The Rag Blog

16/02/08 “ICH” — – Even veteran Fed-watchers were caught off-guard by Chairman Bernanke’s performance before the Senate Banking Committee on Thursday. Bernanke was expected to make routine comments on the state of the economy but, instead, delivered a 45 minute sermon detailing the afflictions of the foundering financial system. The Senate chamber was stone-silent throughout. The gravity of the situation is finally beginning to sink in.

For the most part, the pedantic Bernanke looked uneasy; alternately biting his lower lip or staring ahead blankly like a man who just watched his poodle get run over by a Mack truck. As it turns out, Bernanke has plenty to worry about, too. Consumer confidence has dropped to levels not seen since the 1970s recession, real estate has gone off a cliff, credit-brushfires are breaking out everywhere, and the stock market continues to gyrate erratically. No wonder the Fed-chief looked more like a deck-hand on the Lusitania than the monetary-czar of the most powerful country on earth.

Bernanke’s prepared remarks were delivered with the solemnity of a priest performing Vespers. But he was clear, unlike his predecessor, Greenspan, who loved speaking in hieroglyphics.

Bernanke: “As you know, financial markets in the United States and in a number of other industrialized countries have been under considerable strain since late last summer. Heightened investor concerns about the credit quality of mortgages, especially subprime mortgages with adjustable interest rates, triggered the financial turmoil. However, other factors, including a broader retrenchment in the willingness of investors to bear risk, difficulties in valuing complex or illiquid financial products, uncertainties about the exposures of major financial institutions to credit losses, and concerns about the weaker outlook for the economy, have also roiled the financial markets in recent months.”

Yes, of course. The banks are ailing from their subprime investments while Europe is sinking fast from $500 billion in unsellable asset-backed garbage. The whole system is clogged with crappy paper and deteriorating collateral. Now there are problems popping up in auction rate sales and the normally-safe municipal bonds. The whole financial Tower of Babel is cracking at the foundation.

Bernanke continues: “Money center banks and other large financial institutions have come under significant pressure to take onto their own balance sheets the assets of some of the off-balance-sheet investment vehicles that they had sponsored. Bank balance sheets have swollen further as a consequence of the sharp reduction in investor willingness to buy securitized credits, which has forced banks to retain a substantially higher share of previously committed and new loans in their own portfolios. Banks have also reported large losses, reflecting marked declines in the market prices of mortgages and other assets that they hold. Recently, deterioration in the financial condition of some bond insurers has led some commercial and investment banks to take further markdowns and has added to strains in the financial markets.”

Bernanke sounds more like an Old Testament prophet reading passages from the Book of Revelations than a Central Banker. But what he says is true; even without the hair-shirt. The humongous losses at the investment banks have forced them to go trolling for capital in Asia and the Middle East just to stay afloat. And, when they succeed, they’re forced to pay excessively high rates of interest. The true cost of capital is skyrocketing. That’s why the banks are protecting their liquidity and cutting back on new loans. Most of the banks have also tightened lending standards which is slowing down the issuance of credit and threatens to push the economy into a deep recession. When banks cramp-up; the overall economy shrinks. It’s just that simple; no credit, no growth. Credit is the lubricant that keeps the capitalist locomotive chugging-along. When it dwindles, the system screeches to a halt.

“DOWNSIDE RISKS TO GROWTH HAVE INCREASED”

Bernanke again: “In part as the result of the developments in financial markets, the outlook for the economy has worsened in recent months, and the downside risks to growth have increased. To date, the largest economic effects of the financial turmoil appear to have been on the housing market, which, as you know, has deteriorated significantly over the past two years or so. The virtual shutdown of the subprime mortgage market and a widening of spreads on jumbo mortgage loans have further reduced the demand for housing, while foreclosures are adding to the already-elevated inventory of unsold homes. Further cuts in homebuilding and in related activities are likely…..Conditions in the labor market have also softened. Payroll employment, after increasing about 95,000 per month on average in the fourth quarter, declined by an estimated 17,000 jobs in January. Employment in the construction and manufacturing sectors has continued to fall, while the pace of job gains in the services industries has slowed. The softer labor market, together with factors including higher energy prices, lower equity prices, and declining home values, seem likely to weigh on consumer spending in the near term.”

So, let’s summarize. The banks are battered by their massive subprime liabilities. Housing is in the tank. Manufacturing is down. Food and energy are up. Unemployment is rising. And consumer spending has shriveled to the size of an acorn. All that’s missing is a trumpet blast and the arrival of the Four Horseman.

How is it that Bernanke’s economic post-mortem never made its way into the major media? Is there some reason the real state of the economy is being concealed from ‘we the people’?

Bernanke continues: “On the inflation front, a key development over the past year has been the steep run-up in the price of oil. Last year, food prices also increased exceptionally rapidly by recent standards, and the foreign exchange value of the dollar weakened. …(If) inflation expectations to become unmoored or for the Fed’s inflation-fighting credibility to be eroded could greatly complicate the task of sustaining price stability and reduce the central bank’s policy flexibility to counter shortfalls in growth in the future.”

Right. So, if the Fed’s rate-cutting strategy doesn’t work and the economic troubles persist (and prices continue to go through the roof) then we’re S.O.L. (sh** out of luck) because the Fed has no more arrows in its quiver. It’s rate cuts or death. Great. So, we can expect Bernanke to hack away at rates until they’re down to 1% or lower (duplicating the downturn in Japan) hoping that the economy shows some sign of life before it takes two full wheelbarrows of greenbacks to buy a quart of milk and a few seed-potatoes.

Sounds like a plan!

We don’t blame Bernanke. He’s been remarkably straightforward from the very beginning and deserves credit. He’s simply left with the thankless task of mopping up the ocean of red ink left behind by Greenspan. It’s not his fault. He should be applauded for dispelling the decades-long illusion that a nation can borrow its way to prosperity or that chronic indebtedness is the same as real wealth. It’s not; and the bill has finally come due.

Of course, now that the low-interest speculative orgy is over; there’s bound to be a painful unwind of hyper-inflated assets, falling home prices, tumbling stock markets, increased unemployment, and a generalized credit-contraction throughout the real economy. Ouch. Who said it was going to be easy?

Bernanke’s summation:

“At present, my baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of monetary and fiscal stimulus begin to be felt….It is important to recognize that downside risks to growth remain, including the possibilities that the housing market or the labor market may deteriorate to an extent beyond that currently anticipated, or that credit conditions may tighten substantially further.”

(Editor’s translation) “Discount everything I’ve said here today if the economy blows up — as I fully-expect it will — from decades of regulatory neglect and the myriad multi-trillion dollar Ponzi-schemes which have put the entire financial system at risk of a major heart attack”.

Bernanke’s candor is admirable, but it is little relief for the people who will have to soldier-on through the hard times ahead. Perhaps, next time he could spare us all the lengthy oratory and just forward a brief cablegram to Congress saying something like this:

“We are deeply sorry, but we have totally fu**ed up your economy with our monetary hanky-panky. You are all in very deep Doo-doo. Prepare for the worst.”

Last week, the Court of Appeal ruled that Lotfi Raissi could claim compensation for his arrest and imprisonment after being wrongly accused of training 9/11 pilots. Here, in his first interview since the landmark decision, he tells of his prison hell, nervous collapse and the terrible toll his ordeal has had on his personal and professional life

17/02/08 “The Observer” — – Lotfi Raissi seemed destined to become one of the most reviled men in history. A pilot who had trained in the US before moving to England, he was the first person to be accused in connection with the 11 September attacks. He was alleged to be one of its chief ringleaders, teaching the 9/11 terrorists how to fly and crash planes into buildings. It’s hard to think of a more damaging accusation. Harder still when Raissi, whose chubby face and small, smiling eyes makes him seem younger than his 33 years, was wholly innocent.

But this did not stop him spending almost five months in Belmarsh high-security prison in south-east London after the American authorities told their British counterparts of Raissi’s ‘involvement’ in the worst terrorist attack in US history. ‘It was appalling,’ Raissi said yesterday as he tried to live a normal family life, meeting his brother for a family lunch followed by watching the Manchester United-Arsenal FA Cup tie. ‘I was guilty until I proved my innocence.’

Last week, three judges at the Court of Appeal ruled he should be allowed to renew his bid for compensation from the government, overturning a decision by the High Court last year. ‘I had faith in the judiciary system,’ Raissi said. ‘Thank God justice is what I got.’

However, it is clear that his wounds are still open. He says he is suffering from post-traumatic stress disorder and his general health is not good. He has been seeing a doctor for the past two weeks because of high blood pressure. ‘I haven’t slept properly for the past seven years,’ he said.

To understand how damaging the accusations were against Raissi, it is necessary to understand his background. ‘My family back home in Algeria have been fighting terrorism for the past 15 years,’ he said. ‘My uncle is chief of an anti-terrorist branch. We abhor terrorism in any shape or form in our family. This is very damaging for us.’

The reference to ‘us’ is a telling one. Raissi is angry not for what happened to him but because of the shame it brought on his family. Their dignity, he says, has been taken away.

He recalls the day he was arrested by British police: 21 September 2001. He was dragged out of his house naked at three o’clock in the morning. There was banging, shouting, swarms of police. His wife, Sonia, and his brother, Mohammed, were also arrested but released four days later.

‘It was a kidnapping; they could have just sent me some questions and I would have been glad to answer all the questions at a police station,’ he said. ‘I didn’t even have the chance to read the warrant. There were guns everywhere.’

But his nightmare was only just beginning. He was taken to Paddington Green high security police station, which is used to house terrorist suspects. There was evidence – a great deal of evidence, the authorities implied – that would prove his guilt.

‘It was very confusing,’ Raissi said with a gentle understatement that is characteristic of how he views the tortuous events of the past six years. ‘They were saying I was involved in 9/11; they were blaming me for everything to do with 9/11. They said, “You prepared those hijackers”. I love football, I love dancing, I love going out – my life is so different from those who flew the planes. I just didn’t understand what they were talking about.’

It didn’t take long before the ‘evidence’ – false claims that he was linked to five of the hijackers – to drip through into the media. Even before he was arrested, journalists had mysteriously turned up outside his door asking questions.

From Paddington Green he was moved to Belmarsh, his nadir. The notorious London prison is used to house some of the most dangerous criminals in Britain. Raissi, with his gentle manners and humble persona, did not stand much of a chance in the febrile atmosphere that followed 9/11. Society wanted vengeance. The feeling permeated through the prison’s walls.

‘I feared for my life in court and inside prison,’ he said. ‘They moved me from the high security unit after three or four days and sent me to the normal wing, where I wasn’t safe. I suffered racism and discrimination. I got stabbed twice by other prisoners and no one investigated.’

Why was he stabbed? ‘Everyone had become a judge and a jury,’ he says with the sort of resignation which suggests he knows he will never be reconciled with what happened behind the prison walls. The psychological pressures of being accused of one of the most reviled crimes in history soon took their toll: ‘I had two nervous breakdowns. One in prison, one when I came out. My brother has been suffering, too.’

In bringing his claim for compensation, Raissi argues that he was arrested chiefly because he was Algerian, Muslim and Arab, an airline pilot – someone who effectively ticked the boxes of an identikit terrorist.

‘I was arrested because of my profile,’ he said. ‘Why didn’t they arrest the instructors who actually trained the terrorists?’

The Court of Appeal’s judgment on Raissi’s arrest, and the refusal to grant him bail, was damning. ‘Viewed objectively, it appears to us to be likely that the extradition proceedings were used for an ulterior purpose, namely to secure the appellant’s detention in custody in order to allow time for the US authorities to provide evidence of a terrorist offence,’ the three judges hearing his case concluded.

But the judges were most scathing about the role of the British authorities. ‘We consider that there is a considerable body of evidence to suggest that the police and the CPS [Crown Prosecution Service] were responsible for serious defaults.’ It is difficult to imagine a more damning assessment.

The ruling also shone an uncomfortable spotlight on the way Britain and the United States trade intelligence and raised troubling questions about the two countries’ relationship when it comes to fighting terrorism. Why did Britain listen to the US? Why was it so eager to arrest Raissi, when even the American authorities had urged Britain only to make ‘discreet’ inquiries into his background.

The justification for Raissi’s arrest was at best spurious, even accepting – as the Court of Appeal did last week – that the weeks following 9/ 11 were turbulent ones.

Even the US, it seems, soon realised that Raissi was unlikely to be the man they were looking for. A couple of months after he was arrested, intelligence sources told the Washington Post that ‘we put him in the category of maybe or maybe not, leaning towards probably not. Our goal is to get him back here and talk to him to find out more.’ Raissi was still held for almost three further months after this statement was made.

What triggered the Americans’ original interest in him is equally bewildering. He had spent a period at a flight school in Phoenix, Arizona and when his student visa had expired he returned to Algeria before moving to London.

Travel records appeared to show that in June 2001 he was in Las Vegas when Ziad Jarrah – one of the hijackers of Flight 93, the plane that crashed after passengers stormed the cockpit – was also in the gambling city.

It was suggested that the FBI had discovered Raissi’s name in a rental vehicle hired by Salem al Hazmi, one of the five terrorists who hijacked Flight 77 which crashed into the Pentagon. It was also claimed that a video existed of Raissi celebrating with Hani Hanjour, another of the Flight 77 hijackers. Telephone records apparently corroborated claims he had called four of the hijackers.

But none of the claims was true and the US authorities and the CPS were unable to produce any evidence to back up their allegations.

‘It was media propaganda,’ Raissi said. ‘They said I was in a videotape with one of the hijackers that flew the aeroplane. The reality was the person in the video was my cousin and doesn’t have anything to do with terrorism.’

Ultimately, American officials were forced to make a provisional request for his extradition on the grounds that he had lied on his pilot’s licence by not revealing he had undergone knee surgery, an allegation that in itself was later proved false.

In April 2003 Raissi was formally released on all charges. Six months later he announced he was suing the FBI and the US Department of Justice for $10m for ruining his life. He was forced to drop the civil action after a recent change in the law barred individuals from suing sovereign states.

But it is the British, rather than the US authorities, who Raissi really wants to pursue through the courts. ‘Where is the sovereignty of the UK government? They have to come up with evidence. There was no evidence. They didn’t provide anything to the judge. That’s why there was no case to answer – it was a serious default by the police and the CPS. I’m shocked.’

His claim for compensation against the UK government was dismissed in the High Court last year. But he was determined to continue his legal fight, not for money, he says, but to clear his name.

‘People talk about the compensation. It’s nothing to do with it. I lost my life, I lost my career. There was a stage when I lost my dignity – that is unacceptable when we live in the civilised world. It’s a matter of principle. I want my life back; I want to clear my name and that of my family and to have a normal life.

‘I was 27 when I got arrested, now I’m 33. I was going in and out of court for seven years fighting this case – I didn’t have a life. If they don’t give me an apology it will be the same fight over the next three or four years.’

Home Secretary Jacqui Smith has 14 days to decide whether she will fight Raissi’s case to go for compensation. ‘The government should fix this problem,’ he said, his voice rising slightly to express his bewilderment at the idea the authorities could countenance such an idea. ‘I am completely exonerated. The only thing I expect is a widely publicised apology. If they appeal the decision it will be a sham. They will be wasting taxpayers’ money.’

Raissi is not the only one to have suffered as a result of his ordeal. His wife lost her job at Air France. His brother’s wife lost her job at Heathrow, too. The strain has damaged his relationship with his wife. ‘Even with my marriage I struggle very much. Every part of my life I struggled with. It is an agony.’

Today, Raissi relies on the financial support of friends and family to get by. Initially when he came out of prison and had no work he refused all benefits. ‘I’m not working, I’m blacklisted from all airline jobs. I’m framed as a terrorist.’

Even now, despite being completely exonerated, he is banned from flying anywhere but Algeria because his American extradition warrant is still outstanding.

‘We hope Raissi’s complete exoneration will mean the US authorities will withdraw the warrant as a matter of urgency,’ said Jules Carey, his lawyer from Tuckers solicitors.

Carey also wants to see urgent action from the British authorities. ‘Last week’s judgment should not only cause the Home Secretary to review the use of

provisional extradition warrants but also prompt the police and the Crown Prosecution Service to overhaul their systems to avoid miscarriage of justice in the future,’ Carey said.

Given everything he has been through, it would seem natural if Raissi had become a bitter man, consumed with enmity towards those who locked him away without any credible evidence. But the truth is more complicated, even cathartic.

‘I learnt to forgive, I learnt patience,’ he said. ‘But it has been damaging to my life and my dignity – that is something I will never forgive.’

During the six years he fought to clear his name, he would be approached by strangers at the coffee shop near his home in Chiswick, west London.

‘They had heard about my case and would come up and say to me: “Hopefully this miscarriage of justice will be overturned.” I am very grateful for their support. My life in London is something I cherish very much. I love England.’ By way of emphasising his anglicisation he adds with evident pride: ‘I’m a big fan of Man United.’

But then Raissi says something else, something that should serve as much as a warning as an observation. ‘I always say Britain is a civilised country with beautiful people. I really cherish the customs, the way of life here. But after 9/11 things changed.’

Innocent Men

2 June 2006 Police arrested 23-year-old Mohammed Abdul Kahar and 20-year-old Abul Koyair after raiding their home in Forest Gate, east London. Mr Kahar was shot in the shoulder during the raid. Both were later released without charge. On the brothers’ request the police issued an apology for the hurt they had caused, but insisted that, based on intelligence received, they had ‘no choice but to mount a robust operation, which required a fast armed response’.

26 July 2007 Five students, Irfan Raja, Awaab Iqbal, Aitzaz Zafar, Akbar Butt and Usman Malik, were jailed for downloading and sharing extremist literature. The convictions were quashed in the Court of Appeal last week, with the judge concluding there was no proof of terrorist intent.

21 January 2008 Six Pakistani men were arrested at Gatwick on suspicion of terrorist activity. They were later released after it emerged that they were all relatives or supporters of Chaudhry Shujat Hussain, a Musharraf lieutenant. A statement was swiftly released, apologising for the incident and ‘any personal distress that was caused to the individuals concerned’.

17/02/08 “ICH” — — Do not be fooled! Barak Obama’s call for National Infrastructure Reinvestment Bank (NIRB) does not signal the return of the Democratic Party to the values of FDR and a revival of the Constitutional prerogative to ‘promote the general welfare’, but would rather provide more welfare for Wall Street and worse. Obama’s plan is nothing more than the direct means of instituting the Rohatyn-Rudman National Investment Corporation (NIC) plan called for in 2005, which in essence is a revival of Mussolini’s methods of corporatist control of the state in a politically correct post modern fashion..

When Senator Obama states that his National Investment Reinvestment Bank will magically turn $60 billion into trillions of dollars as he did in his Feb 13th Jamesville, WI speech, one can easily realize that the only way that this can happen is through the perverse magic of Wall Street. What would happen is that bonds floated by the NIRB will be bought on the open market, to then be speculated upon, securitized as derivatives, traded and ultimately used as collateral on the newly built infrastructure. What we will see is the emergence of an infrastructure bubble to replace the mortgage bubble, propped up by initial government expenditures towards infrastructure. This is just the start as Obama will fund the feel good ‘carbon credit’ swap to be the next blast of hot air to make Wall Street giddy. This is a key insight to a true understanding of what is going on. Bailout the financial powers with a clever plan that will raise money to then buy up hard assets, in other words the remaining wealth of our nation, as the meltdown crisis of over a quadrillion in derivatives losses grows and grows..

Besides artificially propping up the markets, Obama’s NIRB, as an initiation of the Rohatyn/Rudman infrastructure investment model, opens the door to the privatization of public assets. International predators and asset-strippers want to buy up public highways and impose cutthroat tolls, as they are already doing in many states. Then they run the turnpikes into the ground as cash cows while they mercilessly bilk the users. Privatization is a key goal of the Anglo-American financiers behind this scheme. Both the NIC and NIRB rely on the new darling of the markets, PPPs, known as public private partnerships. PPPs are the means by which market forces will dictate, and that is the word, the implementation of these projects. The argument is that the PPP will keep costs down, but in reality only because the private corporations, now controlling the public sector, will own the assets of what is being constructed. The PPP model is none other than the model implemented by Mussolini in his fascist corporate state. The creation of NIRB funds hark back to Hjalmar Schact’s ‘MEFO’ bills that created the speculative bubble of money so that the National Socialists could rearm Germany and fight World War II..

Since 9/11 America has certainly turned into a top-down police state, but true post-modern fascism requires a popular movement to usher it into power. Bush has created a dictatorship out of the Presidency, now the next step towards fascism is being marketed to exploit the desire for change. The depressed national mood, due to the war and economic recession/depression has compromised sane reasoning and courageous opposition needed now more than ever. This has created the conditions for a newcomer to magically appear with a message of hope, using the mantra ‘Change’, wrapped in a swooning fever that has infected the young and left liberal excuse machines, such as ‘Move On’ who were never serious about stopping Bush/ Cheney and the war.

Since he passed his audition at the Democratic convention in 2004, Senator Obama has been taken over by George Soros and other hedge fund millionaires to launch a campaign out of nowhere, based on nothing but rhetoric and Wall Street millions. As darling of the rich elitist Kennedy/Kerry/Dean wing of the Democratic Party, Obama’s pseudo-Camelot will deliver Wall Street and the Anglo-American financiers the goods while disguised in a patina of racial teflon and faux populism from the upper crust. For substance ask, where is the bill in the Senate by Kennedy/Kerry/Obama calling for a freeze on all foreclosures? Where’s their filibuster against the war? Where is a real minimumn wage in the form of a living wage? Where is impeachment of Bush-Cheney? Why did Senator Obama move against raising heating oil assistance to the poor in the recent spending bill?

The answer to this last question, besides Rohatyn, is Obama’s top economics controller, Austan Goolsbee, a sinister Skull & Bones, Friedmanite Chicago School free trade/free market economist who has delivered the real answer to the question of the difference between Senator Obama and Senator Clinton. Goolsbee stated on CNBC that Obama is more market friendly ­ more in the pocket of Wall Street. This is precisely the establishment’s secret fear of Hillary Clinton that she might act as her heroine Eleanor Roosevelt, to implement a post modern New Deal that would oppose austerity measures against programs that help the poor. That she would fund essential public services, like hospitals and schools, and provide universal health care available to all. The greatest fear is that she might act like FDR to now start regulating the markets starting with a 1% Tobin tax which could eliminate the income tax burden for everyone earning less than $125,000 year with plenty of money to fund the basic social programs of a civilized and truly decent society.

Now Obama, with economic advisers such as David Cutler, who believes that rising health care prices are good for the economy, and Jeffrey Liebman, who wants to partially privatize social security, you see that Obama’s MBAs will be quite good at implementing the vision of the Democratic godfather Felix Rohatyn (ex-Lazard Freres) and Republican Warren Rudman, an proponent of savage austerity and the wrecking of entitlements.. Their obsession with balanced budgets, privatization, and asset stripping will be given new cover as the United States is dissolved into one great corporatist PPP.

Yes, we do need infrastructure, but the reason we have an infrastructure crisis is because people like Rudman and Rohatyn have influenced thinking against infrastructure projects because it would get in the way of their balanced budget mania and plans to loot the economy. Now they have a new solution and salesman. Watch out!

Remember it was Rudman who was a key figure in the conservative revolution around Gingrich. The nefarious interest of Rohatyn is even more sinister considering that this is the fellow who was part of the international team supporting fascist dictator Augusto Pinochet, where Rohatyn’s social security privatization scheme was first tried. Soon a limited revised version of social security privatization will be introduced by Obama when an alarm is pulled by Wall Street during a Obama Presidency. In the 1970’s Rohatyn became the actual dictator of New York City under Big Mac (the 1975 Municipal Assistance Corporation), trumping the city government, as a financial czar who cared more about the city’s bond rating than lives, cutting essential services, including many inner-city hospitals in a mad example of a PPP. Rohatyn, who is also recognized as the money bags behind the pro-Obama Democratic Leadership Council, is also a big proponent of military privatization which is another step towards feudal fascism. No wonder the Democrats have not stopped the war; it is good for their business arrangements too.

While Senator Obama says that he will stop the war and use that money to initially finance the NIRB and his green initiatives, this will do nothing to stop the speculative forces that are causing the present hyperinflationary bubble. Will Obama stand up to the speculators whose gambling is responsible for up to 40% of the price of every gallon of gasoline? Not likely.

Sure the NIRB will create some low-wage jobs, but the PPP arrangement will make certain that organized labor does not get assertive about living wages and benefits, all the while private companies welcome a work force of illegal immigrants who will do much of the work for virtual slave wages as is already the case.

17/02/08 “Antiwar” — — The recent spectacle of Congressional hearings on the alleged use of steroids and/or Human Growth Hormone (HGH) by Roger Clemons, a professional baseball player nicknamed “the Rocket,” throws into question the viability and functionality of a Congress controlled by the Democratic Party. The House Government Reform Committee, chaired by Representative Henry Waxman (D-California), carried out its own made-for-television version of Court TV, grilling the All Star pitcher and his former trainer over their contradictory statements as to whether or not Clemons actually was injected with a banned performance enhancing substance. While this hearing was underway, thousands of miles away, in Iraq , American service members continued the ugly business of occupying Iraq . That Waxman would abuse his position by pursuing such trivia while Americans continued to fight and die in a war built exclusively on a framework of lies is disturbing.

True, Henry Waxman has chaired numerous hearings, and issued even more statements, which have resulted in several embarrassing questions being asked by the Government Reform Committee of a recalcitrant White House. But none of Henry Waxman’s efforts have produced the high drama of the Clemons hearings, where every word was wrestled with, every context explored. Forensic data was introduced. Reputations were (and are) on the line. The consequences are potentially grave: perjury charges could be brought forward against Clemons and others. What was the source of this commotion? Simply put, a few syringes and a game. Baseball might be the national pastime, perhaps, but it remains a game nonetheless. War is all-too real, and the war in Iraq has cost nearly 4,000 Americans their lives, while wounding tens of thousands more, while killing and wounding hundreds of thousands of Iraqis.

At the same time Henry Waxman’s committee was grilling the Cy Young award-winning pitcher, the House Foreign Affairs Committee was holding hearings of its own, on the issue of Iraq. Another Democrat, Representative Robert Wexler (D-Florida), raised the matter of findings from a report issued by the Center for Public Integrity, issued last month, that document some 935 allegations of false statements made by the Bush administration in the lead up to the 2003 invasion of Iraq. Of particular interest to Wexler were 56 of those allegedly false statements attributed to the witness seated before the committee, Secretary of State Condoleezza Rice, who had served as the National Security Advisor in the period of time when the alleged false statements were made.

To his credit, Representative Wexler pressed home his point, namely that Condi Rice had lied when she helped make the case for war against Iraq by selectively citing certain intelligence information while suppressing others. Secretary Rice, of course, denied any wrongdoing, leaving America with a curt point-counterpoint exchange which served little purpose when it comes to the matter of the search for truth and accountability through oversight. When Roger Clemons denied the charges leveled at him, the robust overseers of Congressional Constitutional mandate who populate the Government Reform Committee subjected him to a withering round of cross-examination full of recrimination and doubt. Following Wexler’s brief moment of inquiry, Condi Rice was let off without further reproach.

Clearly there are discrepancies between the charges leveled by Wexler and the responses offered by Rice. That the compendium of alleged false statements comes from an independent, non-governmental entity (the Center for Public Integrity) should not serve as a roadblock to further investigation and hearings into the matter: the Government Reform Committee was acting in response to an independent investigation, the Mitchell Report, authorized not by Congress, but rather the Commissioner of Baseball. Unlike the Mitchell Report, however, the matter of Bush administration prevarication concerning the false case made for war in Iraq delves not into the lives of private citizens, where the consequences get no bigger than inflated sports statistics, but rather the words and actions of elected officials which influenced public opinion and the will of Congress in a manner which has cost hundreds of billions of dollars and several thousand American lives.

Congress shouldn’t have to wait for a private organization like the Center for Public Integrity to do its job for it. The misrepresentation of fact, fabrication of falsehoods, and outright lies the Center for Public Integrity documents are all a matter of public record, most of which were derived from statements made before Congress itself.

That Congress puts the so-called integrity of a game ahead of its own Constitutional mandate of oversight of legitimate governance is a travesty. That this travesty is carried out in the face of a pledge by a Democratic-controlled Congress to effectively and responsibly carry out its duty to investigate how and why our nation went to war with Iraq is not only incomprehensible, but reprehensible.

Perhaps if Saddam Hussein had been accused of injecting HGH instead of hiding WMD, Congress would have stepped up to the plate, so to speak, and dug deep into the truth of the matter. Henry Waxman, as well meaning as he is, sits at the head of a legislative process which has lost touch with reality and purpose. Pandering to the no-risk approach of non-governance by pursuing “The Rocket” and allegations of HGH abuse, while ignoring the high-risk demands of legitimate government by pursuing matters pertaining to how the Bush administration manufactured evidence of illusory Iraqi rockets tipped with imagined WMD, represents the ultimate indictment of a Congress, and legislative process, that long ago lost touch with its ultimate purpose of being: the pursuit of the best interests of the American people through the defense of the rule of law as set forth by the United States Constitution.

As we know well in this country, elections are a time for reflection. They are a time to consider who we are as a nation and what we want to become. Sometimes it is appropriate to stop and think about how lucky we are to have the freedom to make these kinds of choices. We should also think about the fact that there is no guarantee these freedoms will remain forever.

Take Pakistan, for example. Having endured a U.S.-backed military coup, martial law, and the assassination of their most visible opposition leader, Pakistanis will head to the polls on Monday to select members of their National Assembly in elections already plagued by widespread allegations of illegitimacy. Observers across the political spectrum have noted persisting restrictions on the press, politicized election administration at both the local and federal level, and the conspicuous lack of an independent judiciary to resolve electoral disputes.

Sadly, the United States is doing very little to help the situation in Pakistan and may well be making it worse. The Bush administration has consistently pressed for these elections to proceed despite security concerns and various allegations of unfairness. Not surprisingly, from an administration installed by a controversial Supreme Court ruling, its view appears to be that elections confer legitimacy on whichever regime emerges victorious, regardless of complaints about how the votes were tallied.

Even worse, these electoral similarities are only the tip of an iceberg reflecting deep connections between the agenda of the Bush administration and the Musharraf regime. While criticism has abounded of Musharraf’s various abuses of the rule of law, observers have generally overlooked the means Musharraf has taken to squelch dissent of his administration, and how they resemble some of the tactics Americans have seen domestically. As one prominent anchor of a major Pakistani television news program suggested when discussing the threats to democracy in his country, “Musharraf’s playbook is the same as the Bush administration’s.”

This is especially disturbing to me, as I have written recently about how the Bush administration seems to be following the playbook of twentieth century leaders, such as Stalin and Mussolini, who shut down democracies in their own countries. It is painful to think that the Bush administration is filling a similar role, making the United States of America an example for would-be tyrants.

At a broad level, both Bush and Musharraf have consistently magnified real threats to security in their public communications in order to promote fear and intimidate political opponents. In America, fear of another catastrophic attack in the wake of 9/11 was used to justify the round-ups of material witnesses, domestic spying and the PATRIOT Act. Meanwhile, in Pakistan, the threat of armed fundamentalists was cited as the reason to sack the Supreme Court and restrict the press.

In carrying out this governance by fear, both administrations have claimed that domestic checks on their agendas have given comfort to the enemy, effectively (if not literally) saying that “You’re either with us, or against us.” Nor have these accusations been confined to civil society.

Musharraf has framed Pakistan’s former Supreme Court — which he sacked with U.S. support in November for the second time last year — as having interfered in his counter-terrorism efforts. Similarly, in addition to accusing opponents of the War in Iraq of undermining “our troops,” officials in the Bush administration have derogated other branches of the federal government in order to aggrandize the executive branch. For instance, the White House has refused to provide Congress with documents necessary to understand the legal basis of the administration’s torture policy, and when faced by challenges brought by detainees, sought to evade the jurisdiction of appellate courts such as the U.S. Court of Appeals for the Fourth Circuit, from which a prominent conservative judge resigned in alleged protest.

The detainee cases are especially poignant. Both Musharraf and Bush have assaulted civil liberties, arguing against habeas corpus rights for detainees and resisting judicial efforts to ensure impartial trials. Student activists from Balochistan were imprisoned and even “disappeared” by Pakistani agents, while hundreds of detainees were imprisoned without trials for years at Guantanamo Bay. Recently, the Bush administration announced that six of these detainees would be tried in military court for their alleged involvement in 9/11, despite the fact that much of the evidence to be used against them was obtained as the result of torture and abuse.

While Musharraf’s attack on judicial independence took the form of sacking the Supreme Court, removing the majority of its justices and jailing several of them, Bush has also compromised judicial independence, though in a more subtle fashion. When vacancies emerged on the U.S. Supreme Court, Bush nominated a pair of Justices whose principal qualification was prior service in the Reagan-era Department of Justice, where they championed aggressive theories aggrandizing executive power. Chief Justice Roberts even violated ethical rules by interviewing with the White House for his Supreme Court appointment at the same as he sat in judgment on White House detainee policy in the Hamdan case, in which he cast a deciding vote for the administration — before the Supreme Court later reversed the decision.

Both Bush and Musharraf have largely ignored the real security threats they use to promote fear. Bush started a war in Afghanistan only to then grow distracted by an Iraq conflict whose only relation to terrorism was to encourage more of it. Musharraf has ignored his regime’s ongoing support for militants despite the threat they pose to his own government, instead spending U.S. money on high-tech force structure (such as F-16s) for a hypothetical war with India.

Both presidents practice belligerence in their foreign policy decisions. Musharraf launched a war in the Himalayas before seizing power in 1999, for which he derived massive public support. The invasion of Iraq was similarly used by the Bush administration to rally support behind its other agendas.

And, perhaps most significantly, both Presidents have taken strong measures to intimidate the press. Musharraf removed entire channels from the air, while banning certain personalities from appearing and censoring what little content remained. Those journalists who challenge the media blackout — at least in Urdu-language outlets most watched by Pakistanis — are subject to intimidation and personal threats. In the U.S., journalists who have exposed state secrets (such as the domestic spying program revealed by The New York Times) have been threatened with prosecution.

President Bush once promised that his administration would spread freedom around the world. Instead, he is apparently teaching other world leaders how to promote fear and diminish freedoms in order to assume and maintain power. He has nothing to share, but fear itself.

Shahid Buttar is a civil rights lawyer, hip-hop MC, grassroots community organizer, and independent journalist. His commentary has appeared in various print and broadcast outlets, including The Washington Post; The New York Times; Bloomberg; Hannity & Colmes on FOX News; The Laura Flanders Show on Air America; TomPaine.com; Alternet; Common Dreams; and Democracy Now! on NPR, which named one of his public addresses among “The Best of 2004.”

Naomi Wolf is the author of The New York Times bestseller “The End of America” (Chelsea Green) and is the co-founder of the American Freedom Campaign.

If you can’t give me your word of honor, will you give me your promise? – Samuel Goldwyn, The Great Goldwyn

The man can’t keep his word even though the words are always the same. Having mouthed them so often you’d think he could remember them. What’s surprising now is that the forgotten beneficiaries of his words are the people he sent to Iraq to get killed or wounded who now wish to be remembered by the man who sent them there to gratify his own ego. They shouldn’t be surprised. They should have learned from Katrina.

Mr. Bush visited New Orleans shortly after Katrina had paid its respects. Standing in the Rose Garden on September 3 of that sad year, Mr. Bush said: “I know that those of you who have been hit hard by Katrina are suffering. . . The tasks before us are enormous, but so is the heart of America. In America, we do not abandon our fellow citizens in their hour of need. And the federal government will do its part . . . . We have a responsibility to our brothers and sisters all along the Gulf Coast and we will not rest until we get this right and the job is done.” Mr. Bush is well rested. Anyone reading about New Orleans knows he didn’t get it right and the job isn’t done. Those living in New Orleans suffered because of nature’s tragedy and were forgotten by the man who promised them help. Now it’s the veterans’ turn.

In his recent State of the Union message, Mr. Bush received great applause when he said: “Our military families also sacrifice for America. . . . We have a responsibility to provide for them. So I ask you to join me in expanding their access to child care. . . and allowing our troops to transfer their unused education benefits to their spouses or children. Our military families serve our nation, they inspire our nation, and tonight our nation honors them.” One week later he submitted his 2009 budget and dissed the veterans. No funds were included for transferring education benefits.

In submitting his $1.3 trillion budget he forgot to include the benefit that would cost between $1 and $2 billion dollars. That was not the end of ignoring the needs of veterans. According to a release from the Brain Injury Association of America in a press release commenting on the budget, for the third year in a row, Mr. Bush has proposed the complete elimination of the Federal traumatic Brain Injury Program. The program “provides grants to state agencies and [other organizations] to improve access to health and other services for individuals with traumatic brain injury and their families.” Susan Connors, president and CEO of the Brain Injury Association of America described the omission as “deeply disappointing” and went on to say that “President Bush just doesn’t get it.” Those two examples are not the only ones in which veterans who have withstood the onslaught from the enemy in Iraq have to defend themselves from the onslaught of the wolf in the White House parading in sheep’s clothing.

According to a report on National Public Radio, during a visit by representatives of the Army Surgeon General’s staff at Fort Drum Army base, officials from the Department of Veterans’ Affairs were told they should stop helping injured soldiers complete paperwork related to their injuries. The forms completed forms determine what level of care and disability benefits the soldiers receive.

Rep. John McHugh who represents the area that includes Ft. Drum, the military base at which the instructions were given, responded that: “The Surgeon General of the Army told me very flatly that it was not the Army that told the VA to stop this help.” That would have been the end of the matter but for one thing. A summary of the meeting prepared by one of the attendees surfaced and it contradicted the Surgeon General who had contradicted NPR.

Kevin Esslinger, a legal administration specialist at Ft. Drum , prepared the memorandum. It says that Col. Becky Baker of the office of the Surgeon General said the “Veterans Benefits Administration should discontinue counseling Medical Evaluation Board (MED) soldiers on the appropriateness of the Department of Defense MEB/OEB (Physical evaluation board) ratings and findings. There exists a conflict of interest.” Responding to that comment Mr. Esslinger wrote in his summary that “a recent Department of the Army Inspector General inspection had noted the practice and had found it to be a useful service to the soldier.” He went on to say the practice would be discontinued.

NPR’s requests for interviews with Col. Baker and Surgeon General Eric Schoomaker were turned down. It is hard to understand why. But here is something that is not hard to understand-why Mr. Bush’s 2009 budget proposed a reduction in the budget for the Corporation for Public Broadcasting from $400 million to $200 million.

Long notorious for its checkered history of voter suppression, Waller County, Texas’s degree of racial division approaches the level of myth.

In Waller County, for example, a person calling a funeral parlor is asked: what color is the body? There are black and white funeral homes, says Christina Sanders, who directs the Black Youth Vote! effort in Texas, and the two don’t ever mix.

With the Texas primary approaching, tensions flared again this month over one of the county’s sorest racial issues–the color of the vote.

For decades, Waller County has repressed the vote of the local historically black college, Prairie View A&M. In 1979, the Supreme Court stepped in to intercede, upholding A&M students’ right to vote where they declare residency. Yet since then, the county has gone so far as to indict A&M students that vote, and in the 2004 case of one attorney general, even threaten such students with jail and $10,000 in fines.

But this election cycle, when the county eliminated the temporary early voting location adjacent to A&M, students rebelled. The county’s only other early voting site was over 7 miles away from campus in the town of Hempstead–with no bus route connecting the two. And at a time when youth turnout is at record highs, says Sanders, A&M students were outraged. “This being a historically black university, and a presidential election when we’re hearing things that we can relate to–I just [couldn’t] believe it,” Sanders said.

On Jan. 25, the Lawyers Committee on Civil Rights sent a letter to the Department of Justice calling the move “motivated, at least in part, by a discriminatory purpose.”

Students won their victory this week when, under pressure from the Department of Justice, election commissioners convened an emergency meeting to re-establish A&M’s early polling site.

When on Jan. 22 a federal court judge sentenced Jose Padilla to 17 years in prison for conspiracy to commit terrorism, it was a one-day story. But, in fact, the Padilla case goes on.

Padilla, a U.S. citizen and former Chicago gang member, alleges that he was tortured during the more than three and a half years he spent behind bars at a Navy brig in South Carolina. He is now suing John Yoo, the former Justice Department lawyer who reportedly devised the legal theories to justify the interrogation techniques used against him.

While Padilla’s suit raises a number of constitutional claims—including that the military violated his rights to counsel and to exercise his Muslim religion—the heart of his argument is that Yoo gave legal advice to justify his torture, in violation of due process of law as guaranteed by the Fifth Amendment to the Constitution.

Padilla, who is separately appealing his recent conviction, asks the court to rule that his treatment violated the Constitution, and to order Yoo, now a law professor at the University of California at Berkeley, to pay him $1 in damages.

The suit raises important questions of law and fact. Are lawyers liable for giving bad legal advice to federal officials?

In August 2002, Yoo, then an attorney in the Justice Department’s Office of Legal Counsel, wrote a formal opinion letter advising that interrogation techniques are not torture unless they inflict pain equivalent to “organ failure, impairment of bodily function or even death.” The new head of the Office of Legal Counsel, Jack Goldsmith, later withdrew Yoo’s opinion.

Goldsmith, now a Harvard law professor, explains in his book, The Terror Presidency, that Yoo’s reasoning was “legally flawed” and “tendentious.” It seemed “more an exercise of sheer power than reasoned analysis.” Even so, was it the proximate cause of any mistreatment of Padilla?

However such questions are resolved, Padilla’s allegations of his treatment, if true, ought to shame a civilized society.

‘Measurably abnormal’

Padilla charges he was imprisoned in a seven-foot by nine-foot cell in the Navy brig in Charleston, S.C., for nearly four years. For the first 21 months, he says he was denied all contact with anyone outside the brig, including family and lawyers, leaving him with interrogators and guards as his only human contact.

He alleges he was allowed no watch or clock, nor any news about the outside world. The only window in his cell was blacked out. When he was allowed out of his cell, his eyes and ears were covered.

Periodically, he says, he was subjected to absolute light or darkness for periods in excess of 24 hours. He was subjected to extreme temperature variations in his cell, where his bed consisted of a cold steel slab with no mattress, pillow or blanket. He says brig guards and others deliberately banged on his walls and bars at all hours of the night. For hours at a time, he says guards kept him shackled and manacled, or forced him to sit or stand in uncomfortable and painful positions.

Worse, his interrogators allegedly threatened to cut him with a knife and pour alcohol in the wounds. He says they also threatened to kill him, or send him to a country where they said he would receive far worse treatment. Against his will, they allegedly administered chemicals, which Padilla believes were psychotropic drugs.

When his lawyers were finally allowed access to him, he was not permitted to tell them about prison conditions.

If Padilla’s allegations are true, they qualify as torture under international law: the intentional infliction of severe physical or mental pain for purposes such as interrogation. The U.N. Committee on Torture and the Inter-American Court of Human Rights have held that incommunicado detention—even for periods far shorter than Padilla endured—is torture. They have also ruled that combinations of sensory deprivation techniques amount to torture, as well.

According to Padilla’s complaint, a “substantial body of clinical literature and expert opinion … holds that restriction of environmental and social stimulation has a profoundly deleterious effect on mental functioning, and that even a few days of solitary confinement predictably causes brain patterns to become measurably abnormal.”

It would drive anyone mad.

Waging ‘lawfare’

Yoo has castigated Padilla and his lawyers at the Yale Law School clinic for waging “lawfare,” which Yoo calls “another dimension” of the terrorist war against the United States.

In a Jan. 16 op-ed in the Philadelphia Inquirer, Yoo complained that terrorists use cases like Padilla’s to press “novel theories that have failed at the ballot box.”

If their legal theories are novel, Yoo can thank himself: Never before has the Justice Department sanctioned prolonged, mind-altering brutality on a U.S. citizen.

Still, suing a government lawyer for rendering legal advice, no matter how injudicious, ought to give pause. Such lawsuits could deter creative thinking by attorneys trying to protect the public. If allowed at all, they should be confined to rare and extreme cases, such as Yoo’s torture memo.

There are limits on what advice lawyers may give. After World War II, German government lawyers who wrote memos and orders depriving Russian prisoners of war of their Geneva Conventions protections, and authorizing the forced disappearances of political prisoners, were convicted at Nuremberg. Would authorizing torture of prisoners have made them any less guilty?

Although the suit against Yoo does not seek to convict him of a crime, it does aim to hold him civilly liable—for a symbolic $1 in damages—not only for the torture, but also for his legal advice that allegedly led to violations of Padilla’s constitutional rights. Those include the rights to counsel, access to court, due process of law, freedom of religion, rights to information and association, and his rights to be free from inhumane conditions of confinement, cruel and unusual punishment, coercive interrogations and improper military detention.

In pressing these wide-ranging claims, Padilla’s lawyers face daunting legal obstacles. Unlike most damages suits for violations of basic rights, civil rights law does not authorize their lawsuit. By necessity, Padilla’s suit rests directly on the Constitution. While the Supreme Court has authorized suits for damages based solely on violations of the Constitution, it does so sparingly—when the violations would not otherwise be subject to judicial or effective oversight and, even then, only if no special factors weigh against the wisdom of creating a new cause of action.

Only one of Padilla’s claims—under the Eighth Amendment—has arguable Supreme Court precedent. Some claims may fail on the ground that they are subject to judicial oversight in the criminal proceedings against him. Others may be rejected because they deal with gray areas of national security law, where legal mistakes should not result in damages suits.

But Padilla should probably be allowed to try at least his core claims—that the torturous confinement and interrogation techniques violated his Fifth Amendment right to due process, and possibly his Eighth Amendment right not to be subjected to cruel and unusual punishment. To the extent the prosecution in his criminal trial did not rely on any coerced confession by Padilla, these alleged violations have not been subject to judicial oversight.

Curbing an imperial presidency

If Padilla overcomes this hurdle, others remain. Yoo may contend that he is entitled to absolute immunity, as are prosecutors when presenting their cases to a court. But Yoo more likely will be granted only the “qualified immunity” afforded to prosecutors when they advise police on interrogation techniques, or to the attorney general when he authorizes national security wiretaps without a judicial warrant.

If Yoo is granted qualified immunity, he can be held liable for his erroneous legal advice only if it violated “clearly established statutory or constitutional rights of which a reasonable person would have known.” In this case, his legal advice plainly did: Yoo’s memo legally authorized torture.

But the issue is not so simple.

Yoo’s overriding legal rationale is that the president’s powers give him constitutional license to override any law—including laws against torture—if he deems it necessary to wage a war. The courts may thus need to consider whether any reasonable lawyer could advise that the Constitution allows the president to disregard all law during wartime.

Finally, the government might decide to assert the “state secrets” privilege to quash Padilla’s claims, on the ground that the claims cannot fairly be adjudicated without probing secret intelligence methods and communications.

Unless barred by the state secrets privilege, Padilla’s suit will likely break new ground. Far from a case of “lawfare,” it promises to strengthen the rule of law by clarifying whether and when government lawyers can be held accountable for ill-considered legal advice.

Behind all the blather and bullshit about the Federal Reserve’s rescue gambits and the machinations of the ratings agencies, and the wiles of foreign sovereign wealth, and the incomprehensible mysteries of markets, and the various weather forecasts of a gathering “recession” is the simple fact that the USA is a way poorer nation than we imagined ourselves to be six months ago. The American economy has been running on the fumes of “creatively engineered” finance (i.e. new-and-improved swindling) for years, and now these swindles are unraveling. In their aftermath, they leave empty wallets, drained bank accounts, plundered retirements funds, boiled away capital reserves, worthless stocks, bankrupt companies, vandalized housing tracts, ruined families, and Wall Street executives who are still pulling down multimillion-dollar pay packages despite running their companies into the ground.

We’re burning down the house and kidding ourselves that there is a remedy for it. All the rate cuts and loans to big banks and bank-like corporate organisms, and “monoline” bond insurers, and mortgage mills amount to little more than a final desperate shell game to conceal the radioactive pea of aggregate loss. The losses are everywhere, and when you add up seven billion here and eleven billion there they probably amount to something like a trillion dollars in sheer capital evaporation — not counting the abstract “positions” that the capital was leveraged onto by the playerz and boyz who mistook algorithms for productive activity.

The shell game may run a few more weeks but personally I believe the timbers are burning. The losses are no longer “contained” or concealable. A consensus has now formed that we’re in for a “recession.” The idea is that, yes, this seems to be the low arc of the business cycle. Fewer Hamptons villas will be redecorated in the interim. We’ll gird our loins and get through the bad weather and when the sun shines again, we’ll be ready with new algorithms for new sport-with-capital.

Uh-uh. Think again. This is not so much financial bad weather as financial climate change. Something is happenin’ Mr Jones, and you don’t know what it is, do ya? There has been too much misbehavior and it can no longer be mitigated. We’re not heading into a recession but a major depression, worse than the fabled trauma of the 1930s. That one occurred against the background of a society that had plenty of everything except money. Back then, we had plenty of mineral resources, lots of trained-and-regimented manpower, millions of productive family farms, factories that were practically new, and more than 90 percent left of the greatest petroleum reserve anywhere in the world. It took a world war to get all that stuff humming cooperatively again, and once it did, we devoted its productive capacity to building an empire of happy motoring leisure. (Tragic choice there.)

This new depression, which I call The Long Emergency, will play out against the background of a society that has pissed away its oil endowment, bulldozed its factories, arbitraged its productive labor, destroyed both family farms and the commercial infrastructure of main street, and trained its population to become overfed diabetic TV zombie “consumers” of other peoples’ productivity, paid for by “money” they haven’t earned.

There is a theory (see Nouriel Roubini’s blog) that a reform process will now ensue in the financial realm, new regulation and oversight of the same old familiar activities. This too, I’m afraid, will prove to be wishful thinking. The financial system will not be reformed until it lies in smoking wreckage, and when that “re-form” happens the armature of the re-organizing society will barely resemble the one that the previous burnt-down-house was designed to dwell in. Among other things, it will not support capital enterprise at anything like the scale that we became accustomed to lately. Globalism will be over. The great nations of the world will be scrambling desperately for the world’s remaining oil supplies. It will not be a friendly contest, and anyone who thinks that current trade relations and capital flows will continue despite that is liable to be disappointed. (Are you reading this Tom Friedman?)

Long before the mathematical projections of oil depletion play out, the oil markets themselves — and all the complex operations that they comprise, such as drilling and exploration, and the movement of tankers around the planet — will destabilize and seize up. We will no longer be any oil exporter’s “favored customer.” Many of the exporters will enjoy watching us suffer. Contrary to the political platitude-du-jour, the USA will never become “energy independent” in the way we currently imagine. Rather we’ll become energy independent by being deprived of imported oil, and we’ll be thrown back on our own dwindling supplies — which means that we’re not going to run our system of daily life the way it has been set up to run. When Americans can no longer run their cars on a whim, they will simply go apeshit and you can kiss normal politics goodbye.

The financial system that emerges from this cataclysm, and the economy it serves (which is supposed to be the master of its capital deployment “arm,” not its servant) will likely be modest to a degree that will shock and embarrass everyone currently connected with what we have lately called finance. If it even trades in paper, that paper will have to stand for something based in reality, either a productive activity or a genuine asset. It may take decades for this society to even regain the confidence necessary to operate such an elementary system — or it may not come back at all, at least as far as the horizon lies before us. That’s how bad the mischief and the damage has been.

It’s not hard to understand why the Bernankes, Paulsons, Lawrence Kudlows and other public representatives of capital keep pretending that everything is under control. On the other side of their pretenses lies disorder and hardship. One wonders, of course, what they really see in their private minds’ eyes. Do they actually believe that the statistics issued by their serveling agencies amount to a plausible picture of reality? Are they so lost in their fantasies of “management” that they think they’re controlling events?

“The truly undecided voter is rare, say those who study the psychology of voting,” Joe Garofoli wrote in The San Francisco Chronicle. “Since neuroscientists say 90 percent of thought is unconscious, an undecided voter may have already decided–he just hasn’t revealed his pick to himself yet.”

Whether I’m a rare bird or a typical victim of self-denial, I didn’t know how I was going to vote until election day–or, to be more precise, a election minute. Roughly 15 to 20 percent of 2008 primary voters have had similar trouble getting their unconscious to talk to them.

Most of the electoral procrastinators are conservative Republicans and liberal Democrats–party loyalists whose influence has been diluted by independents who vote in their primaries. As has been widely discussed, conservatives were unhappy with the entire field of Republican presidential contenders. Less noted but no less significant has been the effect of John Edwards’ departure from the Democratic field.

Lefties don’t have a candidate.

Like most hardcore liberals, I had planned to vote for Edwards. I’m a registered Democrat. I live in New York, a “closed primary” state. That left Hillary Clinton and Barack Obama.

I studied the printed grid inside my mechanical voting machine, a steel beast from the 1950s. New York keeps threatening to replace the classic booths. I hope they keep them forever. Old-school machines have a feature I treasure: you flip a switch to make an “X” appear next to your choice. You’re not committed until you pull the lever to open the curtain; you can flip the switch back and go with someone else instead.

I moved the switch to Hillary, to see how it looked. Hillary. Ted Rall votes for Hillary. I asked myself my usual test question: If she won, and I watched her being sworn in next January, how would I feel?

Bored. And slightly depressed.

I thought about the experience issue, her biggest advantage. “I am offering 35 years of experience making change,” she says. Though way overstated–35 years of what? being a lawyer?–living in the White House has to have left her with some insights. Unlike Obama, Hillary wouldn’t lose her way searching for the restroom. But political dynasties suck. Bush-Clinton-Bush-Clinton would be a sad statement. A nation of 300 million people shouldn’t keep turning to the same few families for leadership.

A woman president is a couple of centuries overdue. But issues matter more than affirmative action. I couldn’t overlook Clinton’s votes to go to war and to waste hundreds of billions of dollars on the never-ending horror show of Iraq. Thousands of people are dead because of her.

Hillary Clinton didn’t think Iraq had WMDs. No one smart did. The polls were running for the war, and so was she. She pandered. It was disgusting. But I was even more appalled by her lousy political skills. It ought to have been evident, even then, that (a) the war wouldn’t go well, (b) Americans would turn against it, and (c) this would occur before she was up for reelection in 2006. It was obvious to even me at the time, and it took me ten years to get a bachelor’s degree.

She was wrong. She had bad judgment. And her September 2007 vote for possible war against Iran proves she still does. I moved the lever left. The “X” disappeared from Clinton’s box.

I made an “X” pop up next to Obama’s name. “I, Barack Hussein Obama, do solemnly swear that I will faithfully execute the office of…” I wasn’t feeling it.

For what will soon have been eight long years, I reflected, left-of-center Americans have endured an illegitimate administration of morons, thieves and bullies. “[The press secretary’s] job is to help explain my decisions to the American people,” Bush once said, describing how he interacts with people who disagree with him. Bush stacked the Supreme Court by appointing right-wing extremists to replace moderates. Compromise was an alien concept to the Bushies. They did whatever they wanted–wars, torture, tax cuts for the superrich, tapping political dissidents’ phones–and Democrats did nothing to stop them, even after they regained control of both houses of Congress.

After 9/11 Republicans repeatedly screamed that liberals were pro-Islamist, anti-American traitors. Right-wing opinion mongers–Ann Coulter, Andrew Sullivan, James Taranto of The Wall Street Journal, William Kristol of The Weekly Standard (and now The New York Times) accused me of treason. (Hey, I’m not the one trying to get rid of the Bill of Rights.)

Former GOP presidential candidate Alan Keyes suggested that I be imprisoned or shot. And “mainstream” Republicans indicated their tacit agreement with cricket-chirping silence. Not once did a Republican Congressman demand that their neo-McCarthyite allies apologize for their statements. Not once did a Republican opinion columnist take issue with equating the Democratic Party with anti-Americanism. Not once. Compare that to the Democratic practice of “Sister Souljah-ing” lefties who annoy the conservative hyenas.

“I want the Republicans to feel the way I did in 2004,” an Iowa Democrat told The New York Times. So do I. I want them to watch everything they care about disassembled. Take Reagan and Bush’s names off the airports, nationalize major corporations, demolish Gitmo, gay marriage–anything that pisses them off.

I want revenge. Obama preaches reconciliation. “I will create a working majority because I won’t demonize my opponents,” says Obama. The Illinois senator is an interesting politician and might make a good leader. But not yet. Give me eight years of Democratic rule as ruthless and extreme and uncompromising as the last eight years of Bush. Then we can have some bipartisanship.

Obama’s let’s-tiptoe-through-the-tulips-with-the-GOP shtick amounts to bargaining with yourself. If a vendor at a flea market offers to sell you a lamp for $10 and you’re willing to pay $8, you don’t offer $8. Demonize, Barack, demonize!

Oh, and Obama says he wouldn’t have voted for the Iraq War. I say he’s lying. So do his votes for funding the war since he joined the Senate. His voting record on Iraq is the same as Hillary’s.

Hillary, no. Obama? Nobama. What to do?

“Hundreds of thousands of Democrats and independents who were motivated enough to go and vote on February 5 did so for Edwards, knowing full well that he was out of the running,” reports The Nation. I was one of them.

Terrorism flourishes brazenly at Ground Zero, in the new 7 World Trade Center building. Here can be found a secretive entity of fabulous wealth and power. Kingdom and corporations alike tremble at its shadow and make haste to pay it tribute. I refer to Moodys Investor Services, wholly owned subsidiary of Moody’s Corporation, which reported $2 billion in revenues in 2006.

On January 10 Moody’s, in concert with the other main bond rating firm, Standard and Poor’s, gave the United States its top AAA credit rating. The terrorist blackmail threat came in the form of a demand by Moody’s that the U.S. government “reform” Social Security and Medicare: “In the very long term, the rating could come under pressure if reform of Medicare and Social Security is not carried out as these two programs are the largest threats to the long-term financial health of the United States and to the government’s Aaa rating.”

Steven Hess, Moody’s top analyst for the US economy spelled it out even more explicitly to the London Financial Times: “If no policy changes are made, in 10 years from now we would have to look very seriously at whether the US is still a triple-A creditThe US rating is the anchor of the world’s financial system. If you have a downgrade, you have a problem.”

US interrogators torture men in secret prisons seeking to catch those members of Al Quaeda still at large, starting with Osama bin Laden and Aiman al-Zwahiri. Yet here’s Moody’s man calmly threatening to destroy the US government’s credit ranking unless it follows his agenda, and he strolls around Lower Manhattan unmolested, even if his threats could add up to the financial equvalent of a thermonuclear device planted under the Statue of Liberty.

Moody’s runs a protection game. It issue credit ratings, (in 2007 no less than 39 percent of the global credit rating market by revenue, according to Bloomberg) based on public data and private information made available by those clients that have “voluntarily” retained their services. The price of not volunteering can be high. As vividly described by Alec Klein in his excellent 2004 series in the Washington Post on the credit-rating giants, the giant German insurance corporation Hannover declined repeated Moody’s offers to rate its credit, at a time when the latter was trying to extend its reach in the European Community. Moody’s promptly issued an unsolicited and adverse rating, then–just like a small time mobster after hurling a brick through the window of a liquor store–went back to Hannover and reissued its invitation to offer protection-by-rating. Hannover’s top man said he wouldn’t surrender to blackmail and so between 2001 and 2003 Moody’s steadily reduced Hannover rating all the way down to Junk. This cost Hannover a great deal of money in paying the higher risk premiums on money it borrowed.

By contrast Enron handled relations with Moody’s with ermine gloves. All the way through 2000 until a few days before Enron filed for Chapter 11, Moody’s, like S&P, declined to lower the boom by demoting bonds issued by Enron company to below-investment grade. Banks with huge sums at stake allegedly pressured Moody’s to keep quiet, even though Moody’s had privileged access to Enron’s internal financial operations.

Today, the world’s credit system is strained to bursting point by such financial scams as CDOs (collateralized debt obligations) which are bundles of debt instruments, ranging from junk bonds through subprime mortgages. Moody’s and the other rating agencies have played a crucial role in putting the CDOs together in the first place.

Of course the terrorists in lower Manhattan want Wall Street to get its mitts on the pools of money held in the Social Security trust funds. But if Moody’s is going to present itself as a major political player, presuming to dictate national policy down the barrel of a financial gun, its executives and analysts should be hauled into the Star Chamber. Let’s have a war on terror and a rendition of Moody’s executives to explain, before a special investigative committee of congress with full subpoena power, their own role in causing the financial upheavals afflicting the planet right now, due to the collapse of the housing bubble and its impact on the home mortgage market.

As Prof. Robert Pollin of U Mass/Amherst remarked last week to me, “We could say the Bubble and crisis occurred because people like Moody’s rating agency always misread the build up of bubbles. They assume the rise in asset prices represents something fundamentally different about the economy, and then open the floodgates for financial speculation. Based on this, we should rather be talking about the stability of U.S. and global financial markets coming under immediate pressure due to the fact that market analysts, like Moody’s, don’t have a clue as to what they are talking about.”

Right now the US deficit is around $200 billion, 1.5 percent of GDP, not large and presenting no danger in itself to U.S. financial soundness. But as Pollin adds, if Moody’s analysts want to discuss causes of fiscal laxity, “why not look at the Iraq war? The Defense budget for 2006 was $617 billion. That is 4.8 percent of a $13 trillion GDP. Before the Iraq war, the defense budget was about 3.0 percent of GDP. So Iraq alone is costing between $150 – 200 billion annually, about 1.5 percent of GDP.. And what has that war achieved? Social security and medicare combined were about $900 billion in 2006. Why assume we first have to attack our minimal welfare state, and leave the imperial budget intact? “

In fact it’s almost entirely Medicare, not Social Security, that accounts for the projected rising costs in our shrivelled welfare state. The culprit here is not the swelling ranks of older people but the insurance and drug companies’ grip on our health system. Conversion to single-payer would mean huge savings. The U.S. pays around 14 per cent of its gross domestic product for health care, twice what other advanced industrial countries pay. Shift to single payer and quit shoving money–4.8 per cent of GDP–down the imperial sink-hole and there’s no fiscal crisis of any sort, short or long term for Moody’s or anyone else to fret about. And in the even shorter term, if Moody’s sees fiscal crisis looming, why don’t its overpaid executives for once put the national interest first and call for a tax hike on the rich? Bob Pollin tells me that just going back to Clinton, as opposed to Bush-2, on taxes for those making over $200,000 a year, would generate $60 billion a year. Do this and end the war in Iraq and you wipe out the deficit at a stroke.

Let a real war on terror commence!

Amid its blackmailing threats to launch a terrorist onslaught on the credit rating of the United States, Moody’s has its moments of honesty about the capitalist rackets in which it is a major player. Witness its extraordinarily forthright recent background document, “Archaeology of the Crisis”, part of its series, “Moody’s Global Financial Risk Perspectives” “In the financial industry, in contrast with other businesses, there is a point beyond which increased competition is not stability-enhancing, but rather potentially destabilizing past a certain point–difficult to identify–more competition means more, and perhaps socially undesirable risk-taking.”

With bracing frankness Moody’s archeologist of capitalism concedes ” it is also possible that the welfare benefits of some financial innovations may be lower than expected Accepting the existence of crisis is the Faustian pact that policymakers have made with the financial industry. However, the pact is an implicit one, as policymakers are reluctant to concede that they will have to intervene in extreme situations–that is when almost no capital cushions could be large enough to absorb truly exceptional problems.”

In other words, says Moody’s man, capitalism is impelled by competitive pressures that are often profoundly anti-social in consequence and lurches from lurches from crisis to crisis, — on average roughly 7.5 years apart since the late 1800s, as the late Charles Kindleberger once demonstrated — that in the end require the intervention of the state, which has to save the system from the consequences of the market’s excesses–which is why we have the scant protections we do, such as Medicare and Social Security.