With New Surge, One Thousand U.S. Soldiers and $300 Million for Every One al Qaeda Fighter
By RICHARD ESPOSITO, MATTHEW COLE and BRIAN ROSS
December 03, 2009 "ABC News" - Dec. 2, 2009 — As he justified sending 30,000 more troops to Afghanistan at a cost of $30 billion a year, President Barack Obama's description Tuesday of the al Qaeda "cancer" in that country left out one key fact: U.S. intelligence officials have concluded there are only about 100 al Qaeda fighters in the entire country.
A senior U.S. intelligence official told ABCNews.com the approximate estimate of 100 al Qaeda members left in Afghanistan reflects the conclusion of American intelligence agencies and the Defense Department. The relatively small number was part of the intelligence passed on to the White House as President Obama conducted his deliberations.
President Obama made only a vague reference to the size of the al Qaeda presence in his speech at West Point, when he said, "al Qaeda has not reemerged in Afghanistan in the same number as before 9/11, but they retain their safe havens along the border."
A spokesperson at the White House's National Security Council, Chris Hensman, said he could not comment on intelligence matters.
Obama's National Security Adviser, Gen. James Jones, put the number at "fewer than a hundred" in an October interview with CNN.
Sen. Jeanne Shaheen, D-N.H., referred to the number at a Senate Foreign Relations Committee in October, saying "intelligence says about a hundred al Qaeda in Afghanistan."
As the President acknowledged, al Qaeda now operates from Pakistan where U.S. troops are prohibited from operating. "We're in Afghanistan to prevent a cancer from once again spreading through that country," he said.
Intelligence officials estimate there are several hundred al Qaeda fighters just across the border in Pakistan.
An Obama administration official said the additional troops were needed in Afghanistan to "sandwich" al Qaeda between Pakistan and Afghanistan and prevent them from re-establishing a safe haven in Afghanistan.
"Pakistan has been stepping up its efforts," the official said.
"So the real question is will Pakistan do enough," said former White House counter-terrorism official Richard Clarke, an ABC News consultant.
"What if they take all the money we given them but don't really follow through? What the strategy then?" said Clarke.
With 100,000 troops in Afghanistan at an estimated yearly cost of $30 billion, it means that for every one al Qaeda fighter, the U.S. will commit 1,000 troops and $300 million a year.
al Qaeda's Ideological Influence
Other counter-terror analysts say the actual number of al Qaeda in Afghanistan is less important than their ability to train others in the Taliban and have ideological influence.
"A hundred 'no foolin' al Qaeda operatives operating in a safe haven can do a hell of a lot of damage," said one former intelligence official with significant past experience in the region.
At a Senate hearing, the former CIA Pakistan station chief, Bob Grenier, testified al Qaeda had already been defeated in Afghanistan.
"So in terms of 'in Afghanistan,'" asked Sen. John Kerry, D-Mass., "they have been disrupted and dismantled and defeated. They're not in Afghanistan, correct?"
"That's true," replied Grenier.
Saturday, December 5, 2009
Friday, December 4, 2009
The U.S. Government Is Taking Us Down
By Jacob G. Hornberger
December 01, 2009 "fff" --- President Obama has decided to up the ante in Afghanistan by acceding to his generals’ request to send an additional 34,000 troops to that beleaguered nation. What better proof that those of us who opposed the initial invasion of Afghanistan were right? The decision to treat the 9/11 attacks as a military problem, rather than a criminal-justice one, has turned out to be one unmitigated disaster, a disaster that seemingly has no end.
After all, the occupation has now been going on for 8 years. Eight years of bombs, shootings, killing, maiming, secret prisons, arbitrary arrests, torture, indefinite incarcerations, and unrestrained power to search and seize.
And eight years of unrestrained spending on armaments, soldiers, and weaponry.
Where has it gotten the American people? Nothing but more anger and rage against them among Muslims all over the world, not to mention an ever-increasing mountain of debt that is sure to send America’s currency into a free-fall.
What will those additional troops do? They will kill and maim and incarcerate and torture people. That’s their job. Sure, they’ll call it pacifying the country, establishing law and order, spreading democracy, and waging the war on terrorism.
Yet, as they kill, maim, torture, and incarcerate more Afghanis, at the same time they will be producing more anger and rage against the United States among friends, relatives, and countrymen of the victims.
Moreover, since the victims in Afghanistan are predominantly Muslim, it is inevitable that Muslims all over the world will continue to perceive the U.S. occupation of Afghanistan (and Iraq) as a U.S. crusade against Islam. Denials by U.S. officials will continue to fall upon deaf ears within the Muslim community. With each new death at the hands of U.S. military personnel, the ranks of the terrorists will continue to swell, not just in Afghanistan but all over the world.
What began as an attempt to capture or kill Osama bin Laden has morphed into an involvement in a civil war. Those 34,000 troops aren’t being sent to Afghanistan to find bin Laden. They’re being sent there to kill people whose regime was ousted from power eight years ago and to maintain a crooked, corrupt, fraudulent, drug-pushing U.S. puppet regime in power.
We should also bear in mind that among the Afghanis who U.S. officials term “bad guys” are those Afghanis who simply are resisting the illegal occupation of their country by a foreign invader and occupier. There is a moral and just alternative to killing such people: Simply exit the country.
In fact, it would be interesting to know what percentage of Afghanis killed by the U.S. military during the past 8 years, including those wedding parties that are bombed from time to time, had anything to do with the 9/11 attacks. My hunch: 99.99 percent of the total number of Afghanis killed had absolutely nothing to do with the 9/11 attacks. Of course, we don’t know how many Afghanis have been killed because U.S. policy is to keep track only of Western casualties.
On top of all this is a simple financial fact: the longer the U.S. government occupies Afghanistan (and Iraq), the closer to national bankruptcy America comes. The additional troops are estimated to cost more than $30 billion dollars. That inevitably means double or triple that.
Yet, where is all that money coming from? We all know that ever since 9/11, U.S. officials have been spending much more than what the IRS is seizing from the taxpayers. To avoid taxpayer ire, they’ve been borrowing the difference, especially from the communist regime in China, which has become the U.S. government’s chief foreign lender.
The pro-empire, pro-intervention crowd is taking our country down. Today, they tell us that they’re trapped — that they have no choice — that in order to achieve “success,” they have to continue doing the same thing they’ve done for the past 8 years. If that’s not insane, what is?
America need not fear the terrorists or even a foreign invasion. The U.S. government is doing a fine job taking down our country all on its own.
December 01, 2009 "fff" --- President Obama has decided to up the ante in Afghanistan by acceding to his generals’ request to send an additional 34,000 troops to that beleaguered nation. What better proof that those of us who opposed the initial invasion of Afghanistan were right? The decision to treat the 9/11 attacks as a military problem, rather than a criminal-justice one, has turned out to be one unmitigated disaster, a disaster that seemingly has no end.
After all, the occupation has now been going on for 8 years. Eight years of bombs, shootings, killing, maiming, secret prisons, arbitrary arrests, torture, indefinite incarcerations, and unrestrained power to search and seize.
And eight years of unrestrained spending on armaments, soldiers, and weaponry.
Where has it gotten the American people? Nothing but more anger and rage against them among Muslims all over the world, not to mention an ever-increasing mountain of debt that is sure to send America’s currency into a free-fall.
What will those additional troops do? They will kill and maim and incarcerate and torture people. That’s their job. Sure, they’ll call it pacifying the country, establishing law and order, spreading democracy, and waging the war on terrorism.
Yet, as they kill, maim, torture, and incarcerate more Afghanis, at the same time they will be producing more anger and rage against the United States among friends, relatives, and countrymen of the victims.
Moreover, since the victims in Afghanistan are predominantly Muslim, it is inevitable that Muslims all over the world will continue to perceive the U.S. occupation of Afghanistan (and Iraq) as a U.S. crusade against Islam. Denials by U.S. officials will continue to fall upon deaf ears within the Muslim community. With each new death at the hands of U.S. military personnel, the ranks of the terrorists will continue to swell, not just in Afghanistan but all over the world.
What began as an attempt to capture or kill Osama bin Laden has morphed into an involvement in a civil war. Those 34,000 troops aren’t being sent to Afghanistan to find bin Laden. They’re being sent there to kill people whose regime was ousted from power eight years ago and to maintain a crooked, corrupt, fraudulent, drug-pushing U.S. puppet regime in power.
We should also bear in mind that among the Afghanis who U.S. officials term “bad guys” are those Afghanis who simply are resisting the illegal occupation of their country by a foreign invader and occupier. There is a moral and just alternative to killing such people: Simply exit the country.
In fact, it would be interesting to know what percentage of Afghanis killed by the U.S. military during the past 8 years, including those wedding parties that are bombed from time to time, had anything to do with the 9/11 attacks. My hunch: 99.99 percent of the total number of Afghanis killed had absolutely nothing to do with the 9/11 attacks. Of course, we don’t know how many Afghanis have been killed because U.S. policy is to keep track only of Western casualties.
On top of all this is a simple financial fact: the longer the U.S. government occupies Afghanistan (and Iraq), the closer to national bankruptcy America comes. The additional troops are estimated to cost more than $30 billion dollars. That inevitably means double or triple that.
Yet, where is all that money coming from? We all know that ever since 9/11, U.S. officials have been spending much more than what the IRS is seizing from the taxpayers. To avoid taxpayer ire, they’ve been borrowing the difference, especially from the communist regime in China, which has become the U.S. government’s chief foreign lender.
The pro-empire, pro-intervention crowd is taking our country down. Today, they tell us that they’re trapped — that they have no choice — that in order to achieve “success,” they have to continue doing the same thing they’ve done for the past 8 years. If that’s not insane, what is?
America need not fear the terrorists or even a foreign invasion. The U.S. government is doing a fine job taking down our country all on its own.
How Free-Market Delusions Destroyed the Economy
By Raj Patel
December 01, 2009 "Information Clearing House" -- If war is God’s way of teaching Americans geography, recession is His way of teaching everyone a little economics. The great unwinding of the financial sector showed that the smartest mathematical minds on the planet, backed by some of the deepest pockets, had not built a sleek engine of permanent prosperity but a clown car of trades, swaps and double dares that, inevitably, fell to bits. The recession has not come from a deficit of economic knowledge, but from too much of a particular kind, a surfeit of the spirit of capitalism. The dazzle of free markets has blinded us to other ways of seeing the world. As Oscar Wilde wrote over a century ago: "Nowadays people know the price of everything and the value of nothing." Prices have revealed themselves as fickle guides: The 2008 financial collapse came in the same year as crises in food and oil, and yet we seem unable to see or value our world except through the faulty prism of markets.
One thing is clear: The thinking that got us into this mess is unlikely to rescue us. It might come as some consolation to know that even some of the most respected minds have been forced to puzzle over their faulty assumptions. Perhaps the most pained admission of ignorance happened in a crowded room in front of the House Committee on Oversight and Government Reform when, on October 23, 2008, Alan Greenspan described the failure of his worldview.
Greenspan was one of the acknowledged legislators of the world’s economy over the past nineteen years in his role as chairman of the Federal Reserve. A card-carrying member of the free market brigade, he used to sit at the feet of Ayn Rand who, although largely unknown outside the United States, remains influential long after her death in 1982. Her 1957 book Atlas Shrugged, in which heroic business moguls fight the scourge of government officials and union organizers, has once again scaled the bestseller lists. Regarding altruism as “moral cannibalism," Rand was the cheerleader for an extreme free market libertarian school of thought, which she called “Objectivism."
Drawn into her circle by this heady philosophy, Greenspan earned himself the nickname “the Undertaker" for his jolly demeanor and dress sense. When Greenspan chose a career in government, it was rather like a hippie joining the marines, a lapse that his former friends could never forgive. Despite this, Greenspan remained largely faithful to Rand's philosophy, continuing to believe that egoism would lead to the best of all possible worlds, and that any form of restraint would result in disaster.
At the end of 2008, Greenspan was summoned to the U.S. Congress to testify about the financial crisis. His tenure at the Fed had been long and lauded, and Congress wanted to know what had gone wrong. As he began to read his testimony, Greenspan looked exhausted, his skin jowly and sagging, as if the vigor that once kept him taut had all been spent. But he came out swinging. In the first round, he took aim at the information he’d been working with. If only the input had been right, the economic models would have worked, and the predictions would have been better. In his words, a Nobel Prize was awarded for the discovery of the pricing model that underpins much of the advance in derivatives markets. This modern risk management paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year because the data inputted into the risk management models generally covered only the past two decades, a period of euphoria.
Had instead the models been fitted more appropriately to historic periods of stress, capital requirements would have been much higher and the financial world would be in far better shape today, in my judgment.
This is a garbage-in-garbage-out argument: The model worked just fine, but the assumptions about risk and data, based only on the good times past, were faulty and so the output was correspondingly wrong. Greenspan’s nemesis on the panel, Henry Waxman, pushed him to a deeper conclusion, in this remarkable exchange:
Waxman: The question I have for you is, you had an ideology, you had a belief that free, competitive -- and this is your statement -- “I do have an ideology. My judgment is that free, competitive markets are by far the unrivalled way to organize economies. We have tried regulation, none meaningfully worked.” That was your quote. You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others. And now our whole economy is paying the price. Do you feel that your ideology pushed you to make decisions that you wish you had not made?
Greenspan: Well, remember, though, what an ideology is. It’s a conceptual framework with [sic] the way people deal with reality. Everyone has one. You have to. To exist, you need an ideology. The question is, whether it is accurate or not. What I am saying to you is, yes, I found the flaw, I don’t know how significant or permanent it is, but I have been very distressed by that fact.
Waxman: You found a flaw?
Greenspan: I found a flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.
Waxman: In other words, you found that your view of the world, your ideology, was not right, it was not working.
Greenspan: Precisely. That is precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.
The flaw, to be clear, wasn’t a minor one of shoddy data. Nor was it the bigger Black Swan problem that writers like Nassim Taleb discuss, a problem of failing to account for highly unlikely events that, should they happen, involve catastrophic consequences. Greenspan’s flaw was more fundamental still. It warped his view about how the world was organized, about the sociology of the market. And Greenspan is not alone. Larry Summers, the president’s senior economic advisor, has had to come to terms with a similar error -- his view that the market was inherently self-stabilizing has been "dealt a fatal blow." Hank Paulson, Bush’s Treasury Secretary, has shrugged his shoulders with similar resignation. Even Jim Cramer from CNBC’s "Mad Money" admitted defeat: "The only guy who really called this right was Karl Marx." One after the other, the celebrants of the free market are finding themselves, to use the language of the market, corrected.
The extent of Greenspan's admission has passed most of us by. If you trawl the oped pages of the financial press, you'll find plenty of analysis that fits Greenspan's first gambit, with pundits offering stories about how risk was incorrectly priced (which it was), how the lack of regulation allowed the panic to feed back into the financial system (which it has), how the incentive structures rewarded traders who were able to push financial risk far into the future (which they did) and how free market ideologues removed the sorts of circuit-breaking policies that might today have helped (and they did that too). But these are all it-could-have-been-fixed-if-we'd-planned-better responses. I am not sure that we're able to comprehend what Greenspan's admission might really mean for us. It would be too big a shock to have the fundamentals of policy in both government and the economy proved wrong, and to have nothing with which to replace them.
It's as if one day, you were to wake up and find yourself transformed into a cockroach. This is the premise of Franz Kafka's novella Metamorphosis. In the first sentence, a young salesman named Gregor Samsa wakes up, after a night of bad dreams, to find that he has turned into an enormous bug. Gregor Samsa's response is revealing, telling us a little bit more about ourselves than we'd like. For what does Samsa do when he discovers he's a bug? He doesn't scuttle from his room screaming, or ponder how this happened, or what his transformation means, and what he might become tomorrow. His response is essentially this: "Poor me! How am I going to keep my job?" Which is almost exactly how we've reacted to this economic crisis. While no one has yet woken up in the body of a bug, we have all found ourselves in a world turned upside down, where everything we were told was to our advantage has turned out to be its opposite. Greenspan's "flaw" has profound repercussions -- to understand it fully would mean a complete reappraisal of the way we conduct our lives. We would need not only a new way of mooring our expectations of our society and our economy, one based on richer assumptions about human nature, but also a different ideology governing the exchange of goods and services.
Prices do some heavy ideological lifting in Greenspan's world. They provide a way to see and know the collective wants and resources of our small planet. This is Friedrich Hayek's economic philosophy, in which prices are the tendrils through which wants and needs are communicated. Science fiction fans will already be familiar with what this looks like. In "The Matrix," liberated humans (and the programs who hunt them) can see the world in its raw form, as a digital rain of symbols and signs. This is the science fiction that governs economic fact. Data pelting down monitors is what the masters of the universe on the global financial exchanges stare at, their eyes darting from screen to screen, trying to see through the world and profit from it. In "The Matrix," the signs were a simulation of the real world, hiding more than they revealed. The trouble is that this unreliable digital ticker tape has now become a central prop in the drama of modern commerce.
Consider the fate of Volkswagen, which at the end of October 2008 managed briefly to become the world's most valuable corporation without having to sell a single vehicle. With the economy still in free fall, traders on stock market floors were taking a dim view of Volkswagen. They looked at their screens and concluded that, just like every other auto manufacturer, Volkswagen was heading for tough times. Imagine you're a trader who feels in your bones that the stock price can only fall. One way to cash your hunch in is to sell Volkswagen stock today, and buy it back when the price falls. Since you don't walk around with Volkswagen stock falling out of your pockets, you'll turn to someone who does, like an institutional investor. You borrow their stock, for a price, and promise to return all of it very soon. The institutional investor is happy because they make money from lending out the stock, which they will get back in one piece. You're happy because you can sell this stock, wait for the price to fall, buy it back and, with the profit, not only pay back the institutional investor, but make the next installment on your yacht in Monaco. This practice is called "shorting."
The trouble was that Volkswagen's rival, Porsche, had started quietly buying Volkswagen stock, aiming to secure 75 percent of the company. When the scale of Porsche's buying spree came to light, it became rapidly clear that there was little of the company left to trade. With Porsche sucking up all the shares, the price for Volkswagen didn't drop. Traders were selling borrowed stock to Porsche, and when Porsche announced its intentions to hold the stock, traders panicked. This led to a "short squeeze," a flocking of investors looking to cover the ill-conceived bets that they'd paid for with stock that they didn't own. They'd wagered that Volkswagen's price, like that of any other car company in a recession, would fall. When it became clear that even if Volkswagen wasn't doing well in the car market, its share price was nonetheless defying gravity, the speculators rushed to buy before the price went any higher.
Their combined purchases drove the price of shares up further. So high did the price rise that Volkswagen entered the DAX 30 index of the largest corporations on the German bourse. This triggered another buying spree, driven not by stock market gamblers, but by their polar opposites -- conservative institutional investors. Pension funds, for instance, invest with an eye to long-term returns; they prefer a slow and certain accumulation of wealth rather than risky bets. One way that they keep their portfolio on an even keel is to buy shares in nothing but blue chip corporations, ones that are guaranteed to be least susceptible to the shocks that stocks are heir to, ones that are in the top, say, thirty corporations traded in the open market. When Volkswagen joined the ranks of the DAX 30, a flock of institutional investors automatically wanted in. So they bought Volkswagen shares at what ever price they could find them. The result? The price per share went from 200 to 1,000 in a week--an increase in company value of 300 billion (244 billion; $386 billion). It made Volkswagen, briefly, bigger than ExxonMobil (with a book value of a mere $343 billion). And for this, the company didn't raise a finger.
In the end, the rules on the DAX were changed, the price settled down and, in 2009, Volkswagen bought Porsche. It is easy enough to tell this story as one where institutional investors got caught with their pants down, where there was imperfect information about the size of the market, where the rules of different short-run and long-run games tangled. But look more closely. Underwriting this version of the story is a conceptual structure that lies beneath every story of excess and crash. The very notion of a bubble relies on the premise that when the bubble pops, things return to a normal state, a situation of price reflecting value more accurately. This is the story told after every boom and bust, from the South Sea Bubble of 1720 to the housing catastrophe of 2008. There's a widely shared opinion that normality will ultimately return to the world economy--but it's a consensus view that rests on a story where bubbles are exceptions to the standard (and successful) procedures of market valuation. If those procedures themselves were flawed, as Greenspan suggests, then our faith in a gentle return to earth is misplaced, for there is and never has been any solid ground beneath our feet.
There is a discrepancy between the price of something and its value, one that economists cannot fix, because it's a problem inherent to the very idea of profit-driven prices. This gap is something about which we've got an uneasy and uncomfortable intuition. The uncertainty about prices is what makes the MasterCard ads amusing. You know how it goes -- green fees: $240; lessons: $50; golf club: $110; having fun: priceless. The deeper joke, though, is this: The price of something doesn't measure its value at all. This prickly intuition has become entertainment. An alien from another planet would find it strange that one of the most popular TV shows in dozens of countries is one that trades on the confusion around what something's worth: "The Price Is Right." In the show, the audience is presented with various consumer durables, and asked to guess the retail price of each. Crucially, you don't win by correctly guessing how useful something is or how much it costs to make -- prices are poor guides to use and true costs of production. You win by developing an intuitive sense of what corporations believe you're willing to pay.
In the world of fund management, the systematic confusion surrounding what something is worth has made some people very rich. Traders' salaries are linked to the returns above expected rates for the risk they take on, the so-called alpha that they contribute to the returns. Think of a bet on a coin flip, with odds of two to one. I bet $1 that I will hit heads, and every time I do, I get $2. In the long run, I'd expect a dollar bet with those odds to return a dollar because I'll come up heads about half the time. But if I'm returning $1.50 on the bet, I'm making magic happen. This magic gets turned back into coins that I get to keep, through bonuses and increased salary. This is a tough trick to pull off because there are only a handful of ways to create added value in fund management -- I can pick undervalued stocks that outperform expectations, I can nurture innovations that change the rules of the game, or I can create new bespoke assets that institutional investors might like.
So we would expect alpha to be rare, and it is, but driven by the desire to cash in, there were many who created fake alpha through bets that appeared to produce consistently good returns despite having a small built-in chance of catastrophic loss. If the expected value of this loss were factored in, the alpha would disappear. But the risks were ignored and bonuses flowed. The frat boys who ran the economy, and profited from its poor regulation, made billions. They were paid today for outcomes that they predicted would happen in the future, using a "mark to model" accounting practice that essentially allowed them to book today what they projected they'd earn tomorrow. This practice was justified on the grounds that "markets know best."
That markets should know best is a relatively recent article of faith, and it took a great deal of ideological and political work to make it part of governments' conventional wisdom. The idea that markets are smart found its apotheosis in the Efficient Markets Hypothesis, an idea first formulated by Eugene Fama, a Ph.D. student in the University of Chicago Business School in the 1960s. In the ideological foundations it provided for financiers, it was a mighty force -- think of it as Atlas Shrugged, but with more equations.
The hypothesis states that the price of a financial asset reflects everything that a market knows about its current and future prospects. This is different from saying that the price actually does reflect its future performance -- rather, the price reflects the current state of beliefs about the odds of that performance being good or bad. The price involves a bet. As we now know, the market's eye for odds is dangerously myopic, but the hypothesis explains why economists find the following joke funny:
Q: How many Chicago School economists does it take to change a lightbulb?
A: None. If the lightbulb needed changing, the market would have already done it.
The problem with the Efficient Markets Hypothesis is that it doesn't work. If it were true, then there'd be no incentive to invest in research because the market would, by magic, have beaten you to it. Economists Sanford Grossman and Joseph Stiglitz demonstrated this in 1980, and hundreds of subsequent studies have pointed out quite how unrealistic the hypothesis is, some of the most influential of which were written by Eugene Fama himself. Markets can behave irrationally -- investors can herd behind a stock, pushing its value up in ways entirely unrelated to the stock being traded. Despite ample economic evidence to suggest it was false, the idea of efficient markets ran riot through governments. Alan Greenspan was not the only person to find the hypothesis a convenient untruth.
By pushing regulators to behave as if the hypothesis were true, traders could make their titanic bets. For a while, the money rolled in. In the mid-1990s, the Financial Times felt able to launch a monthly supplement, titled "How to Spend It," to help its more affluent readers unburden themselves. The magic of the past decade's boom also touched the middle class, who were sucked into the bubble through houses that were turned from places of shelter into financial assets, and into grist for the mill of the financial sector. But ordinary homeowners couldn't muster the clout that banks could: Governments enabled the finance sector's binge by promising to be there to pick up the pieces, and they were as good as their word. When the financiers' bets broke the system, the profit that they made from these bad bets remained untouchable: The profit was privatized, but the risk was socialized. Their riches have cost the whole world dear, and yet in 2009 the top hedge fund managers have had their third best year on record. George Soros is, in his own words, "having a very good crisis," and staff at Goldman Sachs can look forward to the largest bonus payouts in the firm's 140-year history.
What this suggests is that the rhetoric of "free markets" camouflages activities that aren't about markets at all. Goldman Sachs employees are doing well because their firm turned some distinctly nonmarket tricks. Rolling Stone journalist Matt Taibbi has recently revealed, with characteristic verve, how Goldman Sachs has bought the U.S. government. In the Obama administration's economic team, Wall Street has a generation of finance-friendly appointees, from Treasury Secretary Tim Geithner, who arranged a historic $29 billion loan to persuade JPMorgan Chase to acquire Bear Stearns during his tenure as chair of the Federal Reserve Bank of New York; to Larry Summers, who earned $5.2 million by working one day a week for a couple of years in a large Wall Street hedge fund. Their new positions in the White House make them the Tarzans of the economic jungle. Wall Street has reason to be pleased. Goldman had invested heavily in AIG, the insurance giant whose financial products division had brought the 90-year-old giant to bankruptcy. With the 2008 AIG rescue, the $13 billion that Goldman invested was repaid at full face value. Investors in Chrysler, by contrast, stand to get 29 cents for every dollar they invested.
Anyone concerned with democracy should be worried that the seam between Wall Street and the government is almost invisible. At the very least, it raises serious reasons to doubt that the institutions that facilitated the crisis can clean up their mess. Nassim Taleb points to the absurdity here: "People who were driving a school bus (blindfolded) and crashed it should never be given a new bus." The problem is that because both our economy and to a larger extent our politicians aren't really subject to democratic control, the bus drivers are always going to be graduates of the same driving school.
Despite the ongoing hijack of government by Wall Street, a word that hasn't been heard in over a generation is being uttered by politicians: "regulation." It's true that Goldman Sachs and others are profiting handsomely from the collapse, but there is nonetheless a growing sense among politicians that the market may have been allowed too free a rein. Naomi Klein's devastating critique The Shock Doctrine demonstrates how disasters were turned into platforms for rabidly free market policies, and it's an analysis that explains the post-World War II era and today's ongoing financial plunder, from California to Wall Street to the City of London, very well. But there is a recognition among the public and some politicians that today's economic crisis is a failure of free market thinking, and not a warrant for more. In response to popular outcry, politicians around the world seem ready to discuss how to regulate and restrain the market. The question is, can they, and, if they can, in whose interests will this regulation work?
From its inception, the free market has spawned discontent, but rare are the moments when that discontent coalesces across society, when a sufficiently large group of people can trace their unhappiness to free market politics, and demand change. The New Deal in the United States and the postwar European welfare states were partly a result of a consortium of social forces pushing for new limits to markets, and a renegotiation of the relationship between individuals and society. What's new about this crisis is that it's pervasively global, and comes at the last moment at which we might prevent a global climate catastrophe.
December 01, 2009 "Information Clearing House" -- If war is God’s way of teaching Americans geography, recession is His way of teaching everyone a little economics. The great unwinding of the financial sector showed that the smartest mathematical minds on the planet, backed by some of the deepest pockets, had not built a sleek engine of permanent prosperity but a clown car of trades, swaps and double dares that, inevitably, fell to bits. The recession has not come from a deficit of economic knowledge, but from too much of a particular kind, a surfeit of the spirit of capitalism. The dazzle of free markets has blinded us to other ways of seeing the world. As Oscar Wilde wrote over a century ago: "Nowadays people know the price of everything and the value of nothing." Prices have revealed themselves as fickle guides: The 2008 financial collapse came in the same year as crises in food and oil, and yet we seem unable to see or value our world except through the faulty prism of markets.
One thing is clear: The thinking that got us into this mess is unlikely to rescue us. It might come as some consolation to know that even some of the most respected minds have been forced to puzzle over their faulty assumptions. Perhaps the most pained admission of ignorance happened in a crowded room in front of the House Committee on Oversight and Government Reform when, on October 23, 2008, Alan Greenspan described the failure of his worldview.
Greenspan was one of the acknowledged legislators of the world’s economy over the past nineteen years in his role as chairman of the Federal Reserve. A card-carrying member of the free market brigade, he used to sit at the feet of Ayn Rand who, although largely unknown outside the United States, remains influential long after her death in 1982. Her 1957 book Atlas Shrugged, in which heroic business moguls fight the scourge of government officials and union organizers, has once again scaled the bestseller lists. Regarding altruism as “moral cannibalism," Rand was the cheerleader for an extreme free market libertarian school of thought, which she called “Objectivism."
Drawn into her circle by this heady philosophy, Greenspan earned himself the nickname “the Undertaker" for his jolly demeanor and dress sense. When Greenspan chose a career in government, it was rather like a hippie joining the marines, a lapse that his former friends could never forgive. Despite this, Greenspan remained largely faithful to Rand's philosophy, continuing to believe that egoism would lead to the best of all possible worlds, and that any form of restraint would result in disaster.
At the end of 2008, Greenspan was summoned to the U.S. Congress to testify about the financial crisis. His tenure at the Fed had been long and lauded, and Congress wanted to know what had gone wrong. As he began to read his testimony, Greenspan looked exhausted, his skin jowly and sagging, as if the vigor that once kept him taut had all been spent. But he came out swinging. In the first round, he took aim at the information he’d been working with. If only the input had been right, the economic models would have worked, and the predictions would have been better. In his words, a Nobel Prize was awarded for the discovery of the pricing model that underpins much of the advance in derivatives markets. This modern risk management paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year because the data inputted into the risk management models generally covered only the past two decades, a period of euphoria.
Had instead the models been fitted more appropriately to historic periods of stress, capital requirements would have been much higher and the financial world would be in far better shape today, in my judgment.
This is a garbage-in-garbage-out argument: The model worked just fine, but the assumptions about risk and data, based only on the good times past, were faulty and so the output was correspondingly wrong. Greenspan’s nemesis on the panel, Henry Waxman, pushed him to a deeper conclusion, in this remarkable exchange:
Waxman: The question I have for you is, you had an ideology, you had a belief that free, competitive -- and this is your statement -- “I do have an ideology. My judgment is that free, competitive markets are by far the unrivalled way to organize economies. We have tried regulation, none meaningfully worked.” That was your quote. You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others. And now our whole economy is paying the price. Do you feel that your ideology pushed you to make decisions that you wish you had not made?
Greenspan: Well, remember, though, what an ideology is. It’s a conceptual framework with [sic] the way people deal with reality. Everyone has one. You have to. To exist, you need an ideology. The question is, whether it is accurate or not. What I am saying to you is, yes, I found the flaw, I don’t know how significant or permanent it is, but I have been very distressed by that fact.
Waxman: You found a flaw?
Greenspan: I found a flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.
Waxman: In other words, you found that your view of the world, your ideology, was not right, it was not working.
Greenspan: Precisely. That is precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.
The flaw, to be clear, wasn’t a minor one of shoddy data. Nor was it the bigger Black Swan problem that writers like Nassim Taleb discuss, a problem of failing to account for highly unlikely events that, should they happen, involve catastrophic consequences. Greenspan’s flaw was more fundamental still. It warped his view about how the world was organized, about the sociology of the market. And Greenspan is not alone. Larry Summers, the president’s senior economic advisor, has had to come to terms with a similar error -- his view that the market was inherently self-stabilizing has been "dealt a fatal blow." Hank Paulson, Bush’s Treasury Secretary, has shrugged his shoulders with similar resignation. Even Jim Cramer from CNBC’s "Mad Money" admitted defeat: "The only guy who really called this right was Karl Marx." One after the other, the celebrants of the free market are finding themselves, to use the language of the market, corrected.
The extent of Greenspan's admission has passed most of us by. If you trawl the oped pages of the financial press, you'll find plenty of analysis that fits Greenspan's first gambit, with pundits offering stories about how risk was incorrectly priced (which it was), how the lack of regulation allowed the panic to feed back into the financial system (which it has), how the incentive structures rewarded traders who were able to push financial risk far into the future (which they did) and how free market ideologues removed the sorts of circuit-breaking policies that might today have helped (and they did that too). But these are all it-could-have-been-fixed-if-we'd-planned-better responses. I am not sure that we're able to comprehend what Greenspan's admission might really mean for us. It would be too big a shock to have the fundamentals of policy in both government and the economy proved wrong, and to have nothing with which to replace them.
It's as if one day, you were to wake up and find yourself transformed into a cockroach. This is the premise of Franz Kafka's novella Metamorphosis. In the first sentence, a young salesman named Gregor Samsa wakes up, after a night of bad dreams, to find that he has turned into an enormous bug. Gregor Samsa's response is revealing, telling us a little bit more about ourselves than we'd like. For what does Samsa do when he discovers he's a bug? He doesn't scuttle from his room screaming, or ponder how this happened, or what his transformation means, and what he might become tomorrow. His response is essentially this: "Poor me! How am I going to keep my job?" Which is almost exactly how we've reacted to this economic crisis. While no one has yet woken up in the body of a bug, we have all found ourselves in a world turned upside down, where everything we were told was to our advantage has turned out to be its opposite. Greenspan's "flaw" has profound repercussions -- to understand it fully would mean a complete reappraisal of the way we conduct our lives. We would need not only a new way of mooring our expectations of our society and our economy, one based on richer assumptions about human nature, but also a different ideology governing the exchange of goods and services.
Prices do some heavy ideological lifting in Greenspan's world. They provide a way to see and know the collective wants and resources of our small planet. This is Friedrich Hayek's economic philosophy, in which prices are the tendrils through which wants and needs are communicated. Science fiction fans will already be familiar with what this looks like. In "The Matrix," liberated humans (and the programs who hunt them) can see the world in its raw form, as a digital rain of symbols and signs. This is the science fiction that governs economic fact. Data pelting down monitors is what the masters of the universe on the global financial exchanges stare at, their eyes darting from screen to screen, trying to see through the world and profit from it. In "The Matrix," the signs were a simulation of the real world, hiding more than they revealed. The trouble is that this unreliable digital ticker tape has now become a central prop in the drama of modern commerce.
Consider the fate of Volkswagen, which at the end of October 2008 managed briefly to become the world's most valuable corporation without having to sell a single vehicle. With the economy still in free fall, traders on stock market floors were taking a dim view of Volkswagen. They looked at their screens and concluded that, just like every other auto manufacturer, Volkswagen was heading for tough times. Imagine you're a trader who feels in your bones that the stock price can only fall. One way to cash your hunch in is to sell Volkswagen stock today, and buy it back when the price falls. Since you don't walk around with Volkswagen stock falling out of your pockets, you'll turn to someone who does, like an institutional investor. You borrow their stock, for a price, and promise to return all of it very soon. The institutional investor is happy because they make money from lending out the stock, which they will get back in one piece. You're happy because you can sell this stock, wait for the price to fall, buy it back and, with the profit, not only pay back the institutional investor, but make the next installment on your yacht in Monaco. This practice is called "shorting."
The trouble was that Volkswagen's rival, Porsche, had started quietly buying Volkswagen stock, aiming to secure 75 percent of the company. When the scale of Porsche's buying spree came to light, it became rapidly clear that there was little of the company left to trade. With Porsche sucking up all the shares, the price for Volkswagen didn't drop. Traders were selling borrowed stock to Porsche, and when Porsche announced its intentions to hold the stock, traders panicked. This led to a "short squeeze," a flocking of investors looking to cover the ill-conceived bets that they'd paid for with stock that they didn't own. They'd wagered that Volkswagen's price, like that of any other car company in a recession, would fall. When it became clear that even if Volkswagen wasn't doing well in the car market, its share price was nonetheless defying gravity, the speculators rushed to buy before the price went any higher.
Their combined purchases drove the price of shares up further. So high did the price rise that Volkswagen entered the DAX 30 index of the largest corporations on the German bourse. This triggered another buying spree, driven not by stock market gamblers, but by their polar opposites -- conservative institutional investors. Pension funds, for instance, invest with an eye to long-term returns; they prefer a slow and certain accumulation of wealth rather than risky bets. One way that they keep their portfolio on an even keel is to buy shares in nothing but blue chip corporations, ones that are guaranteed to be least susceptible to the shocks that stocks are heir to, ones that are in the top, say, thirty corporations traded in the open market. When Volkswagen joined the ranks of the DAX 30, a flock of institutional investors automatically wanted in. So they bought Volkswagen shares at what ever price they could find them. The result? The price per share went from 200 to 1,000 in a week--an increase in company value of 300 billion (244 billion; $386 billion). It made Volkswagen, briefly, bigger than ExxonMobil (with a book value of a mere $343 billion). And for this, the company didn't raise a finger.
In the end, the rules on the DAX were changed, the price settled down and, in 2009, Volkswagen bought Porsche. It is easy enough to tell this story as one where institutional investors got caught with their pants down, where there was imperfect information about the size of the market, where the rules of different short-run and long-run games tangled. But look more closely. Underwriting this version of the story is a conceptual structure that lies beneath every story of excess and crash. The very notion of a bubble relies on the premise that when the bubble pops, things return to a normal state, a situation of price reflecting value more accurately. This is the story told after every boom and bust, from the South Sea Bubble of 1720 to the housing catastrophe of 2008. There's a widely shared opinion that normality will ultimately return to the world economy--but it's a consensus view that rests on a story where bubbles are exceptions to the standard (and successful) procedures of market valuation. If those procedures themselves were flawed, as Greenspan suggests, then our faith in a gentle return to earth is misplaced, for there is and never has been any solid ground beneath our feet.
There is a discrepancy between the price of something and its value, one that economists cannot fix, because it's a problem inherent to the very idea of profit-driven prices. This gap is something about which we've got an uneasy and uncomfortable intuition. The uncertainty about prices is what makes the MasterCard ads amusing. You know how it goes -- green fees: $240; lessons: $50; golf club: $110; having fun: priceless. The deeper joke, though, is this: The price of something doesn't measure its value at all. This prickly intuition has become entertainment. An alien from another planet would find it strange that one of the most popular TV shows in dozens of countries is one that trades on the confusion around what something's worth: "The Price Is Right." In the show, the audience is presented with various consumer durables, and asked to guess the retail price of each. Crucially, you don't win by correctly guessing how useful something is or how much it costs to make -- prices are poor guides to use and true costs of production. You win by developing an intuitive sense of what corporations believe you're willing to pay.
In the world of fund management, the systematic confusion surrounding what something is worth has made some people very rich. Traders' salaries are linked to the returns above expected rates for the risk they take on, the so-called alpha that they contribute to the returns. Think of a bet on a coin flip, with odds of two to one. I bet $1 that I will hit heads, and every time I do, I get $2. In the long run, I'd expect a dollar bet with those odds to return a dollar because I'll come up heads about half the time. But if I'm returning $1.50 on the bet, I'm making magic happen. This magic gets turned back into coins that I get to keep, through bonuses and increased salary. This is a tough trick to pull off because there are only a handful of ways to create added value in fund management -- I can pick undervalued stocks that outperform expectations, I can nurture innovations that change the rules of the game, or I can create new bespoke assets that institutional investors might like.
So we would expect alpha to be rare, and it is, but driven by the desire to cash in, there were many who created fake alpha through bets that appeared to produce consistently good returns despite having a small built-in chance of catastrophic loss. If the expected value of this loss were factored in, the alpha would disappear. But the risks were ignored and bonuses flowed. The frat boys who ran the economy, and profited from its poor regulation, made billions. They were paid today for outcomes that they predicted would happen in the future, using a "mark to model" accounting practice that essentially allowed them to book today what they projected they'd earn tomorrow. This practice was justified on the grounds that "markets know best."
That markets should know best is a relatively recent article of faith, and it took a great deal of ideological and political work to make it part of governments' conventional wisdom. The idea that markets are smart found its apotheosis in the Efficient Markets Hypothesis, an idea first formulated by Eugene Fama, a Ph.D. student in the University of Chicago Business School in the 1960s. In the ideological foundations it provided for financiers, it was a mighty force -- think of it as Atlas Shrugged, but with more equations.
The hypothesis states that the price of a financial asset reflects everything that a market knows about its current and future prospects. This is different from saying that the price actually does reflect its future performance -- rather, the price reflects the current state of beliefs about the odds of that performance being good or bad. The price involves a bet. As we now know, the market's eye for odds is dangerously myopic, but the hypothesis explains why economists find the following joke funny:
Q: How many Chicago School economists does it take to change a lightbulb?
A: None. If the lightbulb needed changing, the market would have already done it.
The problem with the Efficient Markets Hypothesis is that it doesn't work. If it were true, then there'd be no incentive to invest in research because the market would, by magic, have beaten you to it. Economists Sanford Grossman and Joseph Stiglitz demonstrated this in 1980, and hundreds of subsequent studies have pointed out quite how unrealistic the hypothesis is, some of the most influential of which were written by Eugene Fama himself. Markets can behave irrationally -- investors can herd behind a stock, pushing its value up in ways entirely unrelated to the stock being traded. Despite ample economic evidence to suggest it was false, the idea of efficient markets ran riot through governments. Alan Greenspan was not the only person to find the hypothesis a convenient untruth.
By pushing regulators to behave as if the hypothesis were true, traders could make their titanic bets. For a while, the money rolled in. In the mid-1990s, the Financial Times felt able to launch a monthly supplement, titled "How to Spend It," to help its more affluent readers unburden themselves. The magic of the past decade's boom also touched the middle class, who were sucked into the bubble through houses that were turned from places of shelter into financial assets, and into grist for the mill of the financial sector. But ordinary homeowners couldn't muster the clout that banks could: Governments enabled the finance sector's binge by promising to be there to pick up the pieces, and they were as good as their word. When the financiers' bets broke the system, the profit that they made from these bad bets remained untouchable: The profit was privatized, but the risk was socialized. Their riches have cost the whole world dear, and yet in 2009 the top hedge fund managers have had their third best year on record. George Soros is, in his own words, "having a very good crisis," and staff at Goldman Sachs can look forward to the largest bonus payouts in the firm's 140-year history.
What this suggests is that the rhetoric of "free markets" camouflages activities that aren't about markets at all. Goldman Sachs employees are doing well because their firm turned some distinctly nonmarket tricks. Rolling Stone journalist Matt Taibbi has recently revealed, with characteristic verve, how Goldman Sachs has bought the U.S. government. In the Obama administration's economic team, Wall Street has a generation of finance-friendly appointees, from Treasury Secretary Tim Geithner, who arranged a historic $29 billion loan to persuade JPMorgan Chase to acquire Bear Stearns during his tenure as chair of the Federal Reserve Bank of New York; to Larry Summers, who earned $5.2 million by working one day a week for a couple of years in a large Wall Street hedge fund. Their new positions in the White House make them the Tarzans of the economic jungle. Wall Street has reason to be pleased. Goldman had invested heavily in AIG, the insurance giant whose financial products division had brought the 90-year-old giant to bankruptcy. With the 2008 AIG rescue, the $13 billion that Goldman invested was repaid at full face value. Investors in Chrysler, by contrast, stand to get 29 cents for every dollar they invested.
Anyone concerned with democracy should be worried that the seam between Wall Street and the government is almost invisible. At the very least, it raises serious reasons to doubt that the institutions that facilitated the crisis can clean up their mess. Nassim Taleb points to the absurdity here: "People who were driving a school bus (blindfolded) and crashed it should never be given a new bus." The problem is that because both our economy and to a larger extent our politicians aren't really subject to democratic control, the bus drivers are always going to be graduates of the same driving school.
Despite the ongoing hijack of government by Wall Street, a word that hasn't been heard in over a generation is being uttered by politicians: "regulation." It's true that Goldman Sachs and others are profiting handsomely from the collapse, but there is nonetheless a growing sense among politicians that the market may have been allowed too free a rein. Naomi Klein's devastating critique The Shock Doctrine demonstrates how disasters were turned into platforms for rabidly free market policies, and it's an analysis that explains the post-World War II era and today's ongoing financial plunder, from California to Wall Street to the City of London, very well. But there is a recognition among the public and some politicians that today's economic crisis is a failure of free market thinking, and not a warrant for more. In response to popular outcry, politicians around the world seem ready to discuss how to regulate and restrain the market. The question is, can they, and, if they can, in whose interests will this regulation work?
From its inception, the free market has spawned discontent, but rare are the moments when that discontent coalesces across society, when a sufficiently large group of people can trace their unhappiness to free market politics, and demand change. The New Deal in the United States and the postwar European welfare states were partly a result of a consortium of social forces pushing for new limits to markets, and a renegotiation of the relationship between individuals and society. What's new about this crisis is that it's pervasively global, and comes at the last moment at which we might prevent a global climate catastrophe.
Wednesday, December 2, 2009
Has The USA Forgotten Peace
By Gordon Duff
December 01, 2009 "Veterans Today" -- Tonight, I will listen to the President tell me that it will take years to withdraw from Afghanistan. He will, out of political necessity tell a series of lies. He will lie by omission, failing to tell people that this war, our "good war" was, when the facts are examined, a farce. There has not been a credible word from Osama bin Laden since December, 2001, when his death was announced in the Islamic press. What other reason did we have to occupy Afghanistan and lead it into total ruin?
The President will also lie because he has been lied to. He will present solutions, solutions sending troops into harms way, troops meant to build a government and country that force of arms can only destroy.
Years of propaganda and war mongering has made it impossible for any honest dialog about war. Years of lying, lying for politics, lying for profit, lying in support of treasonous foreign interests has left us with nothing to build on. No honest voice is left, just screaming liars paid by thieves claiming to represent the right or the left.
Neither really exist. If it talks, if it squawks, it is paid off by someone and is probably lying. Our government has their own business, getting elected, taking care of rich constituents and making sure war profiteers keep raking it in.
Without a voice of opposition from the people, as there is certainly no opposition in Washington, especially since the GOP is tied to the apron strings of the insurance industry and big oil and has no time for simple people, there will be no voice to scream "STOP."
Yes, support the troops. Bring them home to their families, let the villagers in Afghanistan continue whatever they have been doing for 300 years and stay out of it. We have managed to build a massive economy around playing at war. How many lobbyists does it require to hold a village in Afghanistan?
How many Predator drones does it require to find a bed for a homeless veteran?
How many mercenaries does it take to teach an amputee how to walk?
How many intelligence analysts does it take to figure out that if you keep doing the same thing over and over and it doesn't work, but you keep doing the same thing anyway, it is a sign you are nuts?
How long is it going to take us to realize that NOBODY is on our side. We think we are the new Roman empire, the policeman of the world. America isn't Caesar's Rome, not even the Rome of Augustus. We are the Rome of Nero and Caligula, a society steeped in corruption, excess and debauchery. How many Americans think of Washington DC as a center of culture and stability?
Does anyone even think America has a policy or government? Are we a country or simply a group of people ruled by a government owned and operated by special interest groups who dip into our treasury at will, send our kids off to war for amusement serve the agendas of "flavor of the month" allies, often brutal dictatorships disguised as enlightened democracies.
Over 40 years ago, America began to awaken to the fact that the war in Vietnam was a senseless slaughter having nothing to do with American values or security. President Obama is the 3rd president in my lifetime elected based on his promise to end a war.
In 1952, Eisenhower promised peace in Korea. We still have troops there nearly 6 decades later and wait daily for war to break out again.
In 1968, Nixon promised a "secret plan" to end the war in Vietnam. His plan, fight for 4 more years, killing 20,000 more Americans, then abandon most of our POWs and give Vietnam to the communists.
Tonite we hear another secret plan to end a war. Will we hear the truth? Not hardly!
"8 years ago we invaded Afghanistan and a short time later, Iraq, to punish a small group of murderers that killed 3000 Americans. As time has gone on, we now know that much of what we believed about those attacks is false. Evidence now points, not only to terror groups, but to countries we thought to be friends and there is even evidence of complicity here at home.
After years of phony intelligence, propaganda campaigns and torturing false confessions out of detainees, nothing can be trusted.
Donald Rumsfeld tells it best. He went before the 9/11 Commission stating there was never any indication that terror attacks of the kind seen on 9/11 were possible nor did he receive any warning. We now know that nearly every word he and so many others told that commission were lies, unquestionable, proven and done with remorseless cynicism.
8 years, the illegal invasion of Iraq, the engineering of an economic collapse in America, the corruption of our laws, of our national honor and our moral standing make it impossible for me to continue the war in Afghanistan.
No more Americans will die because of the criminality of a few. Are the few foreign terrorists or Americans, politicians, lobbyists, industrialist, bankers and their good friends overseas in Saudi Arabia or maybe Israel.
How can we order the deaths of thousands of Americans when the real "evil doers" at home run free? We know their names, we know their crimes. How can we bring justice and democracy to others when we, ourselves, have none?
Nearly 10,000 Americans are dead, tens of thousands wounded and trillions of dollars are missing. There is much more proof that these deaths and this massive theft was caused by a domestic conspiracy than any foreign intrigue.
First, we clean our own home, then we carry democracy to others."
Will we hear this tonight?
Veterans Today Senior Editor Gordon Duff is a Marine combat veteran and regular contributor on political and social issues.
December 01, 2009 "Veterans Today" -- Tonight, I will listen to the President tell me that it will take years to withdraw from Afghanistan. He will, out of political necessity tell a series of lies. He will lie by omission, failing to tell people that this war, our "good war" was, when the facts are examined, a farce. There has not been a credible word from Osama bin Laden since December, 2001, when his death was announced in the Islamic press. What other reason did we have to occupy Afghanistan and lead it into total ruin?
The President will also lie because he has been lied to. He will present solutions, solutions sending troops into harms way, troops meant to build a government and country that force of arms can only destroy.
Years of propaganda and war mongering has made it impossible for any honest dialog about war. Years of lying, lying for politics, lying for profit, lying in support of treasonous foreign interests has left us with nothing to build on. No honest voice is left, just screaming liars paid by thieves claiming to represent the right or the left.
Neither really exist. If it talks, if it squawks, it is paid off by someone and is probably lying. Our government has their own business, getting elected, taking care of rich constituents and making sure war profiteers keep raking it in.
Without a voice of opposition from the people, as there is certainly no opposition in Washington, especially since the GOP is tied to the apron strings of the insurance industry and big oil and has no time for simple people, there will be no voice to scream "STOP."
Yes, support the troops. Bring them home to their families, let the villagers in Afghanistan continue whatever they have been doing for 300 years and stay out of it. We have managed to build a massive economy around playing at war. How many lobbyists does it require to hold a village in Afghanistan?
How many Predator drones does it require to find a bed for a homeless veteran?
How many mercenaries does it take to teach an amputee how to walk?
How many intelligence analysts does it take to figure out that if you keep doing the same thing over and over and it doesn't work, but you keep doing the same thing anyway, it is a sign you are nuts?
How long is it going to take us to realize that NOBODY is on our side. We think we are the new Roman empire, the policeman of the world. America isn't Caesar's Rome, not even the Rome of Augustus. We are the Rome of Nero and Caligula, a society steeped in corruption, excess and debauchery. How many Americans think of Washington DC as a center of culture and stability?
Does anyone even think America has a policy or government? Are we a country or simply a group of people ruled by a government owned and operated by special interest groups who dip into our treasury at will, send our kids off to war for amusement serve the agendas of "flavor of the month" allies, often brutal dictatorships disguised as enlightened democracies.
Over 40 years ago, America began to awaken to the fact that the war in Vietnam was a senseless slaughter having nothing to do with American values or security. President Obama is the 3rd president in my lifetime elected based on his promise to end a war.
In 1952, Eisenhower promised peace in Korea. We still have troops there nearly 6 decades later and wait daily for war to break out again.
In 1968, Nixon promised a "secret plan" to end the war in Vietnam. His plan, fight for 4 more years, killing 20,000 more Americans, then abandon most of our POWs and give Vietnam to the communists.
Tonite we hear another secret plan to end a war. Will we hear the truth? Not hardly!
"8 years ago we invaded Afghanistan and a short time later, Iraq, to punish a small group of murderers that killed 3000 Americans. As time has gone on, we now know that much of what we believed about those attacks is false. Evidence now points, not only to terror groups, but to countries we thought to be friends and there is even evidence of complicity here at home.
After years of phony intelligence, propaganda campaigns and torturing false confessions out of detainees, nothing can be trusted.
Donald Rumsfeld tells it best. He went before the 9/11 Commission stating there was never any indication that terror attacks of the kind seen on 9/11 were possible nor did he receive any warning. We now know that nearly every word he and so many others told that commission were lies, unquestionable, proven and done with remorseless cynicism.
8 years, the illegal invasion of Iraq, the engineering of an economic collapse in America, the corruption of our laws, of our national honor and our moral standing make it impossible for me to continue the war in Afghanistan.
No more Americans will die because of the criminality of a few. Are the few foreign terrorists or Americans, politicians, lobbyists, industrialist, bankers and their good friends overseas in Saudi Arabia or maybe Israel.
How can we order the deaths of thousands of Americans when the real "evil doers" at home run free? We know their names, we know their crimes. How can we bring justice and democracy to others when we, ourselves, have none?
Nearly 10,000 Americans are dead, tens of thousands wounded and trillions of dollars are missing. There is much more proof that these deaths and this massive theft was caused by a domestic conspiracy than any foreign intrigue.
First, we clean our own home, then we carry democracy to others."
Will we hear this tonight?
Veterans Today Senior Editor Gordon Duff is a Marine combat veteran and regular contributor on political and social issues.
Monday, November 30, 2009
Medicare in Crisis: The Devastating Impacts of a Corporate Health Care Bill
Editor's NOTE:
I share Mr. Cooke's concerns re: the competing Senate and House Health Care bills. Both appear more or less to be reform "in name only" which benefit health insurance companies at the expense of the Middle class and working poor. Medicaid rates of reimbursement are already unconscionably low and Medicare reimbursement rates have either been frozen or have failed to keep pace with inflation for over a decade.
As a retired physician and surgeon who has worked in the nightmare that is "for-profit" health care, I favor universal single payer coverage for all Americans. If health insurance companies were eliminated entirely, provider's could be paid reasonable rates of reimbursement for services including increases tied to the rate of inflation (for more see THIS...) Given the fact that Congress is currently "owned" by elite special interests, such an option appears extremely unlikely any time soon. While the current situation is deplorable, I fear the passage of a health insurance industry "reform" bill in the current climate--would be far worse.
--Dr. J. P. Hubert
By Shamus Cooke
Global Research,
November 27, 2009
Wading through the endless debate over health care has exhausted the patience of most Americans — the zigzags, obscure language, and long-winded discussion is inherently repulsive.
But now the dust is starting to settle, and the Congressional vision for health care in the U.S. is emerging. Instead of being “progressive,” it will amount to a massive, corporate-inspired attack on American workers, the elderly, and the poor.
After months of confusion and delay, Congress has shipwrecked the popular energy over health care onto the jagged rock of corporate interests. More spectacularly, health care “reform” is being used as an opportunity to greatly advance corporate influence over social spheres long-dedicated to the working-class — seemingly harmless provisions carry with them enormous implications.
These devils hide in the details of the competing health care bills in Congress; both contain debilitating right-wing policies hidden within a progressive shell. Obama is indeed acting as the agent of change, to the great benefit of the U.S. corporate elite.
And although the final bill has yet to be crafted, there exists general agreements as to what the end version will look like. Americans will be forced to buy shoddy corporate insurance with no limit to the cost, no guarantee of quality, with large premiums and other tricks to further gouge consumers. If a public option emerges in the final bill — by no means a guarantee — it will be shrunken enough to insure very few people (2 percent of the U.S. population).
But it gets worse. How this health care “reform” will be paid for has implications that dwarf the above atrocities.
For example, the Democrats were determined to pass a health care bill that “will not add one cent to the deficit.” And they have succeeded: the House and Senate health care bills both plan to reduce the deficit by over $100 billion. But a second-grader could do the math here: more service does not equal less cost — a truism that dominates the for-profit health care industry.
So how does the government plan to save billions of dollars as they “help” millions of people?
The two biggest cost saving schemes are the most damaging. The first is the enormous attack on Medicare. Since its inception, the corporate elite wanted this program struck down. Now they have their man for the job — a Republican could never get away with such obvious treachery.
The Congressional Budget Office estimates that the Senate version of health care would cut $404 billion from Medicare and Medicaid; the house version would cut $570 billion. The final cut could be much more. Obama made the ridiculous claim that only “wasteful” parts of Medicare would be cut. The truth is far different.
One way that both Congressional health care bills will gut Medicare is referred to as “forced productivity gains” — cost saving measures essentially; trimming the fat.
What are these savings? The most mentioned device — by politicians and media alike — is the reduction of “wasteful tests” and procedures that doctors routinely perform, an idea that the health care mega-corporations love. It will save them billions, while having catastrophic effects on the health care of millions of people.
For example, the recent announcement that women will now be persuaded to cut back on screenings for breast cancer and cervical cancer have caused an uproar nationwide: people are correctly making the connection behind Congress’ “forced productivity gains” and the new “recommendations” that will be used by insurance companies to justify cutting these services, both of which will boost profits. The general agreement behind rationing health care in this way will be an attack on not only Medicare, but serve as the backbone of any health care bill passed, negatively effecting everyone unable to afford luxury health care.
Another piece of Medicare that’s being trimmed is Medicare Advantage, a favorite program of the elderly because of its comprehensive services. Premiums for this program are already rising drastically in anticipation of the health care bill’s passage, considered by Congress to be “wasteful.” Without this program, Medicare will be greatly devalued and be more appropriately named: “band-aides for seniors.”
Finally, The Senate health care bill attacks Medicare by reducing payments to doctors by 25 percent. If doctors receive such a drastic reduction in pay, they will simply refuse to see Medicare or Medicaid patients; people will thus be insured only on paper. The newly insured Medicaid patients under any new congressional bill will be sorely disappointed.
Once Medicare is undermined in the above ways, the corporate sponsored right-wing will make a very convincing argument that “Medicare doesn’t work”, leading to future cuts that will further destroy the program.
The second hidden disaster in financing a congressional health care bill is the tax on so-called “gold-plated” or “Cadillac” health insurance policies that some employers offer their workers. This tax is supposedly meant to apply to the health care policies that “elite” employees receive.
And while there should exist no complaints about taxing corporations, the motives behind this particular tax are intentionally deceiving. As it turns out, many, if not most workers in unions will be included in this tax, which, under the Senate version, will include any plan worth more than $8,000 for individuals and $21,000 for families. Hardly elite, considering the still-soaring costs for health care.
If this provision were to pass — and it’s very popular in Congress — the immediate reaction would be very predictable: employers would immediately drop their health care plans, forcing workers into the now-forced purchasing of inadequate health care. This is why unions oppose such a plan. California Democrat Pete Stark agrees: “Employers and insurers will reduce their benefits to avoid paying the proposed tax.”
Workers fortunate to have union contracts will be heavily pressured to concede their plans, which in the past they’ve sacrificed wage-increases to keep. Ultimately, employers will have a new excuse not to provide health care to workers.
Obama again used his superb intelligence to totally obscure the issue in support of the tax:
“I do think that giving a disincentive to insurance companies to offer Cadillac plans that don’t make people healthier is part of the way that we’re going to bring down health care costs for everybody over the long term.” Translation: he supports taxing the health care of union workers.
Overall, a compromise bill between the Senate and House versions will create utter disaster for the working-class. It will not signal a progressive “step in the right direction,” as many liberals claim. At minimum, it will be a step backward, though more likely such a bill will be an enormous regression, to a time where health care was the exclusive privilege of the wealthy.
The right-wing attacks on “Obamacare” — along with the media’s lack of questioning — have shielded the Democrats from any serious debate about the above questions, including many other concerns unmentioned here.
The trash legislation that Congress is producing is the direct consequence of the Democratic Party being dominated by giant corporations — in this case the health care industry. The two-party system is the political system of the corporate elite, who switch party affiliations when they find it convenient; many of them throw equal money at both parties.
A crucial prop in this broken political system needs to be removed and organized under its own strength. If the unions took their support from the Democrats, organized their members and resources into a new political party, and aggressively pushed reforms that benefited the majority of working-class Americans, U.S. democracy would be tremendously strengthened. Medicare could not only be saved, but expanded to everyone from birth to death and be considered a fundamental human right.
I share Mr. Cooke's concerns re: the competing Senate and House Health Care bills. Both appear more or less to be reform "in name only" which benefit health insurance companies at the expense of the Middle class and working poor. Medicaid rates of reimbursement are already unconscionably low and Medicare reimbursement rates have either been frozen or have failed to keep pace with inflation for over a decade.
As a retired physician and surgeon who has worked in the nightmare that is "for-profit" health care, I favor universal single payer coverage for all Americans. If health insurance companies were eliminated entirely, provider's could be paid reasonable rates of reimbursement for services including increases tied to the rate of inflation (for more see THIS...) Given the fact that Congress is currently "owned" by elite special interests, such an option appears extremely unlikely any time soon. While the current situation is deplorable, I fear the passage of a health insurance industry "reform" bill in the current climate--would be far worse.
--Dr. J. P. Hubert
By Shamus Cooke
Global Research,
November 27, 2009
Wading through the endless debate over health care has exhausted the patience of most Americans — the zigzags, obscure language, and long-winded discussion is inherently repulsive.
But now the dust is starting to settle, and the Congressional vision for health care in the U.S. is emerging. Instead of being “progressive,” it will amount to a massive, corporate-inspired attack on American workers, the elderly, and the poor.
After months of confusion and delay, Congress has shipwrecked the popular energy over health care onto the jagged rock of corporate interests. More spectacularly, health care “reform” is being used as an opportunity to greatly advance corporate influence over social spheres long-dedicated to the working-class — seemingly harmless provisions carry with them enormous implications.
These devils hide in the details of the competing health care bills in Congress; both contain debilitating right-wing policies hidden within a progressive shell. Obama is indeed acting as the agent of change, to the great benefit of the U.S. corporate elite.
And although the final bill has yet to be crafted, there exists general agreements as to what the end version will look like. Americans will be forced to buy shoddy corporate insurance with no limit to the cost, no guarantee of quality, with large premiums and other tricks to further gouge consumers. If a public option emerges in the final bill — by no means a guarantee — it will be shrunken enough to insure very few people (2 percent of the U.S. population).
But it gets worse. How this health care “reform” will be paid for has implications that dwarf the above atrocities.
For example, the Democrats were determined to pass a health care bill that “will not add one cent to the deficit.” And they have succeeded: the House and Senate health care bills both plan to reduce the deficit by over $100 billion. But a second-grader could do the math here: more service does not equal less cost — a truism that dominates the for-profit health care industry.
So how does the government plan to save billions of dollars as they “help” millions of people?
The two biggest cost saving schemes are the most damaging. The first is the enormous attack on Medicare. Since its inception, the corporate elite wanted this program struck down. Now they have their man for the job — a Republican could never get away with such obvious treachery.
The Congressional Budget Office estimates that the Senate version of health care would cut $404 billion from Medicare and Medicaid; the house version would cut $570 billion. The final cut could be much more. Obama made the ridiculous claim that only “wasteful” parts of Medicare would be cut. The truth is far different.
One way that both Congressional health care bills will gut Medicare is referred to as “forced productivity gains” — cost saving measures essentially; trimming the fat.
What are these savings? The most mentioned device — by politicians and media alike — is the reduction of “wasteful tests” and procedures that doctors routinely perform, an idea that the health care mega-corporations love. It will save them billions, while having catastrophic effects on the health care of millions of people.
For example, the recent announcement that women will now be persuaded to cut back on screenings for breast cancer and cervical cancer have caused an uproar nationwide: people are correctly making the connection behind Congress’ “forced productivity gains” and the new “recommendations” that will be used by insurance companies to justify cutting these services, both of which will boost profits. The general agreement behind rationing health care in this way will be an attack on not only Medicare, but serve as the backbone of any health care bill passed, negatively effecting everyone unable to afford luxury health care.
Another piece of Medicare that’s being trimmed is Medicare Advantage, a favorite program of the elderly because of its comprehensive services. Premiums for this program are already rising drastically in anticipation of the health care bill’s passage, considered by Congress to be “wasteful.” Without this program, Medicare will be greatly devalued and be more appropriately named: “band-aides for seniors.”
Finally, The Senate health care bill attacks Medicare by reducing payments to doctors by 25 percent. If doctors receive such a drastic reduction in pay, they will simply refuse to see Medicare or Medicaid patients; people will thus be insured only on paper. The newly insured Medicaid patients under any new congressional bill will be sorely disappointed.
Once Medicare is undermined in the above ways, the corporate sponsored right-wing will make a very convincing argument that “Medicare doesn’t work”, leading to future cuts that will further destroy the program.
The second hidden disaster in financing a congressional health care bill is the tax on so-called “gold-plated” or “Cadillac” health insurance policies that some employers offer their workers. This tax is supposedly meant to apply to the health care policies that “elite” employees receive.
And while there should exist no complaints about taxing corporations, the motives behind this particular tax are intentionally deceiving. As it turns out, many, if not most workers in unions will be included in this tax, which, under the Senate version, will include any plan worth more than $8,000 for individuals and $21,000 for families. Hardly elite, considering the still-soaring costs for health care.
If this provision were to pass — and it’s very popular in Congress — the immediate reaction would be very predictable: employers would immediately drop their health care plans, forcing workers into the now-forced purchasing of inadequate health care. This is why unions oppose such a plan. California Democrat Pete Stark agrees: “Employers and insurers will reduce their benefits to avoid paying the proposed tax.”
Workers fortunate to have union contracts will be heavily pressured to concede their plans, which in the past they’ve sacrificed wage-increases to keep. Ultimately, employers will have a new excuse not to provide health care to workers.
Obama again used his superb intelligence to totally obscure the issue in support of the tax:
“I do think that giving a disincentive to insurance companies to offer Cadillac plans that don’t make people healthier is part of the way that we’re going to bring down health care costs for everybody over the long term.” Translation: he supports taxing the health care of union workers.
Overall, a compromise bill between the Senate and House versions will create utter disaster for the working-class. It will not signal a progressive “step in the right direction,” as many liberals claim. At minimum, it will be a step backward, though more likely such a bill will be an enormous regression, to a time where health care was the exclusive privilege of the wealthy.
The right-wing attacks on “Obamacare” — along with the media’s lack of questioning — have shielded the Democrats from any serious debate about the above questions, including many other concerns unmentioned here.
The trash legislation that Congress is producing is the direct consequence of the Democratic Party being dominated by giant corporations — in this case the health care industry. The two-party system is the political system of the corporate elite, who switch party affiliations when they find it convenient; many of them throw equal money at both parties.
A crucial prop in this broken political system needs to be removed and organized under its own strength. If the unions took their support from the Democrats, organized their members and resources into a new political party, and aggressively pushed reforms that benefited the majority of working-class Americans, U.S. democracy would be tremendously strengthened. Medicare could not only be saved, but expanded to everyone from birth to death and be considered a fundamental human right.
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