The Rag Blog

The man who ran CNN’s news operation during the invasion of Iraq is now doing damage control in response to a new documentary’s evidence that he kowtowed to the Pentagon on behalf of the cable network. His current denial says a lot about how “liberal media” outlets remain deeply embedded in the mindsets of pro-military conformity.

Days ago, the former CNN executive publicly defended himself against a portion of the “War Made Easy” film (based on my book of the same name) that has drawn much comment from viewers since the documentary’s release earlier this summer. As Inter Press Service reported, the movie shows “a news clip of Eason Jordan, a CNN News chief executive who, in an interview with CNN, boasts of the network’s cadre of professional military experts.’ In fact, CNN’s retired military generals turned war analysts were so good, Eason said, that they had all been vetted and approved by the U.S. government.”

Inter Press called the vetting-and-approval process “shocking” — and added that “in a country revered for its freedom of speech and unfettered press, Eason’s comments would infuriate any veteran reporter who upholds the most basic and important tenet of the journalistic profession: independence.”

But Eason Jordan doesn’t want us to see it that way. And he has now fired back via an article in IraqSlogger, which calls itself “the world’s premier Iraq-focused Web site.” Jordan runs that Web site.

The journalist who wrote the Aug. 14 article, Christina Davidson, was in an awkward spot: “War Made Easy” directly criticizes her boss, and it was the subject of the article.

Davidson’s only assessment of the film that wasn’t favorable had to do with its criticisms of Jordan. “While there’s no doubt that journalistic laziness contributed to the uncritical re-broadcasting of the Bush administration’s official line,” she wrote, “Solomon takes it a little too far in trying to make the case that all of the cable networks were actively complicit in promoting the war. Solomon bases his reasoning primarily on one choice quote from Eason Jordan, former CNN news chief and current CEO of IraqSlogger’s parent company, Praedict.”

In fact, the film provides a wide range of evidence that “all of the cable networks were actively complicit in promoting the war” — the result of chronic biases rather than “journalistic laziness.” And CNN, like the rest of the cable news operations, comes in for plenty of tough scrutiny in the documentary. As the magazine Variety noted in a review of “War Made Easy” a few days ago, “Fox News is predictably bashed here, but supposedly neutral CNN gets it even harder.”

CNN is among the news outlets at the core of the myth of “the liberal media” — perpetuated, in part, by the fact that people are often overly impressed by the significance of rhetorical attacks on some media organizations by more conservative outlets. (Before his resignation from CNN in 2005, Eason Jordan was himself subjected to denunciations from the right — for allegedly skewing news coverage to curry favor with the Baghdad government during Saddam’s rule and, after the invasion, for reportedly stating that U.S. troops had targeted some journalists in Iraq.) But antipathy from right-wing pundits is hardly an indication of journalistic independence.

Stretching to defend Jordan’s CNN record, IraqSlogger complains that the CEO of its parent company is unfairly characterized in the film: “Solomon assumes that Jordan was seeking the blessing of Pentagon officials on the propriety of his choices, when in fact he was just doing a boss’s duty.”

The article then provides a quote from Jordan, supplying his explanation to set the record straight: “Employers routinely vet prospective employees with their previous employers. In these cases, we vetted retired generals to ensure they were experts in specific military and geographic areas. The generals were not vetted for political views.”

The explanation can only flunk the laugh test.

Eason Jordan was CNN’s chief news executive when, on April 20, 2003 (a month after U.S. troops invaded Iraq), he appeared on CNN and revealed that he’d gotten the Defense Department’s approval of which retired high-ranking officers to put on the network’s payroll. “I went to the Pentagon myself several times before the war started and met with important people there and said, for instance — At CNN, here are the generals we’re thinking of retaining to advise us on the air and off about the war’ — and we got a big thumbs-up on all of them. That was important.”

With war euphoria riding high, Jordan was eager to shore up his — and CNN’s — image as cooperative pals of the nation’s military commanders. Now, Jordan is trying some backspin with the claim that he was merely checking job references.

“Often journalists blame the government for the failure of the journalists themselves to do independent reporting,” I note in the documentary. “But nobody forced the major networks like CNN to do so much commentary from retired generals and admirals and all the rest of it.” What Jordan did on behalf of CNN “wasn’t even something to hide, ultimately. It was something to say to the American people on his own network, See, we’re team players. We may be the news media, but we’re on the same side and the same page as the Pentagon.’ And that really runs directly counter to the idea of an independent press. And that suggests that we have some deep patterns of media avoidance when the U.S. is involved in a war based on lies.”

The FDA’s latest campaign to protect the profits of a drug company over the safety of Americans is unprecedented, and the organizers include a gang of current and former FDA officials largely credited with turning the nation’s regulatory beagle into a lapdog for Big Pharma under the Bush Administration.

FDA spokesman Douglas Arbesfeld, apparently the industry’s new inside guy, kicked off the campaign by sending an e-mail to journalists which was intended to discredit Dr Steven Nissen and the Cleveland Clinic. Dr Nissen’s study appeared online on May 21, 2007, in the New England Journal of Medicine and warned that GlaxoSmithKline’s diabetes drug Avandia increased the risk of heart attacks by 43% and death from cardiovascular events by possibly 64%.

The talking points for the media appear to have been formulated and agreed upon ahead of time between Arbesfeld and others (see below) because more than one story from ostensibly different sources later appeared in the media and on the internet referring to Dr Nissen with such names as “St Steven”, “Patron Saint of Drug Safety” and “Saint Steven the Pure.”

In his email to journalists, Mr Arbesfeld pasted portions of an article which appeared on the Heartwire website, containing umpteen critical comments about Dr Nissen and the Avandia study, as well as comments made by an anonymous blogger on the internet who said that business at the Cleveland Clinic is run similar to a Mafia TV series. The full bog states:

“Wake up pharmaceutical companies, this is a call from Dr. Nissen, if you don’t hire the Cleveland Clinic for your big trials then you face the firing squad from Nissen and Company.”

“The Cleveland Clinic was one of the most respected names in medicine, now they are positioning themselves as candidates to take over for a new series on HBO to replace the Soprano’s ” the Clinico’s ‘next week who should we wack ……’ ” Bata bing bata boon. Comment by Brian A – May 22, 2007.”

However, it could just as easily be inferred that Mr Arbesfeld authored the slanderous blog and supplied it to Heartwire with the intention of quoting it later from a “reputable web site. For its part, Heartwire has since removed what it says are “unsubstantiated remarks about Dr Nissen and the Cleveland Clinic,” and states: “In retrospect we regret that we published those sentences, as they do not meet the highest standards of journalistic or scientific integrity or credibility.”

The smear campaign has federal lawmakers up in arms. At a June 6, 2007 hearing before the House Oversight and Government Reform Committee, in response to questions about Mr Arbesfeld sending the e-mail under his official title of FDA spokesman, FDA Commissioner Andrew von Eschenbach told the lawmakers, “It was an inappropriate and unfortunate act on the part of an individual which has been addressed through disciplinary procedures.”

Dr Nissen is none too happy about the stunt either. “I’m a pretty tough guy,” he told ABC News on May 30, 2007, “but I’ll tell you, having this kind of an e-mail that questions my motives, broadcast to the major journalists with whom I work and have established a reputation, is — it’s an outrage.”

As for his part, Mr Arbesfeld told the Boston Globe that the email reflected his own personal views and not the FDA’s. Any assertion that the email reflected his own personal views is not quite credible considering that his previous employment was always promoting the views of the industry.

A few articles in the media mentioned that Mr Arbesfeld worked for Johnson & Johnson, but his employment with public relations firm Manning Selvage & Lee was not noted. On December 16, 1999, the Healthcare Marketing & Communications Council reported that Mr Arbesfeld had joined Manning as Senior Vice President in New York.

On January 5, 2001, the firm issued a press release to announce the promotion of Mr Arbesfeld and others and referred to Manning as “one of the largest healthcare practices worldwide and has a broad array of clients including Allergan, Amgen, Eli Lilly and Company, Genentech, Hoffmann La-Roche, Kaiser Permanente, Novartis, Pharmacia and Procter & Gamble.”

In reading the press release, Mr Arbesfeld’s expertise with using the Internet is apparently a bi-product of his work for Manning. “In this role,” it said, “Arbesfeld will help healthcare clients maximize internet-relations in the marketing and communications mix, and will expand the Practice’s strategic e-product offerings.”

On August 5, 2002, Arbesfeld identified himself in a Reuters article as representing none other than Glaxo, along with six other drug giants including Bristol-Myers, Aventis, J&J, AstraZeneca, Abbott Labs and Novartis, in a campaign to promote the “Together Rx” prescription drug card program for senior citizens. In 2005, the Reporters Handbook listed him as the contact person for J&J subsidiaries, Janssen Pharmaceutica, Ortho-McNeil Pharmaceutical and Ortho Biotech Products.

Less than a week after Mr Arbesfeld’s hatchet job on Dr Nissen, ex-FDA Deputy Commissioner Dr Scott Gottlieb planted an editorial in the May 29, 2007, Wall Street Journal entitled, “Journalist Malpractice,” accusing the New England Medical Journal of intentionally publishing the Nissen study to make the FDA look impotent. “The publication was timed,” he wrote, “to get ahead of the Food and Drug Administration’s more careful evaluation of the same issues.”

“The journal seemed bent on beating the FDA to the punch,” Dr Gottlieb claimed.

“The goal?” he said, “Painting the FDA as impotent, in order to argue for legislation winding through Congress that would increase regulatory hurdles for drug approvals.”

The only problem with the Nissen-NEJM conspiracy theory is that the issue under investigation in Congress right now is why the FDA did not warn the public about Avandia heart risks six months before the Nissen study was ever published.

In the end, when it comes to “Journalistic Malpractice,” the larger question would seem to be how was it that so many industry shills were able to get the major media outlets and medical journals to immediately publish commentaries and editorials attacking the NEJM and the Nissen research with headlines splashing all over the internet.

In his editorial, Dr Gottlieb notes that there are “questions” whether Avandia is associated with heart risks, but says they are “so far unsupported by more rigorous, randomized studies and extensive review by the FDA and other authorities around the world.”

“When it comes to the issue du jour, drug safety,” he wrote, “no description of medical research in a medical journal comes close to the detail level or scrutiny imposed by the FDA on study results before approval.”

Assuming this is true, the problem is that the industry insiders running the FDA refuse to act on the advice of the agency’s top scientists with first hand access to the underlying data. In a July 26, 2007 speech on the Senate floor, Senator Charles Grassley (R-Iowa), of the Senate Finance Committee, said that, in the case of Avandia, “Not only did the FDA disregard the concerns and recommendations from the office responsible for post-marketing surveillance, but I have found that it also attempted to suppress scientific dissent.”

In the past two months, he told his fellow senators, “I’ve had to write to the FDA regarding the suppression of dissent from not one but two FDA officials involved in the review of Avandia.”

The Heartwire website conveniently echoed Dr Gottlieb’s sentiments by featuring portions of a May 23, 2007, unsigned editorial from the medical journal The Lancet, which claimed that the verdict on Avandia should await the results of a Glaxo sponsored trial called RECORD, not due out until 2009.

“Taken together,” the editorial said of Dr Nissen’s findings, “these results, although based on very small numbers of events, certainly raise a signal of concern and indicate the need for more reliable information about rosiglitazone’s safety.”

“But the FDA, physicians, and patients can reasonably await the results of RECORD, a phase 3 trial designed specifically to study cardiovascular outcomes,” it said.

“Until the results of RECORD are in,” the Lancet noted, “it would be premature to overinterpret a meta-analysis that the authors and NEJM editorialists all acknowledge contains important weaknesses.”

The problem with waiting two years for the results of the RECORD trial is that FDA scientist Dr David Graham reviewed the results of this study thus far and told an FDA advisory panel that the study design is so flawed that the results should not be considered in any risk benefit analysis of Avandia now, or in 2009.

In fact, Dr Graham says the RECORD study is so useless that it is probably unethical to allow it to continue because no possible benefit can be achieved by allowing it to go on and that Avandia should be pulled off the market now because thousands of patients are being injured each month by using the drug.

At the end of his editorial, Dr Gottlieb lists himself as a physician and a resident fellow at the American Enterprise Institute, as well as former Deputy Commissioner of the FDA from 2005 to 2007. However, back on August 24, 2005, the Seattle Times provided a much better picture of his background and highlighted the oddity of the FDA hiring him in the first place in light of his solid alliance with the industry. “Only a month ago,” the article states, “Dr Scott Gottlieb was a Wall Street insider, promoting hot biotech stocks to investors.”

At the time, the Times noted, “Now Gottlieb holds the No. 2 job at the federal agency that approves new drugs, oversees their safety and affects the fortunes of companies he once touted.”

“Now, as one of three deputy commissioners,” the article said, “Gottlieb will help oversee such major policies as the FDA’s fast-track approval process for drug and biotech products, a priority for many Wall Street funds and the pharmaceutical industry.”

The Times also noted that a half-dozen current and former FDA officials said they did not know of anyone else from Wall Street ever moving directly into such a high-level job at the agency.

A couple months later, the November 12, 2005, Boston Globe reported that Dr Gottlieb could not participate in formulating the nation’s defense plan against the avian flu due to conflicts of interest. He “was recused from key parts of the planning effort because his past consulting work for Manning Selvage & Lee involved companies whose products would be used to combat a flu pandemic,” it said. Yes, the very same Manning Selvage & Lee at which Arbesfeld held the Senior Vice President position. Does anyone smell a rat (or several)?

The article pointed out that Dr Gottlieb’s former clients included Roche, the manufacturer of Tamiflu, and Sanofi-Aventis, the parent company of the nation’s sole flu vaccine maker.

According to the Globe, Manning paid Gottlieb a $12,500 monthly retainer for nine months for projects that included eight companies, and he was also paid $9,000 for private consulting work for VanGen Inc, a firm that won a $878-million contract to supply the US government with 75 million doses of anthrax vaccine.

These days, financial/market punditry seems to follow two opposite lines of thinking. It ranges from the predominant view that world economies are growing and sound, problems in them minor and fixable, and current volatility (aka turmoil) is corrective, normal and a healthy reassessing and repricing of risk. Contrarians, on the other hand, believe the sky is falling. Most often, extreme views like these turn out wrong and are best avoided. Things are never that simple and hindsight usually proves only Cassandra was good at forecasting although calling market tops and bottoms wasn’t her specialty.

Amidst all the commentary and sorting out of market Strang und Durm these days, some financial world figures stand head and shoulders above the rest for their wisdom, level-headednessness and believability. One in particular is Jeremy Grantham, called by some the philosopher king of Wall Street even though he’s based to the northeast in Boston. In 1977, he co-founded Grantham, Mayo and Van Otterloo, now known as GMO. In his Quarterly Letters to clients, he assesses current market conditions and usually takes a longer view as well. His commentaries are detailed, scholarly, sober and clear.

The Vanguard Group of mutual funds founder John Bogle calls Grantham “one of the top two or three individuals in this business (and) If there’s anybody in this whole business who calls a spade a spade (that person is) Jeremy Grantham.” A metaphor for his wisdom, attitude and investing style sits aside his office desk. It’s a huge 9th century stone Buddha signifying “everything in moderation” and one of Grantham’s core beliefs that all markets eventually revert to their mean values from their highs and lows.

Based on his company’s exhaustive research, there are “no exceptions ever.” Bubbles come and go, but, in time, they all settle back in same place. As Grantham puts it: “We know one principal truth at GMO and that is that we live in a mean-reverting world in investing. (Our research) has shown….that all bubbles….eventually break (and our definition of a bubble is a) 2 standard deviation event – the kind of moves that occur about every 40 years.” Grantham mentions four stock market ones in particular that stand out – the US in 1929, US again in 1965 – 72, 1989 in Japan (in land and stocks) and the still ongoing greatest ever US 2000 bubble yet to come back to its mean.

Grantham is known in the trade as a value investor. That means buying financial assets at less than their intrinsic value or what famed investor/Columbia University professor Benjamin Graham (1894 – 1976) called a “margin of safety.” Warren Buffett today calls it “finding an outstanding company (or any financial asset) at a sensible price” as opposed to a bargain that may turn out bogus or a booby trap. Grantham correctly called the equity bubble in the late 1990s and believes the 2000 – 2003 bear market is secular, long-term, and unlikely to end before 2010 despite a continuing four year cyclical bullrun reprieve from 2003 to the present. Only in the fullness of time will he, and the rest of us, know if he’s right.

Earlier in the year, Grantham toured the world for six weeks, returned worried, and wrote about it in his April Quarterly Letter titled “It’s Everywhere, In Everything: The First Truly Global Bubble.” It’s “bubble time,” he observed “from Indian antiquities to modern Chinese art; from land in Panama to Mayfair; from forestry, infrastructure, and the junkiest bonds to mundane blue chips.” All the necessary conditions are in place – “fundamental economic conditions” look excellent; central bank supplied liquidity is plentiful and cheap; and there’s so much around, it’s easy to leverage. Since around mid-July or so, the latter condition no longer is true or perceived to be by investors turned cautious and in some cases even panicky.

Grantham explains human behavior causes bubbles when positive market conditions unleash “animal spirits” to capitalize on opportunities that get carried to extremes when there’s enough cheap credit around as fuel. Even in the best of times, that’s a recipe for trouble with success feeding on itself. It signals by leveraging up, the better investors can do until the music stops as it always does, and the longer and louder it’s been playing, the severer the subsequent headache.

No one knows for sure when big trouble’s coming next or how bad it’ll be when it arrives. Up to early summer, it was smooth sailing and easy profits, but Grantham says what he sees today is unprecedented: “everyone, everywhere (in all asset classes) is reinforcing one another.” Across the world you hear it confirmed that “they don’t make any more land (and) with these growth rates and low interest rates, equity markets must keep rising (and) private equity (plus merger mania, huge stock buy-backs and plenty of central bank supplied fuel) will continue to drive the markets.”

It’s become self-reinforcing and the results are “predictable and consistent.” The three major asset classes – real estate, stocks and bonds – are “expensive compared with (their) replacement cost where it can be calculated.” Equally worrisome, risk premiums “reached a historic low everywhere” until just weeks ago.

Grantham’s conclusion is these are all warning signs spelling eventual trouble because as noted above “Every bubble has always burst (with no exceptions, ever).” When the 2000 bubble deflation resumes, “it will be across all countries and all assets, with the probable exception of high grade bonds.” In addition, risk premiums will widen (and now are) forcing companies to pay higher financing costs for borrowed funds that will depress investor confidence and reduce economic activity.

No one knows how deep or protracted a decline will be, but Grantham stresses it’s coming because the current global bubble is unprecedented. “No similar global event (of this magnitude ever) occurred before.” Now that’s pretty scary stuff to chew on because economic troubles bite everyone and most of all those most vulnerable and least able to weather the storm. That includes ordinary working people with little or nothing invested.

During the current bull run, Grantham was troubled as early as January, 2004 when he advised clients that “The outlook for 2004 is not bad, but the (stock) market is very overpriced and all predictors look bad for the next year and the year after.” As things turned out, he was wrong, or perhaps with future hindsight just way early in his judgment. He was troubled again at year end 2005 when he told investors to “prepare for a decline in the performance of equities and other risk assets in 2006.” Once more, his call was either early or wrong as the past 18 months saw considerable strength until just recently.

His January, 2007 Quarterly Letter assessed what happened saying “Against all odds, Goldilocks tiptoed through the perils of the first (2005) and second (2006) year of the Presidential Cycle….it (2006) was the rarest of rare birds – a perfect year.” As a result, “risk taking also prospered” because of low global inflation, no financial crises anywhere, low interest rates, and “very very” available credit. As things turned out, “this was almost certainly the best year in the entire history of finance for the selling of high credit risks at low premiums.”

One extreme measure of it was the quadrupling of so-called securitized Collateralized Debt Obligation (CDO) instruments (packages of risky and other debt) to around $2.5 trillion facilitated by the so-called “expanded ‘carry trade’ of borrowing in cheap (low interest) Japanese and Swiss currencies.”

Downsides often accompany opportunities, and Grantham explained conditions going into 2007 in breathtaking terms. “Goldilocks global conditions, especially cheap and easy credit, have caused the broadest overpricing of financial assets – equities, real estate, and fixed income – ever recorded.” However, he stressed, “Just because risk taking is off the charts does not mean it can’t keep going for another year” or longer.

The end of a Goldilocks economy was clearly on the minds of people Grantham met on his world tour. Everywhere he traveled he was asked “What is the catalyst for a (market) break” when none was then visible or imminent? He answered citing these vulnerabilities: rising inflation (that’s greater than reported) constraining central bank support for a weakening economy, pointing to the US as an example. This, in turn, will slow economic activity and reduce profit margins that are still way above global norms but will come down.

Then there’s the housing decline a Center for Economic Policy Research (CEPR) report shows is the result of overbuilding and home prices rocketing 70% in value since 1995 adjusted for inflation. It “created $8 trillion in housing bubble wealth” and an unprecedented oversupply of unsold homes and “vacant ownership units.” CEPR believes the coming housing bubble correction “is likely to throw the economy into a recession and quite possibly a very severe (one).”

It notes housing construction has to decline, and revaluing $8 trillion in housing wealth excess will reduce consumption and bring saving rates “back to more normal levels.” Consumers need all they can get because, at today’s elevated prices, the average potential home buyer can’t afford one, and, as one analyst observed, lenders are relearning how to say “no.”

Current economic conditions worry PIMCO’s Bill Gross as well. PIMCO is a 36 year old firm and “one of the largest specialty fixed income managers in the world.” Gross is one its founders and serves as managing director and chief investment officer. In his July Investment Outlook, he said people are “looking for contagion in all the wrong places.” The Bear Stearns and other hedge fund losses are “now primarily history (and) can be papered over with 100 cents on the dollar marks.” The real problem lies in “those millions and millions of homes….not going anywhere….except for their mortgages….going up, up, and up….and so are delinquencies and defaults.”

He cites a recent Bank of America estimate that about $500 billion of adjustable rate mortgages (ARMs) will be reset in 2007, another $700 billion in 2008, and a large proportion of them are subprimes. He noted 7% of these loans are now in default, and the “percentage will grow and grow like a weed in your backyard tomato patch.” This will affect real money in the hundreds of billions of dollars of “toxic waste” that will spill over into reduced consumption, less new home construction, and even AAA-asset backed commercial paper “feel(ing) the cooling Arctic winds of a liquidity constriction.”

In Gross’ view, the sky isn’t falling, and “there is no hint yet of a true ‘crisis’ – these developments” may, in fact, have a salutary effect with “easy credit becoming less easy (and) excessive liquidity returning to more rational levels.” Gross still sees strong global growth ahead, but as a bond fund manager, he’s paid to worry.

In his report, Grantham is worried, too, and notes the housing decline affects prices, credit growth and consumption when subprime and other loan rates are reset higher with a considerable amount coming this year and even more ahead as just noted. In addition, and most significantly, he says rising inflation and widening risk premiums lower “the feasible leverage in private equity deals and place many deals that can be done today (meaning last spring) out of reach, which, in turn, has dire effects on the current stock market (and economy).”

In his current July client Letter, Grantham conceded “no areas of this unprecedented global bubble had yet gone hyperbolic like the internet and tech stocks did in 1999 (until now):” The “candidate” is “the growth rate of leveraged loans. At (a hugely speculative) $545 billion for the first half of this year, it is running 60% up on last year” that’s about the same size gain dot.com and tech stocks made year over year in 1999 with painful consequences not far behind for investors owning them.

Grantham’s July commentary mentioned one other likely market headwind after the 2008 election. It’s the expected fallout from “piling on” moves of “more wealth to the wealthy by shifting more of the tax load to sales and income taxes of average taxpayers and away from the capital gains and dividend taxes of the wealthy.” It means “ordinary working stiffs are not doing particularly well….and are getting antsy” enough to worry politicians to raise taxes on the most well-off.

Grantham expects them to come in higher taxes on capital gains, dividends and top-end ordinary income rates as well as redefining what income is. That will mean more of it will be taxed to reduce the gross disparity between what rich and ordinary folks now pay, and not a moment too soon for those championing fairness, not special privilege. If this happens, however, it “will not be good for the animal spirits of investors” who represent the most important bubble-sustaining input.

Grantham sums up his current thinking with what he calls a “torture(d) analogy.” He compares the global financial system to a giant suspension bridge. “Thousands of bolts hold it together. Today a few of them have fractures and one or two seem to have failed completely. The bridge, however, with typical redundancy built in (unlike the Minnesota one that collapsed), can (easily) take a few failed bolts, perhaps quite a few….This global financial structure is far too large and has far too many interlocking pieces for weakening US house prices and a few subprime issues to bring it down.”

What is worrisome is whether or when we reach a “broad-based level of financial metal fatigue” causing simultaneous multiple bolt failures “with ultimately disastrous consequences.” What’s also scary is the global financial structure is heavily “faith based, held together by unprecedented amounts of animal spirits” moving in the same positive direction. If the faith wanes, it’s then “every man for himself” and look out below.

Also worrisome, but so far contained, is growing subprime mortgage trouble. Until a month ago, equity markets were totally unaffected and may bounce back from their current sell-off. Grantham isn’t panicking but shows concern about flat to declining home prices, a high inventory of unsold homes likely moving higher, and mortgage “honeymoon rate” reset increases up to 2.5 points coming soon for holders “already stretched.” We’re told, he says, that even the subprime market is “contained,” but we have to wonder if “the container, in this case, will turn out to be Pandora’s.”

Then there’s a slowing economy, inflation concerns, high oil and other industrial commodity prices and now agricultural ones as well “boosted by ethanol production” pressuring consumers. “So two of the three great asset classes (now all three) are having the wobblies in some of their components” – real estate and low grade debt (and since mid-July equities and other type debt instruments as well), “especially real-estate related but increasingly including corporate loans and private equity funding….”

Grantham may have written this commentary before the the July-mid-August equity market sell-off. However, based on his prior (and long-standing) comments, his current analysis probably still holds true: “stocks (will likely) make it through this third (and traditionally strongest) year of the Presidential (four year market) Cycle.” The third year in the Cycle “has never declined materially and should be considered the bane of short sellers (and equity market naysayers) everywhere.”

In sum, Grantham says, “a few more bolts in the bridge may fail, but in the end you have to bet the bridge will hold, supported by amazing animal spirits.” At least that’s true up to October when the fourth year of the Cycle begins. Then, the “odds of failure rise” but won’t likely become high until October, 2008 with a new administration and Congress soon to take power. Grantham then gets blunt stating “based on history” (and tax increases he expects), that’s the most likely time for a bear market, and he’s betting on one that could be nasty.

He concludes saying he’s been trying to come up with a simple way to explain “how serious the situation is for the overstretched, overleveraged financial system.” He does it this way: “In 5 years I expect….at least one major bank (broadly defined) to have failed and up to half the hedge funds and a substantial percentage of the private equity firms in existence today (to have) simply ceased to exist.”

WASHINGTON (Aug. 16) – Army soldiers committed suicide last year at the highest rate in 26 years, and more than a quarter did so while serving in Iraq and Afghanistan , according to a new military report.

The report, obtained by The Associated Press ahead of its scheduled release Thursday, found there were 99 confirmed suicides among active duty soldiers during 2006, up from 88 the previous year and the highest number since the 102 suicides in 1991 at the time of the Persian Gulf War.

The suicide rate for the Army has fluctuated over the past 26 years, from last year’s high of 17.3 per 100,000 to a low of 9.1 per 100,000 in 2001.

Last year, “Iraq was the most common deployment location for both (suicides) and attempts,” the report said.

The 99 suicides included 28 soldiers deployed to the two wars and 71 who weren’t. About twice as many women serving in Iraq and Afghanistan committed suicide as did women not sent to war, the report said.

Preliminary numbers for the first half of this year indicate the number of suicides could decline across the service in 2007 but increase among troops serving in the wars, officials said.

The increases for 2006 came as Army officials worked to set up a number of new and stronger programs for providing mental health care to a force strained by the longer-than-expected war in Iraq and the global counterterrorism war entering its sixth year.

Failed personal relationships, legal and financial problems and the stress of their jobs were factors motivating the soldiers to commit suicide, according to the report.

“In addition, there was a significant relationship between suicide attempts and number of days deployed” in Iraq, Afghanistan or nearby countries where troops are participating in the war effort, it said. The same pattern seemed to hold true for those who not only attempted, but succeeded in killing themselves.

There also “was limited evidence to support the view that multiple … deployments are a risk factor for suicide behaviors,” it said.

About a quarter of those who killed themselves had a history of at least one psychiatric disorder. Of those, about 20 percent had been diagnosed with a mood disorder such as bipolar disorder and/or depression; and 8 percent had been diagnosed with an anxiety disorder, including post traumatic stress disorder – one of the signature injuries of the conflict in Iraq.

Firearms were the most common method of suicide. Those who attempted suicide but didn’t succeed tended more often to take overdoses and cut themselves.

In a service of more than a half million troop, the 99 suicides amounted to a rate of 17.3 per 100,000 – the highest in the past 26 years, the report said. The average rate over those years has been 12.3 per 100,000.

The rate for those serving in the wars stayed about the same, 19.4 per 100,000 in 2006, compared with 19.9 in 2005.

The Army said the information was compiled from reports collected as part of its suicide prevention program – reports required for all “suicide-related behaviors that result in death, hospitalization or evacuation” of the soldier. It can take considerable time to investigate a suicide and, in fact, the Army said that in addition to the 99 confirmed suicides last year, there are two other deaths suspected as suicides in which investigations were pending.

NEW YORK (Aug. 15) – People in the U.S. who quietly band together and adopt radical ways – not just established overseas terrorist groups like al-Qaida – pose a serious threat to the American’s security, a new police analysis has concluded.

The New York Police Department report released Wednesday describes a process in which young men – often legal immigrants from the Middle East who are frustrated with their lives in their adopted country – adopt a philosophy that puts them on the path to what Muslim extremists have dubbed a jihad, or holy war.

At a briefing, NYPD officials argued that local law enforcement is best suited to deal with the homegrown terror threat.

“Hopefully, the better we’re informed about this process, the more likely we’ll be to detect and disrupt it,” Police Commissioner Raymond Kelly said during the meeting with private security executives at police headquarters.

The study is based on an analysis of a series of domestic plots thwarted since the Sept. 11, 2001, terrorist attacks, including those in Lackawanna, N.Y.; Portland, Ore.; and Virginia. It was prepared by senior analysts with the NYPD Intelligence Division who traveled to Germany, Spain and other overseas spots to confer with authorities about similar cases.

The report found homegrown terrorists often were indoctrinated in local “radicalization incubators” that are “rife with extremist rhetoric.”

Instead of mosques, those places were more likely to be “cafes, cab driver hangouts, flop houses, prisons, student associations, non-governmental organizations, hookah bars, butcher shops and bookstores,” the report says.

The Internet also provides “the wandering mind of the conflicted young Muslim or potential convert with direct access to unfiltered radical and extremist ideology.”

Kareem Shora, legal adviser for the American-Arab Anti-Discrimination Committee, called the findings faulty and potentially inflammatory.

“It plays right into the extremists’ plans because it’s going to end up angering the community,” said Shora.

The report warns that potential terrorists are difficult for law enforcement to detect because they blend in well with society. It also argues that more intelligence gathering is needed to thwart potential terror plots at their earliest stages.

Potential homegrown terrorists “are not on the law enforcement radar,” the study says. “Most have never been arrested or involved in any kind of legal trouble.”

“No American President can stand up to Israel.”

These words came from feisty Admiral Thomas Moorer, Chief of Naval Operations (1967-1970) and Chairman of the Joint Chiefs of Staff (1970-1974). Moorer was, perhaps, the last independent-minded American military leader.

Admiral Moorer knew what he was talking about. On June 8, 1967, Israel attacked the American intelligence ship, USS Liberty, killing 34 American sailors and wounding 173. The Israelis even strafed the life rafts, machine-gunning the American sailors leaving the stricken ship.

Apparently, the USS Liberty had picked up Israeli communications that revealed Israel’s responsibility for the Seven Day War. Even today, history books and the majority of Americans blame the conflict on the Arabs.

The United States Navy knew the truth, but the President of the United States took Israel’s side against the American military and ordered the United States Navy to shut its mouth. President Lyndon Johnson said it was all just a mistake. Later in life, Admiral Moorer formed a commission and presented the unvarnished truth to Americans.

The power of the Israel Lobby over American foreign policy is considerable. In March 2006, two distinguished American scholars, John Mearsheimer and Stephen Walt, expressed concern in the London Review of Books that the power of the Israel Lobby was bending US foreign policy in directions that serve neither US nor Israeli interests. The two experts were hoping to start a debate that might rescue the US and Israel from unsuccessful policies of coercion that are intensifying Muslim hatred of Israel and America. The Israel lobby was opposed to any such reassessment, and attempted to close it off with epithets: “Jew-baiter,” “anti-semitic,” and even “anti-American.” Today Israeli citizens who oppose Zionist plans for greater Israel are denounced as “anti-Semites.”

Many Americans are unaware of the influence of the Israel lobby. Instead they think of the US as “the world’s sole superpower,” a macho new Roman Empire whose orders are obeyed without question or the insolent nonentity is “bombed back to the stone age.” Many Americans are convinced that military coercion serves our interest. They cite Libya, Serbia, Afghanistan, Iraq, and now they are ready to bring Iran and Pakistan to heel with bombs.

This arrogance results in the murder of tens of thousands, perhaps hundreds of thousands, of men, women and children, a fate that many Americans seem to believe is appropriate for countries that do not accept US hegemony.

Coercion is what American foreign policy has become. Macho superpatriots love it. Many of these superpatriots derive vicarious pleasure from their delusions that America is “kicking those sand niggers’ asses.”

This is the America of the Bush Regime. If some of these superpatriots had their way every “unpatriotic, terrorist supporter” who dares to criticize the war against “the Islamofacists” would be sent to Gitmo, if not shot on the spot.

These Bush supporters have morphed the Republican Party into the Brownshirt Party. They cannot wait to attack Iran, preferably with nuclear weapons. Impatient for Armageddon, some are so full of hubris and self-righteousness that they actually believe that their support for evil means they will be “wafted up to heaven.”

It has come as a crippling blow to Democrats that “their” political party is comfortable with Bush’s America, and will do nothing to stop the Bush regime’s aggression against the Iraqi people or to prevent the Bush regime’s attack on Iran.

The Democrats could easily impeach both Bush and Cheney in the House, as impeachment only requires a majority vote. They could not convict in the Senate without Republican support, as conviction requires ratification by two-thirds of Senators present. Nevertheless, a House vote for impeachment would take the wind out of the sails of war, save countless lives and perhaps even save humanity from nuclear holocaust.

Various rationales or excuses have been constructed for the Democrats’ complicity in aggression that does not serve America. Perhaps the most popular rationale is that the Democrats are letting the Republicans have all the rope they want with which to produce such a high disapproval rating that the Democrats will sweep the 2008 election.

It is doubtful that the Democrats would assume that men as cunning as Karl Rove and Dick Cheney do not understand the electoral consequences of a low public approval rating and are walking blindly into an electoral wipeout. Rove’s departure does not mean that no strategy is in place.

So what does explain the complicity of the Democratic Party in a policy that the American public, and especially Democratic constituencies, reject? Perhaps a clue is offered from the Minneapolis-St. Paul Star Tribune news report (August 1, 2007) that Democratic Congressman Keith Ellison will spend a week in Israel on “a privately funded trip sponsored by the American Israel Education Federation. The AIEF–the charitable arm of the American Israel Public Affairs Committee (AIPAC)–is sending 19 members of Congress to meet with Israeli leaders. The group, made up mostly of freshman Democrats, has plans to meet with Isreali Prime Minister Ehud Olmert and [puppet] Palestinian President Mahmoud Abbas. The senior Democratic member on the trip is House Majority Leader Steny Hoyer, who has gone three times. . . . The trip to Israel is Ellison’s second as a congressman.”

According to the Star-Tribune, a Republican group, which includes Rep. Michele Bachmann (R, Minn), led by Rep. Eric Cantor (R, Va) is already in Israel. According to news reports, another 40 are following these two groups during the August recess, and “by the time the year is out every single member of Congress will have made their rounds in Israel.” This claim is probably overstated, but it does show careful Israeli management of US policy in the Middle East.

Elsewhere on earth and especially among Muslims, the suspicion is rife that the reason the war against Iraq cannot end, and the reason Iran and Syria must be attacked, is that the US must destroy all Muslim opposition to Israel’s theft of Palestine, turning an entire people into refugees driven from their homes and from the lands on which they have lived for many centuries. Americans might think that they are merely grabbing control over oil, keeping it out of the hands of terrorists, but that is not the way the rest of the world views the conflict.

Jimmy Carter was the last American president who stood up to Israel and demanded that US diplomacy be, at least officially if not in practice, even-handed in its approach to Israel and Palestine. Since Carter’s presidency, even-handedness has slowly drained from US policy in the Middle East. The neoconservative Bush/Cheney regime has abandoned even the pretense of even-handedness.

This is unfortunate, because military coercion has proven to be unsuccessful. Exhausted from the conflict, the US military, according to former Secretary of State and former Chairman of the Joint Chiefs of Staff, Colin Powell, is “nearly broken.” Demoralized elite West Point graduates are leaving the army at the fastest clip in 30 years. Desertions are rapidly rising. A friend, a US Marine officer who served in combat in Vietnam, recently wrote to me that his son’s Marine unit, currently training for its third deployment to Iraq in September, is short 12-16 men in every platoon and expects to be hit with more AWOLs prior to deployment.

Instead of re-evaluating a failed policy, Bush’s “war tsar,” General Douglas Lute, has called for the reinstitution of the draft. Gen. Lute doesn’t see why Americans should not be returned to military servitude in order to save the Bush administration the embarrassment of having to correct a mistaken Middle East policy that commits the US to more aggression and to debilitating long-term military conflict in the Middle East.

It is difficult to see how this policy serves any interest other than the very narrow one of the armaments industry. Apparently, nothing can be done to change this disastrous policy until the Israel Lobby comes to the realization that Israel’s interest is not being served by the current policy of military coercion.

What does the Army do with a private who can’t be persuaded to load his gun?

WÜRZBURG, GERMANY – No one looked comfortable at the sentencing hearing. Not family and friends who packed the US military courtroom’s straight-backed benches. Not the rookie Army prosecutor in stiff dress greens who flushed with every “Your Honor.” Not Judge R. Peter Masterton, whose usually animated face was now grave.

And not the convicted deserter – Army medic Agustín Aguayo – on the stand in a US military court in central Germany last March, pleading for understanding.

“I’m sorry for the trouble my conscience has caused my unit,” Private 1st Class Aguayo said, his voice thick with emotion. “I tried to obey the rules, but in the end [the problem] was at the very core of my being.”

Colonel Masterton, a veteran military judge, stared down at his bench. The defense wanted him to free this man of conscience. The prosecution asked that he put the coward away for two years to show other soldiers that “they are not fools for fulfilling their obligation.”

Aguayo craned to face the judge. “When I hear my sergeants talking about slashing people’s throats,” he said, crying openly, “if I’m not a conscientious objector, what am I when I’m feeling all this pain when people talk about violence?”

Next door in the press room, where reporters crowded to watch the proceedings on bleached, closed-circuit TVs, a soldier guarding the door wiped tears from his face.

An Iraqi official who heads the government committee tasked with inspecting detention facilities announced shocking figures this weekend, estimating the number of detainees held in US and Iraqi-run prisons at 67,000. The admission sparked the Iraqi government to release official numbers on Monday more in line with previous estimates.

According to Monday’s announcement, US and Iraqi prisons house a total of 42,000 detainees, precisely distributed between the two commands. “21,000 detainees are being held so far in the Multi-National forces’ detention centres and there are 21,000 others in Iraqi interior, justice and defense ministries’ jails,” Brigadier-General Abdul Karim Khalaf told the independent news agency Voices of Iraq (VOI).

However, Jasim Bahadeli, who leads an Iraqi government committee that inspects detention facilities, said this weekend that 36,000 detainees were held at US-run facilities, and 31,000 at Iraqi ones.

Bahadeli has been outspoken on the appalling conditions detainees are forced to endure, often for months without charge, but his criticisms are often dismissed as the unfortunate by-product of a justice system whose development is lagging.

If Bahadeli’s estimate of detainees is accurate, the implication that Iraq and US forces could be holding 20,000 more prisoners than they admit is damning. While his numbers may well be exaggerated, the figure the Iraqi government announced Monday is almost certainly underestimated.

Almost a year ago, in the small northern Louisiana town of Jena, a group of white students hung three nooses from a tree in front of Jena High School. This set into motion a season of racial tension and incidents that culminated in six Black youths facing a lifetime in jail for a schoolyard fight.

The story that has unfolded since then is one of racism and injustice, but also of resistance and solidarity, as people from around the world have joined together with the families of the accused, lending legal and financial support, adding political pressure, and joining demonstrations and marches.

The nooses were hung after a Black student asked permission to sit under a tree that had been reserved by tradition for white students only. In response to the three nooses, nearly every Black student in the school stood under the tree in a spontaneous and powerful act of nonviolent protest. The town’s district attorney quickly arrived, flanked by police officers, and told the Black students to stop making such a big deal over the nooses, which school officials termed to be a “harmless prank.” The school assembly, like the schoolyard where all of this had begun, was divided by race, with the Black students on one side and the white students on the other. Directing his remarks to the Black students, District Attorney Reed Walters said, “I can make your lives disappear with a stroke of a pen.”

The white students who confessed to hanging the nooses never received any meaningful punishment. Nor did the white students who months later beat up a Black student at a school party, nor did the white former student who threatened two Black students with a shotgun. But, after these incidents, when Black students got into a fight with a white student, six Black youths were charged with attempted murder, and now face a lifetime in prison. The Black students may not have been involved in the fight, but they were known to be organizers of the protest under the tree. The white student was briefly hospitalized, but had no major injuries and was socializing with friends at a school ring ceremony the evening of the fight.

The Black students were arrested immediately after the fight, in December of last year. School officials and police officials took statements from at least 44 witnesses to the fight. The statements do not paint a clear picture of who was involved. Statements from white students refer to “Black boys”, but many testimonies are unclear as to the identities of who was involved. Some of the arrested youths are not implicated in the fight by any of the witnesses.

Despite this, when Mychal Bell, the first youth to go to trial, refused to take a deal in exchange for testifying against his friends, he was quickly convicted by an all-white jury. Bell’s public defender Blane Williams, visibly angry at Bell and his parents because the youth did not take the deal, called no witnesses and gave no meaningful defense. This attorney’s behavior gives a vivid example of our nation’s broken and underfunded public defender system. Some have called Jena a throwback to the past, but in fact Jena presents a clear vision of the current state of our criminal justice system.

In Paris Texas, a white teenager burns down her family’s home and receives probation. A black one shoves a hall monitor and gets 7 years in prison. Genarlow Wilson, in Atlanta, is sentenced to ten years in prison for participating in consensual oral sex with a 15 year old when he was 17. Like these and many other cases, the case in Jena is textbook proof that there are still two systems of justice functioning in this country, one for Black people, and one for white. No serious observer can doubt that the students of Jena would never have faced charges if a Black student had been beaten instead of a white student. The unpunished incidents in the days and months leading up to the fight clearly demonstrate this.

Local Resistance

Immediately after the arrests, parents of the accused began organizing. Their call, “Free the Jena Six,” was initially heard by activists from other parts of Louisiana, such as the Lafayette public access TV show, “Community Defender,” which was the first media from outside their immediate area to give coverage of the case. Noncorporate and grassroots media has been vital in spreading word of the case, beginning with blogs and YouTube videos, which then led to high profile stories on Democracy Now and in The Final Call.

Lasalle parish, where Jena is located, is 85% white. The town is still mostly segregated – from the white barber who refuses to cut Black hair to the white and Black parts of town, separated by an invisible line. Lasalle is also one of Louisiana’s most wealthy parishes, with small oil rigs in many back yards contributing to area wealth. The parish is a major contributor to Republican politicians, and former klansman and Louisiana gubernatorial candidate David Duke received a solid majority of local votes. Jena was also the former site of a notoriously brutal youth prison, which was closed after years of lawsuits and negative media exposure. The prison is now scheduled to be reopened as a private prison for the growth business of immigrant detentions

Three hundred supporters, most from the immediate region, but some from as far away as California, Chicago and New York, descended on Jena on July 31 to protest District Attorney Reed Walters’ conduct and call for dismissal of all charges. The largest groups included Millions More Movement delegations from Houston, Monroe and Shreveport, nearly fifty members of Families and Friends of Louisiana’s Incarcerated Children from Lake Charles and New Orleans. Other delegations from across Louisiana included members of INCITE Women of Color Against Violence, Critical Resistance, Common Ground and Malcolm X Grassroots Movement. The demonstration marched through downtown Jena – reported to be the biggest civil rights march the town of 2,500 residents has ever seen – and delivered a petition with 43,000 signatures to the District Attorney’s office.

In the two weeks since the demonstration, more major allies have begun to come on board. The Congressional Black Caucus, representing 43 members, including Senator Barack Obama, issued a statement calling for charges to be dropped, while the city of Cambridge Massachusetts passed a resolution in support of the families of the Jena Six. Al Sharpton and other national leaders have visited Jena, while Jesse Jackson called members of the state legislative Black caucus on their behalf.

ColorOfChange.org, which has coordinated much of the outside support, has gathered 60,000 signatures on a petition to Louisiana Governor Blanco, calling for her to pardon the accused, and investigate District Attorney Reed Walters.

Blanco, a Democratic governor elected with the overwhelming support of Black residents of Louisiana, responded with a condescending statement, tersely informing petitioners, “The State Constitution provides for three branches of state government – Legislative, Executive, and Judicial – and the Constitution prohibits anyone in one branch from exercising the powers of anyone in another branch.” This is the same governor who, as Katrina approached, urged gulf coast residents to “pray the hurricane down” to a level two. When New Orleans was flooded and people were trapped in the New Orleans Superdome and convention center, she informed the nation that she was sending in National Guard troops, and “They have M-16s and they’re locked and loaded. These troops know how to shoot and kill, and they are more than willing to do so, and I expect they will.” More recently, Blanco created a program to bring federal money to homeowners rebuilding after Katrina–the “Road Home”–that has been a dismal failure on every level.

Mychal Bell’s sentencing is currently scheduled for September 20. The families are planning another demonstration for that date, and also have assembled a legal team for Bell and the other youths. National allies such as Southern Poverty Law Center and NAACP joined initial supporters such as Friends of Justice (from Tulia, Texas) and ACLU of Louisiana. Legal expenses for the youths could be hundreds of thousands of dollars, and funding is still needed. Except for Mychal Bell, who has a bail hearing scheduled for September 4, all of the youths are out on bail.

The case of Jena Six has served as a wake-up call on the state of US justice. It shows vividly the racial bias still inherent to our system. But is has also shown something else. That this group of families refuses to be silent in the face of injustice, and that hundreds of thousands of other people around the world have chosen to stand with them, and say that we are drawing the line, here, in Jena Louisiana.

Jordan Flaherty is an editor of Left Turn Magazine and a community organizer based in New Orleans. He can be reached at: neworleans@leftturn.org.

Resources

Donate to support the legal defense fund:
Jena 6 Defense Committee
PO BOX 2798
Jena, LA 71342

Donate online at: https://secure.colorofchange.org/jena_fund/
Sign the petition at: http://www.colorofchange.org/jena/

For more information or to offer concrete support, email:
jena6defense(at)gmail.com

Mychal Bell, who has been behind bars since December of 2006, has asked to receive letters from supporters. Please write to:

08/14/07 “FT” — – – The US government is on a ‘burning platform’ of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon, the country’s top government inspector has warned.

David Walker, comptroller general of the US, issued the unusually downbeat assessment of his country’s future in a report that lays out what he called “chilling long-term simulations”.

These include “dramatic” tax rises, slashed government services and the large-scale dumping by foreign governments of holdings of US debt.

Drawing parallels with the end of the Roman empire, Mr Walker warned there were “striking similarities” between America’s current situation and the factors that brought down Rome, including “declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government”.

“Sound familiar?” Mr Walker said. “In my view, it’s time to learn from history and take steps to ensure the American Republic is the first to stand the test of time.”
Mr Walker’s views carry weight because he is a non-partisan figure in charge of the Government Accountability Office, often described as the investigative arm of the US Congress.

While most of its studies are commissioned by legislators, about 10 per cent – such as the one containing his latest warnings – are initiated by the comptroller general himself.

In an interview with the Financial Times, Mr Walker said he had mentioned some of the issues before but now wanted to “turn up the volume”. Some of them were too sensitive for others in government to “have their name associated with”.

“I’m trying to sound an alarm and issue a wake-up call,” he said. “As comptroller general I’ve got an ability to look longer-range and take on issues that others may be hesitant, and in many cases may not be in a position, to take on.

“One of the concerns is obviously we are a great country but we face major sustainability challenges that we are not taking seriously enough,” said Mr Walker, who was appointed during the Clinton administration to the post, which carries a 15-year term.

The fiscal imbalance meant the US was “on a path toward an explosion of debt”.

“With the looming retirement of baby boomers, spiralling healthcare costs, plummeting savings rates and increasing reliance on foreign lenders, we face unprecedented fiscal risks,” said Mr Walker, a former senior executive at PwC auditing firm.

Current US policy on education, energy, the environment, immigration and Iraq also was on an “unsustainable path”.

“Our very prosperity is placing greater demands on our physical infrastructure. Billions of dollars will be needed to modernise everything from highways and airports to water and sewage systems. The recent bridge collapse in Minneapolis was a sobering wake-up call.”

Mr Walker said he would offer to brief the would-be presidential candidates next spring.

“They need to make fiscal responsibility and inter-generational equity one of their top priorities. If they do, I think we have a chance to turn this around but if they don’t, I think the risk of a serious crisis rises considerably”.

Someday, we will undoubtedly discover that, in the term “surge” — as in the President’s “surge” plan (or “new way forward”) announced to the nation in January — was the urge to avoid the language (and experience) of the Vietnam era. As there were to be no “body bags” (or cameras to film them as the dead came home), as there were to be no “body counts” (“We have made a conscious effort not to be a body-count team” was the way the President put it), as there were to be no “quagmires,” nor the need to search for that “light at the end of the tunnel,” so, surely, there were to be no “escalations.”

The escalations of the Vietnam era, which left more than 500,000 American soldiers and vast bases and massive air and naval power in and around Vietnam (Laos, and Cambodia), had been thoroughly discredited. Each intensification in the delivery of troops, or simply in ever-widening bombing campaigns, led only to more misery and death for the Vietnamese and disaster for the U.S. And yet, not surprisingly, the American experience in Iraq — another attempted occupation of a foreign country and culture — has been like a heat-seeking missile heading for the still-burning American memories of Vietnam.

As historian Marilyn Young noted in early April 2003 with the invasion of Iraq barely underway: “In less then two weeks, a 30 year old vocabulary is back: credibility gap, seek and destroy, hard to tell friend from foe, civilian interference in military affairs, the dominance of domestic politics, winning, or more often, losing hearts and minds.” By August 2003, the Bush administration, of course, expected that only perhaps 30,000 American troops would be left in Iraq, garrisoned on vast “enduring” bases in a pacified country. So, in a sense, it’s been a surge-a-thon ever since. By now, it’s beyond time to call the President’s “new way forward” by its Vietnamese equivalent. Admittedly, a “surge” does sound more comforting, less aggressive, less long-lasting, and somehow less harmful than an “escalation,” but the fact is that we are six months into the newest escalation of American power in Iraq. It has deposited all-time high numbers of troops there as well, undoubtedly, as more planes and firepower in and around that country than at any moment since the invasion of 2003. Naturally enough, other “all-time highs” of the grimmest sort follow.

This September, General David Petraeus, our escalation commander in Iraq, and Ryan Crocker, our escalation ambassador there, will present their “progress report” to Congress. (“Progress” was another word much favored in American official pronouncements of the Vietnam era.) The very name tells you more or less what to expect. The report has already been downgraded to a “snapshot” of an ongoing set of operations, which shouldn’t be truly judged or seriously assessed until at least this November, or perhaps early 2008, or…

With that in mind, here is the second Tomdispatch “by the numbers” report on Iraq. Consider it an attempt to put the Iraqi quagmire-cum-nightmare — two classic Vietnam-era words — in perspective.

Few numbers out of Iraq can be trusted. Counting accurately amid widespread disruption, mayhem, and bloodshed, under a failing occupation, in a land essentially lacking a central government, in a U.S. media landscape still dizzy from the endless spin of the Bush administration and its military commanders is probably next to impossible. But however approximate the figures that follow, they still offer an all-too-vivid picture of what the President’s much-desired invasion let loose. No country could suffer such uprooting, destruction, death, loss, and deprivation, yet remain collectively sane.

American civilian and military officials now talk about staying in Iraq through 2008, or 2009, or into the next decade, or for undefined but lengthening periods of time. And yet Iraq (by the numbers) has devolved month by month, year by year, for four-plus years. There was never any reason to believe that the latest escalation — or any future escalation, whatever it might be called, and whether accomplished via the U.S. military or by a growing shadow army of guns-for-hire employed by private-security firms — could be capable of anything but hurrying the pace of that devolution. So imagine what Iraq-by-the-numbers will be like in 2008 or 2009, given the clear determination of the Bush administration’s “strategic thinkers” to garrison that country into the distant future.

Here, then, is escalation in Iraq by the numbers — almost all of them continue to “surge” — as of mid-August 2008:

Number of American troops stationed in Iraq: 162,000 (plus at least several thousand government employees), an all-time high.

Estimated number of U.S.-(taxpayer)-paid private contractors in Iraq: More than 180,000, again undoubtedly an all-time high. That figure includes approximately 21,000 Americans, 43,000 non-Iraqi foreign contractors (including Chileans, Nepalese, Colombians, Indians, Fijians, El Salvadorans, and Filipinos among others), and 118,000 Iraqis, but does not include a complete count of “private security contractors who protect government officials and buildings,” according to State Department and Pentagon figures obtained by the Los Angeles Times.

Percentage of private contractors in total U.S. forces deployed in World War II and the Korean War: 3-5%, according to the Congressional testimony of human rights lawyer Scott Horton. In Vietnam and the first Gulf War, that figure reached 10%. Now, it is at least near parity.

Number of private companies working in Iraq on contract for the U.S. government: 630, with personnel from more than 100 countries, according to Jeremy Scahill, author of the bestselling Blackwater, The Rise of the World’s Most Powerful Mercenary Army.

Typical pay of a former U.S. Special Forces soldier working for a private-security company in Iraq: $650 a day, according to Scahill, “after the company takes its cut.” That rate, however, can hit $1,000 a day.

Number of trucks on the road each day as part of the U.S. resupply operation in Iraq: 3,000.

Number of attacks from June 2006 through May 2007 on U.S. supply convoys guarded by private-security contractors: 869, a near tripling from the previous twelve months.

Number of private contractors who have died in Iraq: Over 1,000, according to the U.S. Department of Labor, based on partial figures because private companies do not have to declare their war dead.

Predicted cost of a surge of 21,500 American troops into Iraq, according to White House calculations in January 2007: $5.6 billion, a figure offered the month the President’s surge strategy was announced.

Predicted cost of a one-year surge of 30,000-40,000 troops, according to Robert Sunshine, assistant director for budget analysis of the non-partisan Congressional Budget Office: $22 billion (two years for a cut-rate $40 billion). These figures were offered in testimony to Congress five months after the President’s surge was officially launched.