Wednesday, February 21, 2007

The United States vs I Lewis Libby

Editor's note: I am moving over to post at the other blog(also see new articles below).
by Sidney Blumenthal
| Feb 21 2007 - 9:27am

Throughout the anxious months before the trial of United States vs. I Lewis Libby, one of Scooter Libby's old mentors, a prominent Washington attorney and Republican with experience going back to the Watergate scandal and with intimate ties to neo-conservatives, implored him repeatedly to stop covering up for vice-president Dick Cheney and to cut a deal with the special prosecutor.

Yet another distinguished Washington lawyer and personal friend of Libby's, privy to the mentor's counsel, reinforced his urgent advice and offered to provide Libby with introductions to former prosecutors who might help guide him. But Libby rebuffed them. He refused to listen. He insisted on the trial.

On Tuesday 13 February 2007, Theodore Wells, Libby's chief defence lawyer, abruptly announced that neither Cheney nor Libby would testify on his behalf. In effect, the defence was resting. Did his own lawyers mistrust Libby on the stand? Would he lie and prompt another count of indictment? Would Cheney, indisputably the director of the campaign against former ambassador Joseph Wilson be stepping into a perjury trap or open the door to conspiracy charges implicit from the beginning? Those questions, along with their testimony, remain moot.

According to prosecutor Patrick Fitzgerald, Libby's case amounts to an attempt at "jury nullification". Libby is charged with five counts of perjury and obstruction of justice for lying about where he learned the identity of CIA undercover operative Valerie Plame (Wilson's wife) and to whom he spread that information.

Fitzgerald presented two government officials, former CIA officer Robert Grenier and state-department official Marc Grossman, who swore they were the first to inform Libby. Libby was in pursuit of that information, Fitzgerald further revealed through testimony from past and present Bush administration officials, because the vice-president had tasked him to find and spread it. And Libby also passed on the information to Ari Fleischer, the White House press secretary, to get him to pass it on to the press.

Two reporters, Matt Cooper (then at Time magazine) and Judith Miller (then at the New York Times) testified that Libby had conveyed to them the information about Plame and NBC's Tim Russert testified that he did not first inform Libby about her as Libby told the grand jury.

A handful of dust

Libby's defence was the legal equivalent of the fog of war. He sought to obfuscate the clarity of the prosecution's case by raising irrelevant issues, turning the jury's attention away from the charges themselves and creating doubt by getting witnesses to admit small lapses of memory, thereby underlining Libby's memory defence.

So Libby's lawyers highlighted Cooper's incomplete note-taking, whether Miller raised the issue of writing a piece based on Libby's information, and whether Russert followed strict journalistic protocol when he spoke freely to the FBI. Libby's team also summoned a parade of reporters to relate that Libby had not dropped Plame's name with them. By demonstrating a negative, Libby sought to dispute a positive. The intent to sow confusion among the jurors in order to raise a shadow of a doubt and produce an acquittal partly depended on their ignorance of Washington anthropology.

Fitzgerald's case elicited significant evidence of the planned and concerted attack on Wilson. Libby, along with a host of other White House aides, leaked Plame's secret identity to reporters. The methods of communications strategy were disclosed in the testimony of Cathie Martin, Cheney's deputy PR aide, who explained the art of talking-points, and of Fleischer, among others. "It was decided that Scooter would call [reporters] to try to get into the story and correct the false information", Martin said. "That was [Cheney's] decision."

Trial exhibits included the notes of Cheney's former communications advisor, Mary Matalin, who suggested that Libby call Russert to complain about MSNBC Hardball host Chris Matthews: "Tim hates Chris." Martin expressed awe of Matalin's skills, but Matalin's Heather-like remarks illuminated Republican Washington as High School Confidential.

On 12 February, I sat in the courtroom as the dapper, slightly built Libby took his place at the defence table, half-smiling at his half-dozen attorneys while occasionally flicking his head to the side, betraying a wary glance. In the bench behind him sat his wife, Harriet Grant (herself a lawyer), and Barbara Comstock, a conservative operative hired as a PR specialist, playing with her BlackBerry during the testimony and chewing gum. The jurors marched to their seats were impassive; it was impossible to read anything from their immobile faces.

On that day, the busiest for the defence, the witnesses flew through the courtroom with speed. Every one called by the defence was a reporter whose presence was intended to contribute to the confusion of the jury and direct their gaze away from the actual charges. Walter Pincus of the Washington Post was the first one in the stand. He revealed that he had spoken with Libby but that it was Fleischer who disclosed to him Plame's name, as though that somehow proved exculpatory. Of course, it was Libby who told Fleischer about Plame - "hush, hush" and "on the QT".

Pincus is the reporter in the run-up to the invasion of Iraq who persistently wrote sceptical stories on administration claims about Saddam Hussein's possession of weapons of mass destruction. Those stories were typically buried, earning Pincus the sobriquet among his friends of Walter "A-14" Pincus.

Fleischer told Pincus about Plame as a consequence of Pincus's diligence as he sought to get to the bottom of the Wilson smear. It was Pincus who called Fleischer. Pincus was not necessarily the person whom Libby himself would trust to leak to himself. Pincus was known within the White House as a sceptic of its disinformation and as a reporter with many independent sources in the intelligence community, whom the neo-conservatives regarded as an adversary. Pincus was not the sort of reporter whom Libby would provide with this "hush, hush" information. But if Fleischer did so, it was a different matter. In any case, Pincus did not publish Plame's name. Unlike Bob Novak, he had compunctions about the sensitivity of exposing a CIA operative.

Journalism as witness

Next up was Pincus's colleague Bob Woodward, who explained that then deputy secretary of state Richard Armitage had told him about Plame. A snippet of audiotape of their conversation, recorded by Woodward as part of his research for his book Plan of Attack, was played. This was another attempt at exculpation by showing that it was not Libby who was the source, once again trying to cloud the accusations of perjury and obstruction.

Armitage, Colin Powell's best friend, had been a source for Woodward for decades. Libby would know that however useful Woodward might be as an outlet for leaks - as he demonstrated in Bush at War, which depicted President Bush and his team as decisive, prudent and courageous - he would ultimately tilt in Powell's direction.

But there was another reason for Libby not to leak Plame's identity to Woodward that was even more basic. Woodward husbanded material for his bestselling books and did not dribble out his exclusives in the daily newspaper. Leaking to Woodward was pointless if one wanted to get a story published immediately.

Armitage's leak was at best mindless, at worst the trading of national-security secrets to ingratiate himself with a star reporter. On the tape, Armitage's tough-guy, obscenity-spewing persona is coached along by an eager, laughing Woodward. The more Woodward laps it up, the more Armitage spills the beans. Woodward: "But why would they send him?" Armitage: "Because his wife's a fucking analyst at the agency." Woodward: "It's still weird." Armitage: "It, it's perfect. This is what she does, she is a WMD analyst out there." Woodward: "Oh she is." Armitage: "Yeah." Woodward: "Oh, I see."

Armitage had learned of Plame from reading a state-department memo that conspicuously marked an "S" next to her name, indicating that her identity was top-secret. Armitage, who had years of experience at high levels of government, was more intent on impressing Woodward than on keeping the secret. The tape ends with Armitage repeating with emphasis: "But his wife is in the agency and is a WMD analyst. How about that shit?" Armitage's buffoonery about "that shit" had no bearing on the charges against Libby, but Libby's lawyers hoped it would provide a tawdry distraction, as it has for numerous Washington columnists and pundits.

Novak was the next witness. He spelled his last name and then his first: "B-O-B." He explained that his sources were Armitage and Karl Rove. "I wouldn't call him a good friend. I would call him a very good source", Novak said about Rove. "I talked to him two or three times a week at that point." Unlike Rove, Libby was not a regular source. "I had no help and no confirmation from Mr Libby on that issue", Novak said about the Plame story.

Just when it appeared that Novak was done, a juror asked a question, read by Judge Reggie Walton, about whether Novak had spoken to anyone else about the information in his notorious column exposing Plame besides the two "senior administration officials" cited in it before its publication. Novak said that he had spoken with Bill Harlow, the public-affairs officer at the CIA.

The judge prodded him on whether there was anyone else. Novak revealed that he gave a copy of his column to Richard Hohlt, whom he described as one of his "closest friends", and to whom he said he spoke daily. Hohlt, Novak went on, is a "lobbyist about town". (In fact, he's a little known but influential Republican lobbyist.) And, the judge wondered, did Mr Hohlt share the column with anyone? Novak further revealed that Hohlt showed it to people at the White House. Thus, through Novak's cut-out, or go-between, the White House was informed that Novak would publish Plame's identity. None of this had any bearing on Libby's guilt or innocence, but it was a fascinating glimpse at Novak's methods.

David Sanger, the chief Washington correspondent for the New York Times, followed Novak in the witness chair. What Sanger had to offer is that he had spoken with Libby but that Libby had not told him about Plame. Sanger was another bit-player in the Libby defence of distraction. Indeed, there was no cause to leak to Sanger. He was not the type of reporter with whom that sort of delicate political information would be shared. Indeed, Libby was working the New York Times through Judith Miller, the past reliable outlet for disinformation on WMD stories. Libby could not know that Miller would be thwarted in getting permission to write a Plame story. Going to someone like Sanger would only have undermined his attempt to use the Times. But none of that was drawn from the witness.

Dick Cheney's shadow

The next day, instead of calling Cheney, Libby's team put John Hannah, a neo-conservative middle east policy analyst on the vice-president's staff, on the stand. For two hours, Hannah held forth on Libby's forgetfulness and the overwhelming crush of his job. Hannah was Cheney's stand-in, but without Cheney's enormous potential liabilities that might be explored through cross-examination. Hannah's role was to be the first-person witness to buttress Libby's memory defence.

Yet, under cross-examination by Fitzgerald, Hannah was cracked apart in a matter of minutes. Fitzgerald asked him whether defending Cheney in the media was an important part of Libby's job. "It would be important to push back on those issues, yes", Hannah said. Fitzgerald then got Hannah to acknowledge that getting Libby to give up an hour's worth of his time, given his heavy load of work, would be difficult.

Fitzgerald zeroed in on Libby's two long meetings in the St Regis Hotel's dining room on 23 June and 8 July 2003. "So, during the time of all these threats if he gave someone an hour or two of his time ... it was something Mr Libby would think was important, correct?" Fitzgerald asked. Hannah answered that it was. "Is it fair to say that what was important to the vice-president was important to Mr Libby?" Fitzgerald asked. "Yes, that's correct", Hannah replied.

But the demolition of Hannah was not done. A juror had a question, posed to the witness by the judge: aside from Libby's difficulty with memory, did it lead him to have concerns about his effectiveness? "Never", said Hannah. The barbed question was a sharp indication of at least one juror's cynicism about Libby's defence.

On the next day, Wednesday 14 February, Judge Walton ruled that Libby's lawyers had misled the court into believing that Libby would testify in his own behalf. Walton, therefore, disallowed admission into court of questioning of Libby's CIA briefers, who would supposedly show how busy Libby was, another element of his effort to confuse the jury. Undoubtedly, Walton's displeasure at Libby's refusal to testify will shape the instructions he gives to the jurors.

Closing statements will occur on 20 February. Judge Walton will charge the jury, and they will decide Libby's fate. Libby must hope that the testimony presented by Fitzgerald has been obscured enough to prevent his conviction. Then the advice he rejected from his concerned mentor and other friends will have been proved to be a gamble he never needed to accept. If declared not guilty, Libby can return to his White House office, where he can resume the vice-president's campaigns of disinformation.
Sidney Blumenthal

About author Sidney Blumenthal is a former senior adviser to President Clinton.

This isn't Cheney's Iraq

Of course, the sob lies a lot, doesn't he?
Cheney Lied To The Troops Today

ECC professor's observations of Iraq

Posted Tuesday, February 20, 2007

Editor’s note: Jabria Jassim, an Elgin Community College chemistry professor, recently visited Baghdad to see relatives. She left Iraq years ago. Here is an edited essay on her observations.

Baghdad in 2007

This past December, I had a chance to visit Iraq for about two weeks. Previous to my travel, I was warned that landing at Baghdad’s airport is too dangerous and too risky, so I took a plane from Amman to Irbil, which is in the northern region. The majority of Irbil residents are Kurds. I found the city to be very peaceful, and the people there live “normal” lives. However, the living expenses for an outsider are very high due to the large influx of immigrants coming from Baghdad and a few other cities to the east and south of Baghdad where the violence is predominant. People who had lived in these areas either left their houses by choice or were forced to leave by the insurgents.

I stayed in Irbil for few days before heading to Baghdad. As I traveled across the land with some companions, we were stopped along the way at many checkpoints — some guarded by Americans and some by Iraqi soldiers. Tanks and artillery were on both sides of the highways so we all felt safe; but I was bothered by the reality of these so-called checkpoints. They either don’t check at all or the checking was not adequate. I heard comments from some travelers (Kurds, Arabs, and even foreigners) that these checkpoints were useless, and only there to slow the traffic.

The insurgents know this fact very well; so they continue to smuggle weapons and terrorists into Iraq from the neighboring countries. My gut feeling told me that it was too risky and too dangerous for the soldiers at the checkpoints to even peak into let alone to check inside cars and trucks.

What’s in Baghdad

At first sight, the city looked more damaged and brutally wounded, and more devastated than when I left it last year. Not a single hour passes without one hearing an explosion, a car bomb, or devastated women and children screaming for help. I saw people running from a suicide bomber and others trying to pull bodies from a fire. Sirens from ambulances and police cars and helicopters flying day and night all over the city all join in to create a constant roar of horrible noises.

My beloved Baghdad has a 9 p.m. curfew. The government-run power plants provide residential electricity one hour a day, but not every day. Private sources of electricity are available at very high rates so they are only for people who can afford the high rates. One source is a man located at the end of the block from where I’m staying. He runs a huge generator, and his deal is $100/month for four hours of electricity a day. If we remember that the average salary of an Iraqi college graduate is only $300/month, then we have to agree that the price is a little steep. Most of the people are jobless due to lack of security, the fear of kidnapping, and all the other atrocities being committed on a daily basis. Others buy their own generator run on either gasoline or benzene, which cost about $5/gallon. This is also sold by a private enterprise and the supplies are not always available. Therefore, people look for a few liters of fuel in the black market and pay double if not triple the cost.

Drivers line their cars up at gas stations where they often have to stay all night and sometimes for two days in a row, all while taking the risk of getting shot at by terrorists who thrive on finding crowds in open areas. These kinds of attacks are always on the news.

There is also a rationing of water in Baghdad. Some use water pumps to get additional water, which worsens water shortages and causes friction between neighbors, especially with those who can’t afford powering a water pump.

The continuous shortage of fuel is hard to imagine in Iraq, as it is one of the top producers of petroleum oil in the world. Thousands of barrels of this precious commodity are either smuggled out of Iraq or sold by shrewd businessmen to Iran and other neighboring countries. This transportation occurs right under the noses of the Iraqi and the coalition forces.

The shortages of electricity, fuel and water are tolerable among the Iraqis when compared to the concerns for security and safety. People in Baghdad and other cities who leave their houses face any of the following disasters:

1. Being kidnapped for a hefty ransom. This is a huge business and a very good source of income for insurgents. The minimum ransom demand is $20,000 and often goes up to a million dollars. Talk on the street is that if the ransom is not paid within 24 hours, those kidnapped are simply killed. One FBI agent also said that 90 percent of the kidnapped people don’t return alive to their families. A daily task by some police units is to retrieve bodies from the Tigris River. An office at the American Embassy in Baghdad was established to help with ransom demands, in extreme cases.

2. Being hurt or killed by a car bomb. Car bombs go off in every corner of the city a few times a day.

3. Being injured or killed by suicide bombers: … The goal was to kill those who escaped the first blasts and also those who rush to rescue the victims will be killed the second time around. The suicide bombers are religious extremists who belong to a certain branch in Islam, and they believe strongly that killing even innocent people is a short cut for them to get to heaven, where they get awarded with villas and virgins galore. So the more they kill, the better their rewards.

4. Being attacked by snipers, who are in motorcycles or in private cars. Some even wear police uniforms with heads and faces hidden. They shoot randomly at crowds in streets and open markets.

Besides all that, in some extremely dangerous cities, families are forced by gunmen to leave their houses and everything behind. A very common scene in some neighborhoods is seeing a whole family with children knocking at doors begging for food and a place to stay.

You may ask why don’t they go to the police or call the government. Yes, Iraqi police can be found; however, most of the Iraqis don’t trust them. Some work directly with the insurgents; others are very corrupt and will do anything for money or just a little power. I also learned that the government at one time was so desperate for police that they hired criminals who escaped from prisons without checking their backgrounds. As a result, some criminals are not only getting a good salary but also guns, cars and power. I have to be fair here and say, there are decent and honorable policemen who want to fight terrorists and corruption but they have no power and/or no saying in any matter and their hands are tied.

Where is the Iraqi Government?

The foreign embassies and all governmental agencies, their employees and their families are located in a very secure part of Baghdad known as the International or the Green Zone, which is somehow isolated from the rest of the country. This area used to be occupied by Saddam Hussein and his guards and army. You can find many checkpoints on the road to this zone, and they are guarded by either American soldiers or soldiers of the Coalition forces. At each checkpoint, the soldiers check with electronic devices and dogs to conduct elaborate searches.

During my two-week visit, I listened to a good deal of my people, read news, watched TV, and learned that the elected government officials are in disagreement, feuding about the chaos and horrible conditions.

Besides the daily massacres of the average Iraqi, there is a systematic genocide of educators and medical doctors occurring and also on a daily basis in most of the cities in Iraq, especially Baghdad.

A large percentage were either gunned down in their own offices or forced to flee the country after they were stripped of their houses, money, and all belongings. In the past few months, a petition was sent by the Iraqis in the U.S. to the White House with the names of these university professors and administrators who were killed or forced to leave the country in a very short period of time — a huge list.

According to the United Nations, Iraq currently has the largest population of emigrants in the world — leaving. The neighborhood countries like Jordan decided not to accept further Iraqis immigrants.

The saddest part of all that is the renegade thugs who are still bringing terror on the Iraqis and falsely calling themselves resistant, use religion as an excuse to wipe out the educators, medical doctors, and all good and descent Iraqis, are still free; and are getting more powerful. What first comes to mind is shame upon the Iraqi government who should put all its resources to fight the thugs and give the Iraqis the peace they dream about. But again, the Iraqi government has no much power over the situation; no good police forces to rely on, no strong and loyal army to threaten those ruthless and brutal thugs: you better behave or else. The “or else” has no meaning since the terrorists have more resources and more control on the situation.

What do my country men and women want?

— Effective border patrols: Capture and jail the insurgents.

Support from governments of the insurgents’ native countries: Capture and jail them before they go to Iraq.

— Government officials trained in diplomatic political skills: They need to learn how to negotiate with neighboring countries to create checkpoints before the insurgents pass out of their countries with their weapons. I ran into a truck driver who brings vegetables and fruits from Syria to Baghdad. He said he didn’t mind bringing terrorists whom he called fighters for profit. I am sure there is many like him.

— Safety for their children to go to school: End of fear of kidnappers, snipers and bombers.

— Safety to leave their homes to have constructive lives. They are tired of hiding and tired of listening and witnessing all kinds of destruction.

— Get the chance to build schools, hospitals, roads, and supermarkets.

— Opportunity to refine and distribute their own petroleum oil. Take a hot shower, watch TV, provide light for children’s homework; heat their homes in the brutal winters and cool them when the temperature is over a hundred during the long humid summer days.

— Background checks for security personnel, soldiers and police.

The country is bleeding to death and is facing total destruction. It is losing its best educators and administrators. Now, the medical doctors are targeted. The medical doctors have done nothing except make the insane terrorists unhappy by saving the lives of some of their victims. My nephew, Mohammed, is one such doctor, who now is in hiding from the terrorists who ordered him to either leave the country or they would kill him.

I am not a politician, but I am pleading for help in most effective ways. I don’t know if that means sending more troops. My heart aches for all of the military and families who have become caught up in this fire of hate on behalf of my people. I know the media here is doing a great job reflecting the hate of the insurgents and the terrorists toward the American troops. What they don’t show is the reality of millions of Iraqis praying to God to protect the soldiers who are fighting for their freedoms from the clutches of these ruthless criminals and murderers. Believe me, I was there when people in my neighborhood were happily spreading the good news and congratulating each other when America troops kicked off doors in the Haifa neighborhood, one of the safe-havens for terrorists. The operation lasted a whole day. I, myself, wanted to hug the soldiers and convey to them the gratitude of the Iraqis; but it was impossible to even leave the house that day.

The majority of Iraqis are religious, and the Muslim Iraqis believe strongly in the mission of Islam, which is like all other religions, is to bring peace and justice to humanity. Unfortunately, some leaders are misinterpreting this mission and are spreading hate and retaliation, as has happened in some other religions at one time or another.

What do my people say?

If you talk to any Iraq in the street, whether he/she is Sunni, Shiaa, or Christian, they will say they hate and condemn the killing and atrocities. The Sunnis and the Shiaas in Iraq are saying this fight is not our fight against each other, as we have marriages and blood relations between us. We live together in the same neighborhoods for years, and we share the happiness and sadness times. We attend each other’s weddings and funerals and share memories of our children growing up together, playing and loving each other. Even in this time of crisis, we still help each other. I witnessed a Sunni family, forced to leave by militia gunmen, who received shelter, food, and clothing from some Shiaa families who all condemned this action.

Everyone there believes the atrocities and genocide are part of a huge conspiracy to destroy the country by dividing it into sectors and groups, eliminating its educators, wasting its natural resources, and by planting hate and revenge inside the children. Who is leading this conspiracy? Not America. The average Iraqi person, including me, still believes that this great country — the U.S. — can help us; we pray that indeed it does!

Is there hope?

Who can predict the future of my beloved country – not me. I know the situation is getting worse. After returning to my American home, I called my family, only to learn that the list of disastrous atrocities has worsened — a double suicide bomber attack inside the campus of Mustansyria University resulted in 70 students dead and 200 wounded. Deans and professors at the University of Baghdad were killed; others were kidnapped, ransom was paid but the families received only bodies; snipers killed the man who sells fresh fish and few others who sell vegetables and fruits on the sidewalk of one of the streets in the Karada, and the list seems endless. The latest attack on one of the high schools for girls resulted in the murder of close to a hundred innocent young girls and shocked the nation the most. This tragedy seems to anger and break the hearts of the millions of Iraqis who thought girls were somehow safe. But the terrorists proved us all wrong. No one is safe there.

I believed God is merciful and can overcome the actions of this huge conspiracy that is aiming to destroy the “cradle of civilizations” and the country of Hammurabi of the ancient Mesopotamia.

I started a chain prayer in my city and asked my friends in other cities and states to do the same. Now, I am pleading to all the descent and wonderful people of this nation and to priests, reverends, pastors, imams, rabbis in their churches, mosques and temples to pray for the wounded Iraq and its helpless people. Let us pray to the almighty to give the Iraqis strength and patience to cope with these daily tragedies and rebuff the insane terrorists who have high jacked this peaceful religion and turned it into a machine of terror. Let us pray to the Almighty for intervention to bring justice and peace to the men, women, and children of Iraq. Let us pray to the Almighty to give strength to all the soldiers and give the wisdom to the officials to guide the ship of Iraq to a safe place…amen!

Wall Street's next scandal

The SEC is investigating whether some of Wall Street's top investment banks are using inside information. Fortune's Shawn Tully explores the potentially explosive scandal.

(Fortune Magazine) -- In early February, the SEC confirmed that it was investigating whether the major brokerage houses were tipping off hedge funds to the trades the brokers handle for big clients like mutual funds. If that's happening, it would be a scandal.

The SEC is also likely to scour trading records to see if the brokers are using info about clients' moves to invest their own capital. If the SEC finds evidence that they are, the scandal would be enormous - and go to the heart of Wall Street's profit machine.

By Shawn Tully, Fortune editor-at-large


ACTION ALERT: Israel Brings Apartheid to NJ - Speak out against the Teaneck Apartheid Settlement Fair!

From: "New Jersey Solidarity"
Date: Wed, 21 Feb 2007 08:21:01 -0500
Local: Wed, Feb 21 2007 6:21 am

Subject: ACTION ALERT: Israel Brings Apartheid to NJ - Speak out against the Teaneck Apartheid Settlement Fair!


*Israel brings Apartheid to New Jersey!* **
*Speak out against the Teaneck Apartheid Settlement Fair!*


While the Zionist State of Israel uses violent means to prevent Palestinian
refugees from returning to Palestine, "Amana – The Settlement Movement" will
host a real estate fair in New Jersey to recruit more colonizers to
illegally occupy Palestinian land in the West Bank. The event announcement
declares: "Come learn how you, a group of friends or even a community can
own a home and strengthen the Zionist dream."

View the event announcement here:

Set on the hilltops of stolen Palestinian land, the illegal settlements
feature lush green yards, plentiful electricity, and beautiful views of the
land of Palestine. In the villages below, Palestinians are forced to endure
a brutal occupation, subjected to an apartheid system of checkpoints,
closures and curfews. Incursions by zionist militants (also known as the
"IDF") are frequent, with the murder and maiming of Palestinians of all
ages, arrests and detentions, home demolitions and harassment - all enforced
sentences for the crime of being Palestinian, and all committed with the end
goal of ridding Palestine of Palestinians.

The town of Teaneck, New Jersey is allowing Congregation Bnai Yeshurun to
host a racially exclusive real estate fair on Sunday, February 25th at 641
West Engelwood Ave. Ten illegal settlements will be represented, making
Palestinian land available to Jewish American citizens, but not to

The inhabitants of these colonies regularly terrorize the Palestinian
communities whose land they occupy, carrying weaponry with which to attack
Palestinians. Settlers regularly attack Palestinians, harassing and beating
them as Palestinians attempt to live on their own land. Settlers are rarely
prosecuted for their violent behavior, and when they are, receive little
punishment. At the same time, Palestinians living under brutal military
occupation and the settlers' guns, arrested minutes away from these
settlements, are subject to arbitrary detention, military courts, and
extensive political imprisonment. The universal international consensus,
despite the dominance of US power at institutions like the UN, is that these
settlements are unquestionably illegal under international law and have been
condemned by the UN on numerous occasions.

Although in Palestine the Zionist State of Israel uses weapons, terror and
even its courts to maintain a system of apartheid which discriminates
against Palestinians, people's struggle in the U.S. has resulted in laws
which are intended to prevent discrimination based on race, color, religion,
sex, age, national origin, or disability. Nevertheless, this real estate
fair for illegal colonies discriminates against non-Jews, primarily
Palestinians whose land was stolen to create these "real estate
opportunities." As such, this real estate fair represents the epitome of
housing discrimination of a sort that is absolutely illegal within the U.S.

Please take action now to express your outrage about a fair for the sale of
stolen Palestinian land taking place in New Jersey!

*1. CALL UPON THE MAYOR* to speak out against this discriminatory sale of
stolen land in Teaneck:

Mayor Elie Katz - Call: 201-715-5179

*2. CALL UPON THE TEANECK MUNICIPAL MANAGER* to condemn this apartheid land
sale in Teaneck:

Municipal Manager Helene Fall - Call: 201-837-4807

discriminatory sale taking place in New Jersey:

Call: 973-977-4500

*4. WRITE LETTERS TO THE EDITOR* to the Bergen Record and the Herald News -
express your outrage at this apartheid land sale and the pressing need for
justice; make reference to the points above:

Write to the Bergen Record:
Write to the Herald News:
Contribute to Indymedia:

*5. PROTEST.* Teaneck community members and other concerned citizens are
planning to protest the fair on Saturday, February 25. They have applied for
permits. Please watch for announcements about planned protests and contact
us with questions; we will provide you with updates!
Our silence allows apartheid to continue. Join us and speak out!

New Jersey Solidarity - Activists for the Liberation of Palestine

Berger Case Still Roils Archives, Justice Dept.

By R. Jeffrey Smith

Washington Post Staff Writer
Wednesday, February 21, 2007; A13

In a chandeliered room at the Justice Department, the longtime head of the counterespionage section, the chief of the public integrity unit, a deputy assistant attorney general, some trial lawyers and a few FBI agents all looked down at their pant legs and socks.

While waving his own leg in the air in illustration, Paul Brachfeld, inspector general of the National Archives and Records Administration, asked the group rhetorically if "something white" could be easily mistaken if it was wrapped around their legs, beneath their pant legs.

Under debate during the Nov. 23, 2004, meeting was Brachfeld's contention that President Clinton's former national security adviser Samuel R. "Sandy" Berger could have stolen original, uncatalogued, highly classified terrorism documents 14 months earlier by wrapping them around his socks and beneath his pants, as National Archives staff member John Laster reported witnessing.

Brachfeld said he was worried that during four visits in 2002 and 2003, Berger had the opportunity to remove more than the five documents he admitted taking. Brachfeld wanted the Justice Department to notify officials of the 9/11 Commission that Berger's actions -- in combination with a bungled Archives response -- might have obstructed the commission's review of Clinton's terrorism policies.

The Justice Department spurned the advice, and some of Brachfeld's colleagues at the Archives greeted his warnings with accusations of disloyalty. But more than three years later, as Brachfeld and House lawmakers have pushed new details about Berger's actions onto the public record -- such as Berger's use of a construction site near the Archives to temporarily hide some of the classified documents -- Brachfeld's contentions have attracted fresh support.

A report last month by the Republican staff of the House Oversight and Government Reform Committee said for the first time that Berger's visits were so badly mishandled that Archives officials had acknowledged not knowing if he removed anything else and destroyed it. The committee further argued that the 9/11 Commission should have been told more about Berger and about Brachfeld's concerns, a suggestion that resonated with Philip Zelikow, the commission's former executive director.

Zelikow said in an interview last week that "I think all of my colleagues would have wanted to have all the information at the time that we learned from the congressional report, because that would have triggered some additional questions, including questions we could have posed to Berger under oath."

The commission's former general counsel, Dan Marcus, now an American University law professor, separately expressed surprise at how little the Justice Department told the commission about Berger and said it was "a little unnerving" to learn from the congressional report exactly what Berger reviewed at the Archives and what he admitted to the FBI -- including that he removed and cut up three copies of a classified memo.

"If he took papers out, these were unique records, and highly, highly classified. Had a document not been produced, who would have known?" Brachfeld said in an interview. "I thought [the 9/11 Commission] should know, in current time -- in judging Sandy Berger as a witness . . . that there was a risk they did not get the full production of records."

In an April 1, 2005, press conference and private statements to the commission, the Justice Department stated instead that Berger had access only to copied documents, not originals. They also said the sole documents Berger admitted taking -- five copies of a 2001 terrorism study -- were later provided to the commission.

Those assertions conflicted with a September 2004 statement to Brachfeld by Nancy Kegan Smith, who directs the Archives' presidential documents staff and let Berger view the documents in her office in violation of secrecy rules. Smith said "she would never know what if any original documents were missing," Brachfeld reported in an internal memo.

In a letter to House lawmakers last week, Acting Assistant Attorney General Richard A. Hertling did not address the issue of why the department told the commission so little. But Hertling wrote that in numerous interviews, "neither Mr. Berger nor any other witness provided the Department with evidence that Mr. Berger had taken any documents beyond the five."

Hertling said the department "stands by its investigation" and believes the guilty plea it negotiated with Berger on April 1, 2005, "was the best one possible in light of the available evidence." He also criticized the Archives staff for failing at the time to confront Berger, search him or contact security officials, saying this failure "had to be weighed against the evidence."

Brachfeld has similarly expressed frustration that Smith and others who suspected Berger of wrongdoing chose not to inform him of their suspicions until more than a week after Berger's last visit to the Archives. "If I had been notified, I would have put cameras in the room. I would have caught him leaving with documents on him. . . . We could have had FBI agents around the facility. . . . He would have been arrested," Brachfeld said.

Brachfeld pressed Justice Department officials on six occasions in 2004 to make a fuller statement to the commission about Berger's actions, to no avail. He also contacted Justice Department Inspector General Glenn A. Fine, who organized an April 2004 meeting between Brachfeld and Justice officials that convinced him that "these issues had to go before the 9/11 Commission," according to two people present.

But in a notification to the commission the following month, the department did not mention that Berger had cut up documents, that he reviewed uncatalogued originals or that Brachfeld worried that Berger's theft was greater.

In the Hertling letter, the department noted obstacles in its investigation. The FBI was not advised of the case until Oct. 15, 2003, almost two weeks after Smith concluded that Berger had stolen documents. By then, Archives General Counsel Gary Stern had called Berger and former Clinton lawyer Bruce Lindsey about it and obtained two documents from Berger, who surrendered them at home after first denying they were in his possession.

The letter also said that six months after beginning the probe and well after Berger testified to the commission, "the Department had not yet asked Mr. Berger any questions, as he had not yet agreed to an interview." Berger's lawyer, Lanny Breuer, said Berger first spoke to the FBI in March 2005 and was interviewed a second time in July of that year, after his April 1, 2005, guilty plea to unauthorized removal and retention of classified material.

Judge Deborah A. Robinson imposed a stiffer penalty in the case than the Justice Department sought, fining Berger a total of $56,905, canceling his security clearance, and requiring monthly reporting to a probation officer for two years. Breuer said Berger has also picked up trash in Virginia parks for 100 hours to fulfill a community service requirement, and he criticized the renewed attention to Berger's case.

"It never ceases to amaze me how the most trivial things can be politicized. It is the height of unfairness . . . for this poor guy, who clearly made a mistake," Breuer said.

Some of Brachfeld's colleagues have not been cheered by his new congressional support. An Archives lawyer, who Brachfeld said was one of those involved in the Berger case, this month sent Brachfeld an e-mail accusing him of poor judgment and stating that "I don't think it comes as a great surprise if I were to venture the opinion that senior management at this agency have serious problems with the manner in which your office conducted itself . . . during the Berger investigation."

On Friday, Archivist Allen Weinstein assured Brachfeld in writing, however, that this criticism did "not reflect either my views or the views of the overwhelming majority of NARA employees."

Safety alarms raised at nuclear weapons plant

Federal investigators are looking into deteriorating conditions at the Pantex plant in Texas. Energy Department officials say there's no danger.

By Ralph Vartabedian

Times Staff Writer

February 21, 2007

AMARILLO, TEXAS — Electrical failures have shut down the plant. The roof has leaked. Decrepit machinery dates back more than 40 years. Safety lapses led inspectors to levy fines twice within two years. And employees, under deadline pressure, complain they are often worked past the point of exhaustion.

If this factory were producing medical devices or refining gasoline, the conditions would be serious enough. But this is where they work on nuclear bombs.

Pantex is the Energy Department's main nuclear weapons factory, a linchpin of the nation's defense for half a century. The nation no longer makes nuclear weapons, so the plant's chief roles are servicing them or dismantling them to meet the terms of disarmament pacts.

On a 25-square-mile swath of the Texas Panhandle, a series of massive white concrete domes mark the places where live nuclear weapons are opened up. The rituals and procedures inside those cells are supposed to be as strict as in any operating room, part of a safety culture that reduces any chance of an accidental nuclear explosion to one in 100 million.

But lately, outside experts are questioning whether safety margins are eroding. Federal investigators are trying to assess the overall safety of the plant, which employs 3,300 people, amid troubling safety snafus and what employees call an atmosphere of intimidation.

Energy Department officials acknowledge that the plant has fallen behind schedule on reliability testing of weapons. Long delays have occurred in decommissioning thousands of surplus warheads. They also concede the plant has maintenance problems and has violated safety procedures. But they insist there is virtually no danger of a conventional or nuclear explosion.

"Pantex is safe, no doubt," said Marty Schoenbauer, the acting chief of the Energy Department's nuclear weapons program.

Safety has improved in recent years, he said, thanks to better procedures. But outside experts, union officials and watchdog groups say the opposite is true — that safety has regressed since 2000 as the most knowledgeable senior safety experts of the Cold War era retire and the plant's condition deteriorates. Energy Department Inspector General Gregory H. Friedman is investigating safety conditions at Pantex.

"You can't run a plant on glittering platitudes and generalities and call that a safety program," said Bob Alvarez, a former deputy assistant secretary of Energy and now a senior scholar at the Institute for Policy Studies, a Washington think tank. "A nuclear detonation accident is a low probability, but it is not incredible."

The backdrop to problems at Pantex is a growing concern that the Energy Department has mismanaged the nuclear weapons program. Last year, the Defense Department bluntly said that it had lost confidence in the Energy Department, Energy Secretary Samuel Bodman has acknowledged.

"We have constraints," Bodman said in an interview, conceding the department hasn't met all of its commitments to the Pentagon. Last month, he fired the head of the nuclear weapons administration.

Conditions at Pantex began deteriorating at the end of the Cold War in 1989, when federal managers started starving the plant of funds. Billions of dollars were instead funneled into nuclear weapons laboratories, giving scientists new supercomputer centers, powerful lasers and physics instruments.

By about 2000, the leaks in Pantex's roof were so bad that workers had to cover bombs with plastic when it rained. In summer 2004, a power overload tripped transformers, causing a plant-wide blackout. Last July, another electrical failure occurred when rats gnawed through wiring, according to weekly safety reports. And in August, a storm swept over the plant that left standing puddles in nuclear production areas.

Although such conditions don't necessarily lead to accidents, the Energy Department has levied fines totaling nearly $234,000 against the contractor that operates Pantex, BWX Technologies Inc., for safety violations.

In one case, involving the disassembly of a missile warhead, technicians improperly used red vinyl tape to secure a crack in the high explosives surrounding the plutonium sphere of the hydrogen bomb. The use of the tape itself was not faulted, but technicians misread engineering instructions and caused an even bigger crack.

Federal safety inspectors found that the flawed operation "increased the opportunities for dropping all or part of the explosive during handling and hence increased the potential for a violent reaction," a finding that ran against assurances such a detonation was virtually impossible.

In the second case, technicians were extracting an assembly of high explosives and plutonium from the casing of a different missile warhead for servicing. Using a jackscrew to apply several thousand pounds of force to the explosives, technicians exceeded the allowable loads and over a three-day period violated strict safety protocols.

Dan Swaim, BWX Technologies president at Pantex, acknowledged that both incidents broke safety rules and were unacceptable, but he said there was no risk of a disaster.

"No nuclear yield was possible," Swaim said, asserting the company maintains huge safety margins that preclude any potential for a conventional or nuclear explosion. "As a guy who works here every day, I want it to be darn safe."

The problems at Pantex came to light last fall after Danielle Brian, executive director of the Project on Government Oversight, a Washington watchdog group, wrote two letters to Bodman complaining about safety. The group has cited a lengthy report in 2000 by former Energy Department safety expert Frank Rowsome, who said that a detonation caused by lightning strikes, solvent fires or other incidents at Pantex was more probable than the Energy Department was admitting.

In an interview, Rowsome, who retired in 2004, said he did not want to alarm the public, but he believed Energy Department officials were so "overly confident" and "complacent" about safety that they were not alert to deteriorating safety conditions.

Where some see problems, others see progress. Last month, Pantex finally began overhauling the B83, a nuclear bomb designed to drop from a plane, after an 18-month delay triggered when scientists discovered potentially dangerous static electricity in work cells. Schoenbauer said the delay showed how far the Energy Department would go to protect safety. Critics say it shows that hidden safety problems can still exist.

Meanwhile, Pantex also has fallen behind schedule in performing crucial surveillance tests required by laboratory scientists to certify the reliability of the bombs, Schoenbauer acknowledged. "That backlog has not affected the lab's ability to certify weapons," he said.

But Ralph Levine, who once ran the Energy Department's nuclear weapons surveillance testing, wrote a letter in 2005 asserting the backlog would allow defects in nuclear weapons to go undetected for years. As a result, he said, Energy officials removed him as manager of the program, and he retired last year.

John Duncan, who until four years ago headed surveillance testing at Pantex for Sandia National Laboratory, agreed that testing problems at Pantex are undermining confidence in the stockpile. Even today, the certifications of nuclear weapons are being made with less certainty than scientists should have, Duncan and Levine said.

"I knew we were in trouble when I started attending meetings in Washington and was told to work better, faster, cheaper," said Duncan. "They started sending people to the plant with little weapons experience."

The Energy Department confirmed Friday it planned to reduce the number of annual surveillance tests, saying the plan was better suited to an aging bomb stockpile. But Duncan said this would further erode the reliability of the weapons.

A senior federal manager at Energy Department headquarters, speaking without attribution because the interview was not authorized, endorses those concerns.

"The delays in testing and lack of resources are so significant," he acknowledged. "The real question is when the laboratories can no longer certify the reliability of the stockpile."

The workload at Pantex is likely to grow even more onerous in coming years.

Under the Moscow Treaty, the U.S. needs to get rid of about 4,000 surplus nuclear warheads. At current rates, that could take Pantex until 2050, said Harvard University nuclear weapons expert Matthew Bunn. Though there is no firm deadline, that pace is unacceptable to arms control experts, Bunn said.

The Bush administration has ordered the plant to increase dismantlements by 50% this year.

Another task looming for Pantex is modernizing the W76 missile warhead used on the Trident submarine. Hundreds of W76 warheads will have to be disassembled and rebuilt with new parts. Swaim said the W76 program would begin on schedule this year.

Pantex — named for the panhandle of Texas — has a largely blue-collar culture. The people who actually touch the weapons are known as "production technicians." They earn about $24 per hour. Engineers average $84,000 per year.

Though the jobs are sought after in Amarillo, an anonymous letter surfaced in November alleging that the plant was in serious disrepair, BWX Technologies management was letting safety slip and employees were forced to work more than 80 hours a week in some cases.

The stress of working with nuclear weapons has been exacerbated by an abusive management, said Henry Bagwell, the former chief of the Metals Trade Council, the principal union at the plant. "They treat people badly," said Bagwell, who left last year after 24 years at the plant.

Bagwell said that when he attempted to raise a health and safety problem involving toxic beryllium dust in 2003, he was demoted from X-ray technician to janitor.

"It sent a message," Bagwell said. "It was a public humiliation. Safety seriously took a back seat."

Swaim takes sharp exception to allegations that the roof leaks, labor relations are strained or that severe amounts of overtime are being forced on workers. After the letter surfaced, Swaim said an audit showed overtime averaged just 15% over the normal 40-hour work week, though some individuals racked up more.

"I told my guys no more than 72 hours a week," he said.

The New Road to Serfdom: An illustrated guide to the coming real estate collapse

By Michael Hudson

Michael Hudson is Distinguished Professor of Economics at the University of Missouri, Kansas City and the author of many books, including "Super Imperialism: The Origin and Fundamentals of U.S. World Dominance."

Nigel Holmes was the graphics director of Time magazine for sixteen years and is the author of Wordless Diagrams.

Even men who were engaged in organizing debt-serf cultivation and debt-serf industrialism in the American cotton districts, in the old rubber plantations, and in the factories of India, China, and South Italy, appeared as generous supporters of and subscribers to the sacred cause of individual liberty.

- H. G. Wells, The Shape of Things to Come


The New Road to Serfdom: An illustrated guide to the coming real estate collapse

By Michael Hudson

Michael Hudson is Distinguished Professor of Economics at the University of Missouri, Kansas City and the author of many books, including "Super Imperialism: The Origin and Fundamentals of U.S. World Dominance."

Nigel Holmes was the graphics director of Time magazine for sixteen years and is the author of Wordless Diagrams.

Even men who were engaged in organizing debt-serf cultivation and debt-serf industrialism in the American cotton districts, in the old rubber plantations, and in the factories of India, China, and South Italy, appeared as generous supporters of and subscribers to the sacred cause of individual liberty.

- H. G. Wells, The Shape of Things to Come


The New Road to Serfdom: An illustrated guide to the coming real estate collapse

Old 02-19-07, 11:36 AM

New Road to Serfdom

The New Road to Serfdom

An illustrated guide to the coming real estate collapse

By Michael Hudson

Michael Hudson is Distinguished Professor of Economics at the University of Missouri, Kansas City and the author of many books, including "Super Imperialism: The Origin and Fundamentals of U.S. World Dominance."

Nigel Holmes was the graphics director of Time magazine for sixteen years and is the author of Wordless Diagrams.
Even men who were engaged in organizing debt-serf cultivation and debt-serf industrialism in the American cotton districts, in the old rubber plantations, and in the factories of India, China, and South Italy, appeared as generous supporters of and subscribers to the sacred cause of individual liberty.
- H. G. Wells, The Shape of Things to Come
Never before have so many Americans gone so deeply into debt so willingly. Housing prices have swollen to the point that we've taken to calling a mortgage–by far the largest debt most of us will ever incur–an "investment." Sure, the thinking goes, $100,000 borrowed today will cost more than $200,000 to pay back over the next thirty years, but land, which they are not making any more of, will appreciate even faster. In the odd logic of the real estate bubble, debt has come to equal wealth.

And not only wealth but freedom–an even stranger paradox. After all, debt throughout most of history has been little more than a slight variation on slavery. Debtors were medieval peons or Indians bonded to Spanish plantations or the sharecropping children of slaves in the postbellum South. Few Americans today would volunteer for such an arrangement, and therefore would-be lords and barons have been forced to develop more sophisticated enticements.

The solution they found is brilliant, and although it is complex, it can be reduced to a single word–rent. Not the rent that apartment dwellers pay the landlord but economic rent, which is the profit one earns simply by owning something. Economic rent can take the form of licensing fees for the radio spectrum, interest on a savings account, dividends from a stock, or the capital gain from selling a home or vacant lot. The distinguishing characteristic of economic rent is that earning it requires no effort whatsoever. Indeed, the regular rent tenants pay landlords becomes economic rent only after subtracting whatever amount the landlord actually spent to keep the place standing.

Most members of the rentier class are very rich. One might like to join that class. And so our paradox (seemingly) is resolved. With the real estate boom, the great mass of Americans can take on colossal debt today and realize colossal capital gains—and the concomitant rentier life of leisure—tomorrow. If you have the wherewithal to fill out a mortgage application, then you need never work again. What could be more inviting—or, for that matter, more egalitarian?

That’s the pitch, anyway. The reality is that, although home ownership may be a wise choice for many people, this particular real estate bubble has been carefully engineered to lure home buyers into circumstances detrimental to their own best interests. The bait is easy money. The trap is a modern equivalent to peonage, a lifetime spent working to pay off debt on an asset of rapidly dwindling value.

Most everyone involved in the real estate bubble thus far has made at least a few dollars. But that is about to change. The bubble will burst, and when it does, the people who thought they would be living the easy life of a landlord will soon find that what they really signed up for was the hard servitude of debt serfdom.

1 The new road to serfdom begins with a loan. Since 2003, mortgages have made up more than half of the total bank loans in America—more than $300 billion in 2005 alone. Without that growing demand, banks would have seen almost no net loan growth in recent years.

Mortgages account for most of the net growth in debt since 2000 - billions

2 Why is the demand for mortgage debt so high? There are several reasons, but all of them have to do with the fact that banks encourage people to think of mortgage debt in terms of how much they can afford to pay in a given month—how far they can stretch their paychecks—rather than in terms of the total amount of the loan. A given monthly payment can carry radically different amounts of debt, depending on the rate of interest and how long those payments last. The purchasing power of a $1,000 monthly payment, for instance, nearly triples as the debt lingers and the interest rate declines.

A $1,000 monthly payment can carry different levels of debt

3 As it happens, banks are increasingly unhurried about repayment. Nearly half the people buying their first homes last year were allowed to do so with no money down, and many of them took out so-called interest-only loans, for which payment of the actual debt—amortization—was delayed by several years. A few even took on “negative amortization” loans, which dispense entirely with payments on the principal and require only partial payment of the interest itself. (The extra interest owed is simply added to the total debt, which can grow indefinitely.) The Federal Reserve, meanwhile, has been pushing interest rates down for more than two decades.

A $1,000 monthly payment can carry different levels of debt

4 The IRS has helped create demand for debt as well by allowing tax breaks—the well-known home-mortgage deduction, for instance—that can transform a loan into an attractive tax shelter. Indeed, commercial real estate investors hide most of their economic rent in “depreciation” write-offs for their buildings, even as those buildings gain market value. The pretense is that buildings wear out or become obsolete just like any other industrial investment. The reality is that buildings can be depreciated again and again, even as the property’s market value increases.

corporations hide their real estate profits behind depreciation

5 Local and state governments have done their share too, by shifting the tax burden from property to labor and consumption, in the form of income and sales taxes. Since 1929, the proportion of tax burden has almost completely reversed itself.

the tax burden has shifted from property to labor and consumption

6 In recent years, though, the biggest incentive to home ownership has not been owning a home per se, or even avoiding taxes, but rather the eternal hope of getting ahead. If the price of a $200,000 house shoots up 15 percent in a given year, the owner will realize a $30,000 capital gain. Many such owners are spending tomorrow’s capital gain today by taking out home-equity loans. For families whose real wages are stagnant or falling, borrowing against higher property prices seems almost like taking money from a bank account that has earned dividends. In a study last year, Alan Greenspan and James Kennedy found that new home-equity loans added $200 billion to the U.S. economy in 2004 alone.

real estate prices have far outpaced national income

7 It is also worth noting that capital gains—economic rent “earned” without any actual labor or industrial investment—are increasingly untaxed.

capital gains are taxed at a lower rate than ever top rate

8 All of these factors have combined to lure record numbers of buyers into the real estate market, and home prices are climbing accordingly. The median price of a home has more than doubled in the last decade, from $109,000 in 1995 to a peak of more than $206,000 in 2005. That growth far outpaces the consumer price index, and yet housing affordability—the measure of those month-to-month housing costs—has remained about the same.

housing prices have far outpaced consum er prices, even as m onthly payments remain affordable

9 That sounds like good news. But those rising prices also mean that more people owe more money to banks than at any other time in history. And that’s not just in terms of dollars—$11.8 trillion in outstanding mortgages—but also as a proportion of the national economy. This debt is now on track to surpass the size of America’s entire gross domestic product by the end of the decade.

mortgage debt is rising as a proportion of gdp

10 Even that huge debt might not seem so bad, what with those huge capital gains beckoning from out there in the future. But the boom, alas, cannot last forever. And when the growth ceases, the market will collapse. Understanding why, though, requires a quick detour into economic theory. We often think of “the economy” as no more than a closed loop between producers and consumers. Employers hire workers, the workers create goods and services, the employers pay them, and the workers use that money to buy the goods and services they created.

the production/consumption economy

11 As we have seen, though, the government also plays a significant role in the economy. Tax hikes drain cash from the circular flow of payments between producers and consumers, slowing down overheated economies. Deficit spending pumps more income into that flow, helping pull stalled economies out of recession. This is the classical policy model associated with John Maynard Keynes.

the keynesian economy

12 A third actor also influences the nation’s fortune. Economists call it the FIRE sector, short for finance, insurance, and real estate. These industries are so symbiotic that the Commerce Department reports their earnings as a composite. (Banks require mortgage holders to insure their properties even as the banks reach out to absorb insurance companies. Meanwhile, real estate companies are organizing themselves as stock companies in the form of real estate investment trusts, or REITs—which in turn are underwritten by investment bankers.) The main product of these industries is credit. The FIRE sector pumps credit into the economy even as it withdraws interest and other charges.

the FIRE economy

13 The FIRE sector has two significant advantages over the production/consumption and government sectors. The first is that interest wealth grows exponentially. That means that as interest compounds over time, the debt doubles and then doubles again. The eighteenth-century philosopher Richard Price identified this miracle of compound interest and observed, somewhat ruefully, that had he been able to go back to the day Jesus was born and save a single penny—at 5 percent interest, compounded annually—he would have earned himself a solid gold sphere 150 million times bigger than Earth.

the miracle of compound interest

14 The FIRE sector’s other advantage is that interest payments can quickly be recycled into more debt. The more interest paid, the more banks lend. And those new loans in turn can further drive up demand for real estate—thereby allowing homeowners to take out even more loans in anticipation of future capital gains. Some call this perpetual-motion machine a “post-industrial economy,” but it might more accurately be called a rentier economy. The dream is that the FIRE sector will expand to embrace the fortune of every American—that we need not work or produce anything, or, for that matter, invest in new technology or infrastructure for the nation. We certainly need not pay taxes. We need only participate in the boom itself. The miracle of compound interest will allow every one of us to be a rentier, feasting on interest, dividends, and capital gains.

the rentier economy

15 In reality, alas, we can’t all be rentiers. Just as, in Voltaire’s phrase, the rich require an abundant supply of the poor, so too does the rentier class require an abundant supply of debtors. There is no other way. In fact, the vast majority of Americans have seen their share of the rental pie decrease over the last two decades, even as the real estate pie as a whole has expanded. Everyone got a little richer, but rich people got much, much richer.

rich people are getting a bigger share of overall economic rent

16 We will be hard-pressed to maintain even this semi-blissful state. Like any living organism, real economies don’t grow exponentially, or even in a straight line. They taper off into an S-curve, the victim of their own successes. When business is good, the demand for labor, raw materials, and credit increases, which leads to large jumps in wages, prices, and interest rates, which in turn act to depress the economy. That is where the miracle of compound interest founders. Although many people did save money at interest two thousand years ago, nobody has yet obtained even a single Earth-volume of gold. The reason is that when a business cycle turns down, debtors cannot pay, and so their debts are wiped out in a wave of bankruptcy along with all the savings invested in these bad loans.

the miracle of compound interest will inevitably confront the s-curve of reality

17 Japan learned this lesson in the Nineties. As the price of land went up, banks lent more money than people could afford to pay interest on. Eventually, no one could afford to buy any more land, demand fell off, and prices dropped accordingly. But the debt remained in place. People owed billions of yen on homes worth half that—homes they could not sell. Many commercial owners simply went into foreclosure, leaving the banks not only with “non-performing loans” that were in fact dead losses but also with houses no one wanted—or could afford—to buy. And that lack of incoming interest also meant that banks had no more reserves to lend, which furthered the downward spiral. Britain’s similarly debt-burdened economy inspired a dry witticism: “Sorry you lost your job. I hope you made a killing on your house.”

in japan, real estate prices fell as quickly as they rose

18 We have already reached our own peak. As of last fall, even Alan Greenspan had detected “signs of froth” in the housing market. Home prices had “risen to unsustainable levels” in some places, he said, and would have exceeded the reach of many Americans long ago if not for “the dramatic increase in the prevalence of interest-only loans” and “other, more exotic forms of adjustable-rate mortgages” that “enable marginally qualified, highly leveraged borrowers to purchase homes at inflated prices.” If the trend continues, homeowners and banks alike “could be exposed to significant losses.” Interest rates, meanwhile, have begun to creep up.

interest rates are on the rise

19 So: America holds record mortgage debt in a declining housing market. Even that at first might seem okay—we can just weather the storm in our nice new houses. And in fact things will be okay for homeowners who bought long ago and have seen the price of their homes double and then double again. But for more recent homebuyers, who bought at the top and who now face decades of payments on houses that soon will be worth less than they paid for them, serious trouble is brewing. And they are not an insignificant bunch.

the annual sale of existing homes has more than doubled since 1989 - millions of homes

20 The problem for recent homebuyers is not just that prices are falling; it’s that prices are falling even as the buyers’ total mortgage remains the same or even increases. Eventually the price of the house will fall below what homeowners owe, a state that economists call negative equity. Homeowners with negative equity are trapped. They can’t sell—the declining market price won’t cover what they owe the bank—but they still have to make those (often growing) monthly payments. Their only “choice” is to cut back spending in other areas or lose the house—and everything they paid for it—in foreclosure.

negative equity traps debtors

Free markets are based on choice. But more and more homeowners are discovering that what they got for their money is fewer and fewer choices. A real estate boom that began with the promise of “economic freedom” almost certainly will end with a growing number of workers locked in to a lifetime of debt service that absorbs every spare penny. Indeed, a study by The Conference Board found that the proportion of households with any discretionary income whatsoever had already declined between 1997 and 2002, from 53 percent to 52 percent. Rising interest rates, rising fuel costs, and declining wages will only tighten the squeeze on debtors.

But homeowners are not the only ones who will pay. The overall economy likely will shrink as well. That $200 billion that flowed into the “real” economy in 2004 is already spent, with no future capital gains in the works to fuel more such easy money. Rising debt-service payments will further divert income from new consumer spending. Taken together, these factors will further shrink the “real” economy, drive down those already declining real wages, and push our debt-ridden economy into Japan-style stagnation or worse. Then only the debt itself will remain, a bitter monument to our love of easy freedom.

Chart Sources
1 Federal Reserve; 2 mortgage calculator; 3 Freddie Mac; 4,5 Bureau of Economic Analysis; 6 Federal Reserve and Bureau of Economic Analysis; 7 U.S. Treasury Department; 8 Moody’s and Bureau of Labor Statistics; 9 Federal Reserve and Bureau of Economic Analysis; 15 Center on Budget and Policy Priorities; 17 Japan Real Estate Institute; 18 Federal Housing Finance Board; 19 National Association of Realtors.


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Hookergate Scandal Cost: American Lives

Feb 21 2007--Venice,FL

by Daniel Hopsicker

They’re calling it “Hookergate.”

But what's lost in that gleeful name is that the massive corruption exposed by last week’s indictment of former CIA apparatchik “Dusty Foggo” and defense-contractor-cum-bagman Brent Wilkes is the biggest national scandal, in terms of dollars, in American history.

It's light years more serious than just another Washington sex scandal.

According to the company’s own website, Randy Cunningham steered $500 million in defense contracts in less than a decade to Brent Wilkes’ start-up San Diego software firm.

A secret cabal of former Iran Contra “players”—Wilkes and Foggo both spent their salad days practicing in Honduras during the Contra war—have engineered the theft of hundreds of millions of dollars.

America's national security has been seriously compromised. The U.S. Defense budget had enough money to photocopy old maps of Panama, and pay for Randy the Duke-ster's "incidentals" like yachts on the Potomac and hookers in Hawaii, but could not find the money to pay for effective body armor for American troops.

Some lethal-ass 'Monkey Business'
This is no comic burlesque. This is a scandal that’s cost hundreds of American lives.

When the limousine of the powerful Chairman of the House Ways and Means Committee was pulled over beside the Tidal Basin in Washington, D.C. by U.S. Park Police late one night in 1974, and stripper Fannie the "Argentine Firecracker" Foxe used the opportunity to jump out and dive into the water, it was bad news for Wilbur Mills...

But nobody died.

When photos taken on a luxury yacht in Miami called the “Monkey Business” turned up in the National Inquirer showing party girl and future anti-porn advocate Donna Rice perched on leading Presidential candidate Gary Hart’s bony knees, it ended Hart's 1988 presidential campaign.

But nobody died.

Life During Wartime

When Congressman Wayne Hayes gave a raise to a staffer on the House Administration Committee named Elizabeth Ray who also just happened to be his long-time mistress, he suffered acutely when she famously admitted: “I can't type. I can't file. I can't even answer the phone.”

But nobody died.

Monica Lewinsky lost her favorite blue dress. Gennifer Flowers scored a book deal...

But nobody died.

The true cost of Randy “Duke” Cunningham’s Watergate “Poke-her” parties and Hawaiian Islands blowjobs, however, will ultimately not be reckoned by the several hundred million dollars he squandered of what should have been money used to strengthen America’s national defense...

The misappropriation of millions from the defense budget of the United States of America didn’t occur in an historical vacuum.

It occurred in the middle of a war.

Fiddling in Hawaii while Americans died

The incident most often cited in news accounts about the indictment against Cunningham’s alleged partner-in-crime, Brent Wilkes involves a vacation stay in a $6,600-per-night suite at the Hapuna Beach Prince Hotel in Hawaii, during which Wilkes felt the need to engage the services of two prostitutes on successive nights for his client Cunningham and himself.

“On or about August 16, 2003, at approximately 11 pm, defendant Wilkes arranged to have Prostitute ‘A’ and Prostitute ‘C’ available for himself and coconspirator Cunningham. Pursuant to Cunningham’s request, Wilkes arranged for the Congressman to get a different prostitute for the second evening.”

The press had a field day. Questions were even raised about the gender of the prostitutes...

Hilarity ensued.

But the mirth leaves a bitter aftertaste when you consider what else was going on in the world at the same time as Wilkes and the Duke-ster were romping with prosties in Hawaii on U.S. Defense Department cash.

In plain terms, because of the crimes of Cunningham, Wilkes, Foggo, and numerous un-indicted co-conspirators... American soldiers died.

"Non-priority" items were "not a priority."

Just one month after the Duke-ster was getting his rocks off in Hawaii, a story in the Los Angeles Times contained this headline: “Why must Americans in Iraq face death because of outmoded body armor?”

Reported Jonathon Turley:

“SUZANNE Werfelman is a mother and a teacher who has been shopping for individual body armor. This is not in response to threats from her elementary-class students in Sciota, Pa.; it's a desperate attempt to protect her son in Iraq.

“Like many other U.S. service members in Iraq, her son was given a Vietnam-era flak jacket that cannot stop the type of weapons used today. It appears that parents across the country are now purchasers of body armor because of the failure of the military to supply soldiers with modern vests.

“For many GIs, Iraq appears to be a strictly BYOB war -- Bring Your Own Bulletproofs.”

“Most U.S. troops were supplied with Vietnam-era flak jackets, designed to protect the wearer from shrapnel but not modern-day ammunition. The new vests, called Interceptors, are made of Kevlar; they're a third lighter than the old ones, and have pockets for ceramic plates to protect vital organs.

“Seven months after the end of the war, there were still approximately 40,000 soldiers-nearly one-third of the troops in Iraq-without fully functioning Kevlar vests designed to stop a round from an AK-47, the most common automatic rifle in the world.”

When Turley called the Pentagon to talk about the vests, a procurement officer told him new vests were a "non-priority" item," like tents.

Military brass "spending in other areas."

“It is unclear how we got into this predicament, but it is worthy of a congressional investigation -- particularly when it comes to the failure to equip all military units with the modern vests before the Iraq war. After all, the military brass appears to be spending in other areas."

With hindsight this seems to be particularly prescient... Did Turley know about the hookers?

The answer to what this all means in terms of now-dead American soldiers can be found in a story in the January 7, 2006 New York Times with the headline: “Pentagon Study Links Fatalities To Body Armor.”

“A secret Pentagon study has found that as many as 80 percent of the marines who have been killed in Iraq from wounds to the upper body could have survived if they had had extra body armor.

“The ceramic plates in vests now worn by the majority of troops in Iraq cover only some of the chest and back. In at least 74 of the 93 fatal wounds that were analyzed in the Pentagon study of marines from March 2003 through June 2005, bullets and shrapnel struck the marines' shoulders, sides or areas of the torso where the plates do not reach.

“The shortages come down to money and priorities. In 1998, Interceptors (state of the art vests) were available and issued to armies around the world."

“Almost from the beginning, some soldiers asked for additional protection to stop bullets from slicing through their sides. In the fall of 2003, when troops began hanging their crotch protectors under their arms, the Army's Rapid Equipping Force shipped several hundred plates to protect their sides and shoulders. Individual soldiers and units continued to buy their own sets."

Screaming louder than Cunningham's hookers
“The Pentagon has been collecting the data on wounds since the beginning of the war in March 2003 in part to determine the effectiveness of body armor.

"The military's medical examiner, Dr. Craig T. Mallak, told a military panel in 2003 that the information 'screams to be published.'"

“The findings and other research by military pathologists suggests that an analysis of all combat deaths in Iraq, including those of Army troops, would show that 300 or more lives might have been saved with improved body armor.”

The information may have been screaming, but apparently couldn’t be heard over the moans of “Duke! Duke!” coming from Cunningham’s hookers.

At the time the analysis was done, 1,706 American troops had died in combat. Do the math: today twice as many have died.

So 600 American soldiers might still be alive, had they had state of the art body armor.

Cunningham's hookers: Late model, or older?
The Wilkes indictment doesn't specify whether the prostitutes Cunningham was poking in Hawaii were brand new shiny models or ones whose treads had already begun showing some wear. But the answer seems pretty obvious.

What makes all this tragic almost beyond words is this statement from the story in the N.Y. Times: Even at retail prices, it would have cost less than $97 million to outfit each of the 150,000 soldiers in Iraq with state-of-the-art vest plates.

Hell, the Defense Department's 'black budget' spent more money than that with Wilkes’ company just to Xerox old maps.

But "600 American soldiers" is just a number, an abstraction.

We need to bring the story down to the human level, to the death of one American soldier.

Meet Mark Evnin.

"Left lower abdomen! I can't feel my toes!"

A powerful story in the April 20, 2003 New York Times Sunday magazine by Times editor by Peter Maass contained a vivid description of the death of one American soldier:

“The attack began at dawn with an artillery barrage that had excited marines next to my vehicle. They yelled "Bam! Bam!" as each shell was fired into the air.

Tanks led the way into town, and as I stayed a kilometer behind at a medic station, the sounds of battle commenced, mortars and machine-gun fire that were accompanied, as ever, by the visuals of war -- smoke plumes that were an arsonist's dream.

“A half-hour into the battle, a Humvee raced out of the city and stopped at the medic station. A marine, whose body was rag-doll floppy, was pulled out and put on a stretcher. A marine doctor and medics surrounded him. His clothes were stripped off and needles and monitors placed on and into his body, and the dialogue of battlefield medicine began among the team, all of whom had slung their M-16's over their backs as they tried to save their comrade's life.

"Left lower abdomen."

"He's in urgent surgical."

"Wriggle your toes for me."

"Ow, ow."

"He needs medevac, now."


"My arms are numb."

"Keep talking, Evnin."

"Chaplain, I'm not going to die."

"His name was Mark Evnin. He was a corporal, a sniper who was in one of the lead vehicles going into Al Kut. Iraqi fighters were waiting in ambush and had fired the first shots; one of them got him.

"Keep talking to us. Where are you from?"

"Remon," he mumbled.

"Where? Where are you from?"


Evnin was not doing well. The battalion chaplain, Bob Grove, leaned over him, and because the chaplain knew Evnin was Jewish, he pulled out of his pocket a sheet with instructions for "emergency Jewish ministration."

Grove read the Sh'ma, which begins, "Hear, O Israel, the Lord our God." Then he began reading the 23rd Psalm, at which point Evnin said, "Chaplain, I'm not going to die."

A Chinook landed 50 yards away. Evnin's stretcher was lifted from the asphalt and rushed to the chopper. Shortly after he was airborne, he went into shock and died.”

"Can we please come inside ma'am?"
Several months later the New York Times did a story on June 1, 2003 about the growing number of deaths in Iraq focusing on what it was like when their loved ones got the news.

Talk about pathos. They interviewed Mark Evnin’s mom:

“Mindy Evnin had changed into robe and slippers, preparing for bed, when she heard the knock on the front door. For a second, a thought flashed through her mind. Could this be "the knock?" Had something happened to her son Mark, a Marine corporal serving in Iraq?

“Of course not, she thought. But there, on her porch in Burlington, Vt., stood three men in uniform.

"Just tell me if he's been wounded, dead or missing," she asked immediately.

"Could we please come inside, ma'am?" asked one of them, a Marine major.”

Where's there's life, there's hope.

Responding to the charges against him in a statement late last week, Brent Wilkes stated:

“Nothing in life prepares you for the helpless feeling of trying to comfort a child who cries in anger or fear resulting from a false 'news' story or a cruel comment from a classmate.

"The overwhelming nature of the attack robs you of the ability to do that which a father and husband put first, to care for and comfort his family."

“Leaks of false information had destroyed his reputation, family and business,” said Wilkes, and made his life “a living hell.”

Not yet, Mr. Wilkes. But there's reason for hope.

NEXT: DUNCAN HUNTER, Presidential Candidate & Un-indicted Co-conspirator