and Saudi aid, fought each other to gain control of the country. Tens of thousands of civilians died, and crime and human rights abuses were rife.

Largely in response to this lawlessness, the Taliban — initially a group of ultraorthodox religious students from the south of the country — rose up to cleanse the country by creating a pure Islamic state. Their project, too, was soon derailed by brutality and by a religious fundamentalism that shocked the West, but it was the struggle between the Taliban and the warlords of the Northern Alliance that attracted thousands of foreign foot soldiers to Afghanistan in the 1990s, summoned by fatwas issued by radical sheikhs in their homelands, which required them to help the Taliban in their struggle against the Northern Alliance.

Osama Bin Laden, who had been living in Saudi Arabia and Sudan in the post-Soviet period, returned to Afghanistan in 1996 and became involved in funding military training camps and building up his plans for a global, anti-American jihad, but — although there was some overlap between Al Qaeda and parts of the Taliban leadership — the vast majority of the recruits, as I’ve indicated, were involved not in a grand “clash of civilizations” but in a provincial inter-Muslim civil war.

Holland: That’s an important point. There’s a common belief that a seamless integration existed between the Taliban and Bin Laden’s group, and that integration justified our attacking Afghanistan, a nation-state, in “self-defense.” But in reality, the Taliban was busy fighting this inter-Muslim civil war and had little or no role in Al Qaeda. Let’s go a bit further: just how much overlap was there?

Worthington: According to a senior intelligence official interviewed by the journalist David Rose in 2004, the overlap was very small. Rose was told, “In 1996 it was nonexistent, and by 2001, no more than 50 people.” Now this official was referring to an overlap of fairly high-level people in both organizations, and certain commentators have pointed out that Al Qaeda’s “Arab Brigade” of around 500 soldiers contributed to the Taliban’s military strength, but, to return to what we discussed before, this was in the context of an inter-Muslim civil war, and not a war against the United States.

There were certainly major divisions within the Taliban leadership regarding Bin Laden, and even Mullah Omar, the Taliban leader, was apparently unimpressed by Bin Laden in the years after his return to Afghanistan. In 1998, Omar had even been planning to betray Bin Laden to the Saudis, but when Al Qaeda attacked the U.S. embassies in Kenya and Tanzania, and the U.S. retaliated by launching cruise missile attacks on training camps in Afghanistan, Omar drew closer to Bin laden. Even so, the Taliban offered to hand over Bin laden after 9/11 if proof was offered of his involvement in the 9/11 attacks.

Holland: They were so close in 1998 — the deal had been done, and two jets carrying Saudi Prince Turki and a group of Saudi commandos had actually landed in Afghanistan and were waiting to pick up Bin Laden when the deal soured.

Worthington: That’s right. And another clear sign of the lies involved in the “seamless integration” you refer to happened on Oct. 7, 2001, the first night of “Operation Enduring Freedom,” when the U.S. military announced that it had bombed 23 Al Qaeda training camps. As I mention in the book, of the dozens of training camps established in Afghanistan from the 1980s onwards, most were funded by Pakistan and wealthy donors in the Gulf countries. Some were run by Afghan warlords, others by Pakistani groups and others by militant groups from other countries. Although bin Laden had a few camps of his own, it was inappropriate to describe all the training camps in Afghanistan as “Al Qaeda camps.”

Holland: OK, let me go back briefly to an earlier point. Supporters of Bush’s global network of “black” prisons say that those who ended up in them were “unlawful combatants.” And you said that a lot of people from around the Muslim world were drawn to serve as foot soldiers in Afghanistan’s civil war, but in the book, you also make it clear that many were not even foot soldiers — not combatants at all — but religious students, aid workers and other adventurous young people, and many of them would later get caught up in the chaos that followed the invasion and ended up at Gitmo.

Worthington: Yes, that’s right. I’d say that between 70 and 100 of the foreign — non-Afghan — detainees had traveled to Afghanistan to provide humanitarian aid to the Afghan people, to teach or study the Koran, as economic migrants, or even because they were curious about the “pure Islamic state” that, in some quarters, the Taliban was alleged to have established. A similar number were captured in Pakistan. Charity workers were captured near the border, where they had traveled to provide assistance at refugee camps, and others — including missionaries, entrepreneurs, economic migrants, refugees and students — were actually captured elsewhere in Pakistan, in towns and cities far from the “battlefields” of Afghanistan.

On February 13, Imad Moughniyeh, a senior commander of Hizbollah, was assassinated in Damascus. “The world is a better place without this man in it,” State Department spokesperson Sean McCormack said: “one way or the other he was brought to justice.” Director of National Intelligence Mike McConnell added that Moughniyeh has been “responsible for more deaths of Americans and Israelis than any other terrorist with the exception of Osama bin Laden.”

Joy was unconstrained in Israel too, as “one of the U.S. and Israel’s most wanted men” was brought to justice, the London Financial Times reported. Under the heading, “A militant wanted the world over,” an accompanying story reported that he was “superseded on the most-wanted list by Osama bin Laden” after 9/11 and so ranked only second among “the most wanted militants in the world.”

The terminology is accurate enough, according to the rules of Anglo-American discourse, which defines “the world” as the political class in Washington and London (and whoever happens to agree with them on specific matters). It is common, for example, to read that “the world” fully supported George Bush when he ordered the bombing of Afghanistan. That may be true of “the world,” but hardly of the world, as revealed in an international Gallup Poll after the bombing was announced. Global support was slight. In Latin America, which has some experience with U.S. behavior, support ranged from 2% in Mexico to 16% in Panama, and that support was conditional upon the culprits being identified (they still weren’t eight months later, the FBI reported), and civilian targets being spared (they were attacked at once). There was an overwhelming preference in the world for diplomatic/judicial measures, rejected out of hand by “the world.”

Following the Terror Trail

In the present case, if “the world” were extended to the world, we might find some other candidates for the honor of most hated arch-criminal. It is instructive to ask why this might be true.

The Financial Times reports that most of the charges against Moughniyeh are unsubstantiated, but “one of the very few times when his involvement can be ascertained with certainty [is in] the hijacking of a TWA plane in 1985 in which a U.S. Navy diver was killed.” This was one of two terrorist atrocities the led a poll of newspaper editors to select terrorism in the Middle East as the top story of 1985; the other was the hijacking of the passenger liner Achille Lauro, in which a crippled American, Leon Klinghoffer, was brutally murdered,. That reflects the judgment of “the world.” It may be that the world saw matters somewhat differently.

The Achille Lauro hijacking was a retaliation for the bombing of Tunis ordered a week earlier by Israeli Prime Minister Shimon Peres. His air force killed 75 Tunisians and Palestinians with smart bombs that tore them to shreds, among other atrocities, as vividly reported from the scene by the prominent Israeli journalist Amnon Kapeliouk. Washington cooperated by failing to warn its ally Tunisia that the bombers were on the way, though the Sixth Fleet and U.S. intelligence could not have been unaware of the impending attack. Secretary of State George Shultz informed Israeli Foreign Minister Yitzhak Shamir that Washington “had considerable sympathy for the Israeli action,” which he termed “a legitimate response” to “terrorist attacks,” to general approbation. A few days later, the UN Security Council unanimously denounced the bombing as an “act of armed aggression” (with the U.S. abstaining). “Aggression” is, of course, a far more serious crime than international terrorism. But giving the United States and Israel the benefit of the doubt, let us keep to the lesser charge against their leadership.

A few days after, Peres went to Washington to consult with the leading international terrorist of the day, Ronald Reagan, who denounced “the evil scourge of terrorism,” again with general acclaim by “the world.”

The “terrorist attacks” that Shultz and Peres offered as the pretext for the bombing of Tunis were the killings of three Israelis in Larnaca, Cyprus. The killers, as Israel conceded, had nothing to do with Tunis, though they might have had Syrian connections. Tunis was a preferable target, however. It was defenseless, unlike Damascus. And there was an extra pleasure: more exiled Palestinians could be killed there.

The Larnaca killings, in turn, were regarded as retaliation by the perpetrators: They were a response to regular Israeli hijackings in international waters in which many victims were killed — and many more kidnapped and sent to prisons in Israel, commonly to be held without charge for long periods. The most notorious of these has been the secret prison/torture chamber Facility 1391. A good deal can be learned about it from the Israeli and foreign press. Such regular Israeli crimes are, of course, known to editors of the national press in the U.S., and occasionally receive some casual mention.

Klinghoffer’s murder was properly viewed with horror, and is very famous. It was the topic of an acclaimed opera and a made-for-TV movie, as well as much shocked commentary deploring the savagery of Palestinians — “two-headed beasts” (Prime Minister Menachem Begin), “drugged roaches scurrying around in a bottle” (Chief of Staff Raful Eitan), “like grasshoppers compared to us,” whose heads should be “smashed against the boulders and walls” (Prime Minister Yitzhak Shamir). Or more commonly just “Araboushim,” the slang counterpart of “kike” or “nigger.”

Thus, after a particularly depraved display of settler-military terror and purposeful humiliation in the West Bank town of Halhul in December 1982, which disgusted even Israeli hawks, the well-known military/political analyst Yoram Peri wrote in dismay that one “task of the army today [is] to demolish the rights of innocent people just because they are Araboushim living in territories that God promised to us,” a task that became far more urgent, and was carried out with far more brutality, when the Araboushim began to “raise their heads” a few years later.

They’re a very frail people and I was surprised it had taken that long for one of ‘em to die in our custody. —Pfc. Damien Corsetti, Military Intelligence, Bagram

If the FBI had felt that there was a case to answer for, they wouldn’t have taken me into Bagram where I was held, heard the sounds of a woman screaming next door, had me hogtied and threatened to send me to Egypt in order to get me to sign this. —Moazzam Begg, Now 2006 July 28

25/02/08 ” PopMatters” — — In December 2002, a 22-year-old Afghan taxi driver named Dilawar was picked up and delivered to the Bagram Air Force Base prison. Five days later, he was dead. Sgt. Thomas Curtis, one of the Military Police at Bagram, remembers, “There was definitely a sense of concern because he was the second one. You wonder, was it something we did?”

As detailed in Alex Gibney’s devastating documentary, Taxi to the Dark Side, Dilawar’s demise was officially termed a homicide, like the first detainee to die at Bagram, Habibullah. Captured by a warlord and handed over to the U.S. just days before Dilawar, Habibullah as deemed “an important prisoner,” hooded, shackled, and isolated, periodically beaten for “noncompliance.” Autopsies showed that Dilawar and Habibullah suffered similar abuses, including deep bruises all over their bodies; according to the Army coroner, Dilawar suffered “massive tissue damage to his legs… his legs had been pulpified.” And yet, despite initial concerns among the guards and interrogators at Bagram over an investigation, instead, the officer in charge of interrogation at the prison, Captain Carolyn Wood, was awarded a Bronze Star for Valor and, following the Iraq invasion in 2003, she and her unit were sent to Abu Ghraib.

Methodically, relentlessly, Gibney’s Oscar-nominated film assembles stories, evidence, and testimony from witnesses and experts (its deliberate structure recalls that of Charles Ferguson’s No End in Sight, both films suggesting that, if the Bush Administration had not already put in place legal protections, more than one member might be subject to criminal charges). The many decisions and oversights that produced the “enhanced interrogation techniques” that would be used at Abu Ghraib, Guantánamo, and other sites have several points of departure, each chilling in its own way. Not least among these is the pronouncement by Dick Cheney that motivates Taxi‘s title, made during an appearance on Meet the Press during the week after 9/11. Describing imminent changes in interrogation policies, the vice president asserted,

We have to work sort of the dark side, if you will, spend time in the shadows in the intelligence world. A lot of what needs to be done here will have to be done quietly, without any discussion, using sources and methods available to our intelligence agencies, if we’re going to be successful. That’s the world these folks operate in. It’ll be vital for us to use any means at our disposal, basically, to achieve our objective.

26/02/08 “Counterpunch” — – A psychiatrist who has treated former military personnel at Guantánamo prison camp is telling a story of prisoner torture and guard suicide there, recounted to him by a National Guardsman who worked at Guantánamo just after it opened.

Dr. John R. Smith, 75, is a Oklahoma City psychiatrist who has done worked at military posts during the past few years. He is also a consultant for the University of Oklahoma’s Department of Psychiatry and Behavioral Services, and is affiliated with the Veteran’s Affairs Administration Hospital in Oklahoma City. The court-appointed psychiatric examination of Timothy McVeigh, who bombed the Murrah Federal Building in 1995, was conducted by Smith. A few years ago, he became a contract physician, treating active duty members of the US military in need of psychotherapy.

Smith spoke on February 22, 2008, at the annual meeting of the American Academy of Forensic Sciences, held in Washington DC. His presentation dealt with the psychological impact on guards of working at Guantánamo . He focused on a chilling case history, of a patient he called “Mr. H.”
.
Smith described Mr. H as a blue-collar Latino in his 40s who had done routine service in the National Guard for years before being called up to Kuwait. Then, shortly after 9/11, he was diverted from Kuwait to Guantánamo . The detention camp had just opened. Mr. H was deployed there to work as a guard.

Untrained for the job, Mr. H was taken aback by the detainees. They threw feces and urine on him, said Smith, and tried to get him to sneak letters out, telling him that if he didn’t, “they would see to it that his family suffered the consequences.” The prisoners also mocked Mr. H, that his being in the military made him “a traitor” to Latinos and other minorities. Mr. H was confused and terrified.

Meanwhile, according to Smith, “this good Catholic man with a family who had pretty much always followed the rules” was called on to participate in torture. One of his jobs was “to take detainees to certain places and see that they were handcuffed in difficult positions, usually naked, in anticipation of interrogation.” Mr. H often watched the questioning. He saw prisoners pushed until they fell down, then cut. They responded to the torture with “defecation, vomiting, urinating,” and “psychotic reactions: bizarre screaming and crying.”

Smith noted that Mr. H said he was “required to handcuff and push to the ground detainees who were naked.” The prisoners were also made to “remain on sharp stones on their knees.” Detainees, Mr. H told Smith, would try to avoid interrogation by rubbing their knees until they bled in order be taken to the prison hospital.

According to Smith, Mr. H’s comment about these events “was poignant and simple: ‘It was wrong what we did.'” While still at Guantánamo , he responded to being a participant in torture “with guilt, crying and tears. But of course it was forbidden to talk with anyone about what he was experiencing.” He “became more and more depressed.” Apparently, so did other military personnel. Smith said Mr. H told him that in the first month he was at Guantánamo , two guards committed suicide.

Smith said that by the time he saw Mr. H, he “had become very ill. He was suicidal, terribly depressed, anxious,” and “riddled with insomnia and horrible dreams and flashbacks.” He had already seen two military therapists and not improved. But those therapists “were active duty and he didn’t dare tell them” what had happened at Guantánamo . Smith was not active duty, and after two or three sessions Mr. H opened up. With medication and psychotherapy, he became less suicidal but was still too sick to do any more military service.

Three years later after treating Mr. H, Smith got three new patients who were guards at Guantánamo on later tours. They said conditions were much improved –“they loved it at Guantánamo and went swimming in the Caribbean.” Still, one guard was having problems directly related to his work there. He “described having to cut down a detainee” who tried to hang himself after chewing through an artery in his own arm. There was blood everywhere. When the guard left Guantánamo , he was suffering from “anxiety attacks, panic attacks.”

Smith said his presentation at the American Academy of Forensic Sciences meeting was the first time he’d ever spoken publicly about his Guantánamo patients. He decided to talk, he said, because he is concerned that veterans are generally ineligible for PTSD (post-traumatic stress disorder) disability benefits if the condition is not caused by combat. He considers the guards of Guantánamo “an overlooked group of victims.” But in making that case, Smith stepped into a unique role. Heretofore, almost all accounts of torture at Guantánamo have come from non-governmental human rights groups or detainees and their defense lawyers. The FBI accounts in 2004 were contradictory. Smith, a prestigious physician, relayed accounts from inside the military.

VICTORIA — The government of British Columbia moved yesterday to the forefront of the battle against climate change by introducing what may be the greenest budget ever seen in North America.

Finance Minister Carole Taylor said the budget – which has a new, sweeping carbon tax as its centrepiece – is a historic turning point for the province, although critics pointed out it also contains incentives for oil and gas development and funding for new highways.

“It has been a dramatic turn, I think, for this province with this budget to say we’re not just going to be talking about climate action. We are acting. We are putting in place the financial foundation that will make it possible,” Ms. Taylor said in a budget briefing session as she focused on the carbon-tax initiative.

She said the strategy is to “tax something that we know is bad for us,” and use the revenue to stimulate wide social change by providing incentives for people and businesses to become more energy efficient.

Wearing an impeccable green suit, Ms. Taylor said the B.C. government aims to raise $1.8-billion over the next three years by applying a carbon tax to virtually all fossil fuels, including gasoline, diesel, natural gas, coal, propane and home-heating fuel.

She said the carbon tax will be revenue neutral because all of the money raised will be returned to businesses and individuals through an annual “climate action credit,” which will provide lower-income British Columbians with a payment of $100 per adult and $30 per child, and through a range of tax cuts.

Ministry officials said they have not been able to find a carbon-tax scheme of similar scope anywhere else in North America and they doubted few jurisdictions globally could surpass it for its broad reach.

“This is an important turning point for British Columbia and we think for Canada because we are out in front on this. We don’t want to wait until we get a consensus. We think it is important to take the first steps,” Ms. Taylor said.

She said her business-friendly government is striving for a balanced approach as it tries to make progress on the environmental front without hurting the economy.

“It is an interesting challenge to say that we are going to take dramatic action on the climate-change problems that the world is facing, but at the same time insist that we are going to work to strengthen our economy,” she said.

The carbon tax, which takes effect on July 1, will be phased in starting at a rate based on $10 per tonne for carbon emissions, rising to $30 per tonne by 2012.

The price of gasoline will increase by 2.41 cents a litre this year, rising to 7.24 cents a litre by 2012. The cost for diesel and home-heating oil will increase 2.76 cents a litre this year, increasing to 8.27 cents a litre in five years.

Ms. Taylor said that over the next three years the carbon tax should reduce carbon emissions by three million tonnes.

B.C.’s goal is to reduce carbon emissions by 33 per cent below 2007 levels by 2020 – a target that clearly won’t be met by the carbon tax alone.

Ms. Taylor said the carbon tax is “just one piece of the puzzle” and more initiatives, including a cap and trade system expected this fall, will be needed.

She said it will be up to future governments to decide whether the carbon tax should rise above the $30-per-tonne rate.

Asked why B.C. wasn’t waiting for a federal plan to emerge, Ms. Taylor said the province has set “very aggressive” carbon-emission targets, and simply couldn’t wait to act.

“It is our decision as a province that we must start now,” she said.
Ian Bruce, climate-change specialist with the David Suzuki Foundation, described the carbon tax as “a landmark decision” that puts B.C. in a leadership role in North America.

“The government is using the most powerful tool it has at its disposal to reduce greenhouse-gas emissions,” he said.

“Global warming is a big problem and it requires big solutions. So there is going to be more that we need to do into the future. But today I think the government showed some real leadership,” Mr. Bruce said.

Chloe O’Loughlin, of Canadian Parks and Wilderness Society, and Gwen Barlee, of Western Canada Wilderness Committee, praised the carbon-tax initiative, but said the budget fails to recognize that climate change is already having, and will continue to have, an impact on the environment.

“I think the government has done a very good job on fighting carbon emissions, but there’s nothing on the other leg of climate change, which is adaptation. There’s nothing in the budget to protect biodiversity,” Ms. O’Loughlin said.

“This isn’t necessarily a green budget – it’s a greenhouse-gas budget,” Ms. Barlee said.

Will Horter of the Dogwood Initiative said the budget contains some serious contradictions in that it provides subsidies for oil and gas exploration, and supports highway and pipeline building, while trying to reduce carbon emissions.

Ten environmental groups issued a budget report card that gave the government three A’s – for carbon pricing, spending on transit, and incentives for citizens and businesses to become more energy efficient. But the government got an F for consistency, because it increases oil and gas subsidies, and a D for failing to protect biodiversity.

John Winter of the B.C. Chamber of Commerce said the carbon tax may be easier on those in urban environments than those in rural areas who have limited transportation options.

And he said it will be hard on some “high-intensity energy users,” such as some mines.

“But generally speaking it’s good. We were prepared to be aggressively negative … so I think we find ourselves surprisingly encouraged by the balance of the budget,” Mr. Winter said.

Maureen Bader, B.C. director of the Canadian Taxpayers Federation, was critical of the budget.

25/02/08 “ICH” — – “The SEC probe of the securitization of subprime mortgages into collateralized debt obligations (CDOs), announced last summer, has yielded no official enforcement cases….SEC chief, Christopher Cox, along with other top-level administration officials, has cautioned against quick-fire regulatory or enforcement responses to the worsening credit crisis, noting that the market instead should be left to work it out.” Nicholas Rummel, “SEC Drift Said to Prevent Action on Credit Crunch”, Financial Week

That’s right. The biggest economic scandal in the last half century, the subprime fiasco, and the “business friendly” stooges at the SEC are still sitting on their hands reciting passages from Milton Friedman instead of dragging crooked banksters off to the hoosegow in leg-irons. Go figure? SEC Chairman, Christopher Cox, has come under withering attack from Senator Christopher Dodd who chairs the Banking Committee and who accuses the SEC of being “asleep at the switch”.

Dodd said the SEC “needs to help restore investor confidence in the markets by more vigorous enforcement, by more comprehensive regulation of credit rating agencies, and increased accountability and transparency of publicly traded companies.” (Financial Week)

“Accountability…transparency” in Bushworld? Nice try, Dodd, but its a losing cause. The Bush administration is not just philosophically opposed to oversight; they’ve handed over the entire financial system to a cabal of banking scalawags who’ve turned it into their personal fiefdom. This same cast of fraudsters engineered the subprime swindle and ripped off trillions of dollars from investors around the world. And, don’t kid yourself; Bush is proud of the damage he’s done by taking a wrecking ball the SEC. For him, it’s like a good day at the races. He has no intention of reigning in the crooks or restoring the publics’ confidence.

New York Governor Elliot Spitzer has joined Dodd in criticizing the so-called “regulatory agencies” for failing to determine whether any securities laws were broken. In a Washington Post article, Spitzer blasted the SEC’s inaction saying that the Bush Administration would be judged by history as a “willing accomplice” to the subprime collapse.

But Spitzer and Dodd are wasting their breath. The culture of corruption from 7 years of Bush misrule has spread like Kudzu to every jag and eddy in Washington. If we were really a nation of laws rather than nincompoops, federal agents would be busy rounding up every investment banker and hedge fund sharpie on Wall Street so they could get to the bottom of the subprime boondoggle. Regulators still haven’t even decided whether it was a case of overzealous marketing of dodgy securities or downright fraud. That should be “job one” for the SEC.

The reason all this talk about “regulation” is so important now is that the same banking giants who cooked up the subprime scam have just presented the Bush administration with a $739 billion bailout package they plan to unload on the American taxpayer. According to Sunday’s New York Times:

“As losses from bad mortgages and mortgage-backed securities climb past $200 billion, talk among banking executives for an epic government rescue plan is suddenly coming into fashion. A confidential proposal that Bank of America circulated to members of Congress this month provides a stunning glimpse of how quickly the industry has reversed its laissez-faire disdain for second-guessing by the government — now that it is in trouble. The proposal warns that up to $739 billion in mortgages are at “moderate to high risk” of defaulting over the next five years and that millions of families could lose their homes. To prevent that, Bank of America suggested creating a Federal Homeowner Preservation Corporation that would buy up billions of dollars in troubled mortgages at a deep discount, forgive debt above the current market value of the homes and use federal loan guarantees to refinance the borrowers at lower rates.”

What Bank of America is proposing is that the US government guarantee the shoddy mortgages that the banks issued to “unemployed shoe-clerks with bad credit” so they could peddle them as Triple A “securities” to unsuspecting investors. Now that subprimes are blowing up at a record pace, the banks need a government bailout before their balance sheets are reduced to cinders.

But what does the poor taxpayer get out of the deal besides soaring inflation, bulging fiscal deficits, and the “warm and fuzzy” feeling that he’s helped some tasseled-shoed charlatan keep his larder in the Hamptons full of Dom Perignon and crab cakes?

The reason we’re in this mess is because financial innovation and deregulation have driven the markets off a cliff. And that started with the bankers. Financial innovation has nothing to do with the efficient deployment of capital for productive activity. No way. In fact, it is the exact opposite. The financial innovations of the last decade have primarily focused on transforming the liabilities of dubious mortgage applicants into complex debt-instruments which are enhanced with massive amounts of leverage and exotically-named derivatives. The investments banks and brokerage houses fought hard to establish the present system which they call “structured finance”. They spent over $100,000 million lobbying congress to remove the legislative firewall which kept investment and commercial banks separate. Those laws, particularly Glass Steagall, made sure that the public was protected from the Ponzi-scams which proliferated just prior to the Great Depression. But, now, 30 years later, the same scams are back with a vengeance. The cult of free market orthodoxy and Reagan-era flim-flam has put us on track for another stock market crash ala 1929. That’s why Bank of America and their buddies in the industry have turned to the administration for a way out. Their flagging balance sheets can’t take another year of rising foreclosures and dwindling assets. They need Big Brother to cover their debts and rebuild their capital-base. Otherwise its curtains.

Other versions of the so-called “Rescue Bill” have been floating around Washington for the last three weeks, but they all follow the same basic guidelines. Under one of the plans, 600,000 subprime mortgage-holders, many of whom are already delinquent on their payments or in some stage of foreclosure, would be able to refinance their loans under the Federal Housing Authority (FHA) which would federally guarantee the mortgage in the event of default.

Great idea, eh? So, now the taxpayer is going to have to pay for the people who lied on their applications (and who really can’t afford the homes they’re in) so the banks can recoup their losses. This plan doesn’t make sense.

Why on earth would the taxpayer want to buy 600,000 subprime mortgages at “current value” when housing prices are falling, inventory is soaring, sales are sagging, foreclosures are at historic highs, and millions of homeowners are expected to simply “walkaway” from their loans?

No thanks. Let the banks go under. They created this mess. Besides, all we’re doing is rewarding the people who deliberately destroyed the system. They can fend for themselves. The first order of business should be to restore public confidence; not bail out crooks. “Credibility” matters in a market-based system; especially one that relies so heavily on the hocus-pocus of fractional banking. When trust is lost; the system crashes. End of story. That means it’s time to clean house at the SEC. Give everyone a pink slip, two weeks pay and send them home. Then scour the countryside like Diogenes for a few honest men.

Second, people in positions of authority have to be held accountable for their crimes. Millions of investors have lost their life savings or retirement in the subprime/securitzation debacle. Someone’s got to go to jail. Apologies just don’t cut it. So far, not one CEO has been led off to the Paddy-wagon in handcuffs. It has all been swept under the rug by an administration that has filled every regulatory position in Washington with industry lobbyists, business-friendly tycoons and corporate “yes-men”. The results are just what any sane person would expect; disaster. The financial markets are completely unsupervised; the SEC is just a subsidiary of the multi-national corporations. It has no teeth. If it was really independent; then Cox and his goons would be storming the investment banks with tasers and truncheons. Instead, he spends most his time explaining why he won’t enforce the laws and prosecute cases.

And there should be no doubt about who is really responsible for the subprime woes. The investment banks employ some of the country’s “best and brightest”. These are sharp guys who have studied at some of our finest colleges and universities. Does anyone really believe that a Harvard MBA—who understands all the fine-points of high-finance–really thought that ignoring all of the standard criteria for prudent lending, and issuing trillions of dollars in loans to applicants who had no job, no collateral, bad credit, and were unable to come up with a few thousand dollars for a down-payment—was a great idea?

Of course not. It was a swindle from the get-go. The reason the banks looked the other way and issued these shaky mortgages was because they didn’t really think there was any risk involved. After all, it wasn’t their money. They simply repackaged the loans into bonds and sold them off to someone else. No worries. But, does that make them any less guilty?

Consider this: If the banks didn’t know that the mortgages were bogus, than why are all the various types of mortgages; including Alt-As, piggybacks, home equity loans, ARMs, prime, and “interest only”—defaulting at the same time? It is not just subprime mortgages that are failing; it runs the gamut.

The reason is obvious; it’s because the banks were making windfall profits and didn’t want to rock the boat. They knew they were peddling garbage. How could they not know? The banker’s primary task in life is to figure out who can pay him back “with interest”. And they’re pretty good at it, too. So why did they start handing out hundreds of billions of dollars to anyone who could fog a mirror? In fact, it got so out-of-hand that (according to The New York State Commission of Investigation) “a homeless woman earning $10 an hour was recently approved for a $470,000 adjustable rate mortgage”. In a similar incident, two Hispanic migrant workers in Bakersfield, California, who made roughly $45,000 in combined income, were approved for a mortgage on a home valued at $725,000.

These aren’t innocent mistakes. They’re part of a broader pattern to fudge the paperwork so unqualified “high-risk” loan applicants would look like J. Paul Getty and secure a mortgage. That way, the banks could continue to rake in lavish origination fees and maximize their profits.

But then the plan hit a rough patch and the Gravy-train tipped over into the ditch. When the credit storm hit the markets in August, the mortgage securitization went into deep freeze and the easy money from Wall Street dried up. The banks got stuck holding billions of their own bad paper. Now every foreclosure eats into their capital so, they’ve turned to the government for a handout. Of course, they don’t want the public to know what’s really going on so they’ve asked the Bush administration to help them pull the wool over everyone’s eyes. According to the New York Times one banking official summed it up like this:

“We believe that any intervention by the federal government will be acceptable only if it is not perceived as a bailout of the bond market.”

Really? So, on top of everything else, the banks want the Bush administration to organize a public relations campaign that will make the multi-billion bailout look like it was designed to help struggling homeowners instead of crafty bankers. Unbelievable. No doubt Team Bush will do whatever they can to help out.

Bank of America’s proposed $739 billion bailout is just the first of many hyper-inflationary, economy-busting trial-balloons we can expect to see in the near future. The banking system is in terminal distress; collapsing from hundreds of billions in worthless assets, bad bets, and poor decision-making. Their capital impairment problems were all brought on by themselves. And they should be forced to pay the consequences, whatever that may be. They managed to take a simple, revenue-generating activity like mortgage lending, and turn it into a textbook case of grand larceny. It’s pathetic.