Tuesday, March 27, 2007

The Forecast for Foreclosures: Business Week

Editor's note: I am moving to post at the secondary blog(also see new articles below).
Real Estate March 26, 2007, 12:00AM EST te

Don't be fooled by falling foreclosure rates and rising home sales—many parts of the U.S. are still hurting from the housing slowdown

Michele Johnson is no stranger to desperate phone calls, but lately they've become an even more regular occurrence. Johnson, who is chief executive of the Consumer Credit Counseling Service of Southern Nevada & Utah, says that these days, homeowners facing foreclosure are seeking out the agency's help in droves.

"There was just so much creative financing that was going for the last few years with consumers not understanding fully the potential ramifications," she explains. "Our goal here now is to mitigate their losses."

For the second month in a row, Nevada had the highest foreclosure rate of any U.S. state, with one filing for every 278 households—more than three times the national average, according to research firm RealtyTrac.

Colorado registered the second-highest rate in February, with one foreclosure for every 345 households, while Florida took third place, with one filing for every 382 homes. Others ranking among the country's top 10 states for foreclosures were Georgia, Michigan, Tennessee, Ohio, Texas, Arizona, and Indiana.

Temporary Relief?

The U.S. fared much better as a whole: RealtyTrac measured a total of 130,786 filings nationwide in February, down 4% from January's level.

February's decline, however, may prove fleeting. "A 4% decrease, for all intents and purposes, is flat," says Rick Sharga, RealtyTrac's vice-president of marketing. Foreclosures were still up 12% year-over-year, and February's total marked the first time there have ever been two back-to-back months with U.S. foreclosure numbers over 130,000, Sharga notes. January's total foreclosure figure—136,113—was the highest monthly number ever recorded by RealtyTrac.

February's drop in filings could have something to do with the 3.9% rise in existing-home sales for the month reported Mar. 23 by the National Association of Realtors.

Improving fundamentals, historically low mortgage rates, and mild weather that brought out home shoppers in December contributed to the sales increase, NAR said in a statement.

Foreclosure Jump Still Expected

Selling can be an escape route for homeowners in danger of foreclosure, and if the demand exists, the process becomes much easier. "A continued improvement on the sales side of real estate could be the quickest cure for high foreclosure rates," says Sharga.

NAR predicts that freezing temperatures in February will lead to a decline in home sales in March before a rebound later in the spring.

RealtyTrac still expects 2007 foreclosure activity to be 33% higher than in 2006 based on trends in the first two months of this year. "It appears that as subprime and FHA loans default at higher-than-anticipated rates, and lenders tighten their underwriting standards, we're going to continue to see a spike in the number of homeowners facing foreclosure," said President Jim Saccacio in a statement.

Many borrowers with adjustable-rate mortgages are simply not prepared when the rates on those loans shoot up. Low-income borrowers and those with weak credit have felt the sting of the market slowdown the most, and now tighter lending standards brought about by increased defaults are ruling out refinancing for many who may have qualified for a better loan a year ago.

Silver Lining

This is happening in states like Florida and Nevada, where speculation ran rampant during the years of double-digit home-price appreciation. "It isn't adjusting $75 or $100—payments are doubling," says Johnson of Nevada's CCCS.

When price growth abated and rates rose, many buyers that stretched to purchase a home with the intention of flipping it have been forced to foreclose. Other states, like Indiana, Michigan, and Ohio, have seen a spike in foreclosures over the last year because of crumbling industry and rising unemployment rates.

A record number of people could face the emotional trauma of losing a home in 2007, but some good may come of it. Long term, tighter lending standards will weed out possible foreclosure candidates.

"Assuming they don't reverse their progress, I'd give the market a year or two to clear out most risky loans," says Sharga. "Three years from now, we will likely see a significant foreclosure decrease."

Click here to see the states with the highest foreclosure rates in the U.S.

Roney is Real Estate writer for BusinessWeek.com.

by Maya Roney

Welcome To the Inspection Point - Part 3

Israel has occupied the West Bank and Gaza for 39 years. In 1948, 900,000 Palestinians were expelled from present day Israel. Their 6 million descendants live in refugee camps in the West Bank, Gaza and the surrounding Arab States. An 8-12 meter high wall stretches 622km annexing 13.1% of the West Bank.

Seven students and a camera visited the West Bank for three weeks in June 2006. This is a glimpse of what they encountered...

Justice Dept. May Have Tampered With New Hampshire Phone Case

Legal Affairs

Dems Allege Interference in Phone-Jamming Case


All Things Considered, March 26, 2007 · Questions about political pressure in the Justice Department are spilling over into the New Hampshire phone-jamming case.

Five years ago, New Hampshire Republicans jammed the phones of Democratic offices on Election Day, disrupting the Democrats' get-out-the-vote efforts and blocking phone calls from voters seeking rides to the polls. More than two years later, the New England coordinator for the Republican National Committee — who green-lighted the scheme — was charged with a felony and convicted.

But last week, a federal appeals court overturned the conviction.

Democrats allege that Justice Department officials in Washington interfered in the case, and they want Congress to investigate.


Who's Gorging and Who's Getting Roasted in the Economic Barbecue?

Not since the Gilded Age of the late 19th century has America witnessed such a rapid shift in the distribution of economic wealth as it has in the past 30 years.
By James M. Cypher, Dollars and Sense
Posted on March 26, 2007

Economic inequality has been on the rise in the United States for 30-odd years. Not since the Gilded Age of the late 19th century -- during what Mark Twain referred to as "the Great Barbeque" -- has the country witnessed such a rapid shift in the distribution of economic resources.

Still, most mainstream economists do not pay too much attention to the distribution of income and wealth -- that is, how the value of current production (income) and past accumulated assets (wealth) is divided up among U.S. households. Some economists focus their attention on theory for theory's sake and do not work much with empirical data of any kind. Others who are interested in these on-the-ground data simply assume that each individual or group gets what it deserves from a capitalist economy. In their view, if the share of income going to wage earners goes up, that must mean that wage earners are more productive and thus deserve a larger slice of the nation's total income -- and vice versa if that share goes down.

Heterodox economists, however, frequently look upon the distribution of income and wealth as among the most important shorthand guides to the overall state of a society and its economy. Some are interested in economic justice; others may or may not be, but nonetheless are convinced that changes in income distribution signal underlying societal trends and perhaps important points of political tension. And the general public appears to be paying increasing attention to income and wealth inequality. Consider the strong support voters have given to recent ballot questions raising state minimum wages and the extensive coverage of economic inequality that has suddenly begun to appear in mainstream news outlets like the New York Times, the Los Angeles Times, and the Wall Street Journal, all of which published lengthy article series on the topic in the past few years. Just last month, news outlets around the country spotlighted the extravagant bonuses paid out by investment firm Goldman Sachs, including a $53.4 million bonus to the firm's CEO.

By now, economists and others who do pay attention to the issue are aware that income and wealth inequality in the United States rose steadily during the last three decades of the 20th century. But now that we are several years into the 21st, what do we know about income and wealth distribution today? Has the trend toward inequality continued, or are there signs of a reversal? And what can an understanding of the entire post-World War II era tell us about how to move again toward greater economic equality?

The short answers are: (1) Income distribution is even more unequal that we thought; (2) The newest data suggest the trend toward greater inequality continues, with no signs of a reversal; (3) We all do better when we all do better. During the 30 or so years after World War II the economy boomed and every stratum of society did better -- pretty much at the same rate. When the era of shared growth ended, so too did much of the growth: the U.S. economy slowed down and recessions were deeper, more frequent, and harder to overcome. Growth spurts that did occur left most people out: the bottom 60% of U.S. households earned only 95 cents in 2004 for every dollar they made in 1979. A quarter century of falling incomes for the vast majority, even though average household income rose by 27% in real terms. Whew!

The classless society

Throughout the 1950s, 1960s, and 1970s, sociologists preached that the United States was an essentially "classless" society in which everyone belonged to the middle class. A new "mass market" society with an essentially affluent, economically homogeneous population, they claimed, had emerged. Exaggerated as these claims were in the 1950s, there was some reason for their popular acceptance. Union membership reached its peak share of the privatesector labor force in the early 1950s; unions were able to force corporations of the day to share the benefits of strong economic growth. The union wage created a target for nonunion workers as well, pulling up all but the lowest of wages as workers sought to match the union wage and employers often granted it as a tactic for keeping unions out. Under these circumstances, millions of families entered the lower middle class and saw their standard of living rise markedly. All of this made the distribution of income more equal for decades until the late 1970s. Of course there were outliers -- some millions of poor, disproportionately blacks, and the rich family here and there.

Something serious must have happened in the 1970s as the trend toward greater economic equality rapidly reversed. Here are the numbers. The share of income received by the bottom 90% of the population was a modest 67% in 1970, but by 2000 this had shrunk to a mere 52%, according to a detailed study of U.S. income distribution conducted by Thomas Piketty and Emmanuel Saez, published by the prestigious National Bureau of Economic Research in 2002. Put another way, the top 10% increased their overall share of the nation's total income by 15 percentage points from 1970 to 2000. This is a rather astonishing jump -- the gain of the top 10% in these years was equivalent to more than the total income received annually by the bottom 40% of households. To get on the bottom rung of the top 10% of households in 2000, it would have been necessary to have an adjusted gross income of $104,000 a year. The real money, though, starts on the 99th rung of the income ladder -- the top 1% received an unbelievable 21.7% of all income in 2000. To get a handhold on the very bottom of this top rung took more than $384,000.

The Piketty-Saez study (and subsequent updates), which included in its measure of annual household income some data, such as income from capital gains, that generally are not factored in, verified a rising trend in income inequality which had been widely noted by others, and a degree of inequality which was far beyond most current estimates. The Internal Revenue Service has essentially duplicated the Piketty-Saez study. They find that in 2003, the share of total income going to the "bottom" four-fifths of households (that's 80% of the population!) was only slightly above 40%. Both of these studies show much higher levels of inequality than were previously thought to exist based on widely referenced Census Bureau studies. The Census studies still attribute 50% of total income to the top fifth for 2003, but this number appears to understate what the top fifth now receives -- nearly 60%, according to the IRS.

A brave new globalized world for workers

Why the big change from 1970 to 2000? That is too long a story to tell here in full. But briefly, we can say that beginning in the early 1970s, U.S. corporations and the wealthy individuals who largely own them had the means, the motive, and the opportunity to garner a larger share of the nation's income -- and they did so.

Let's start with the motive. The 1970s saw a significant slowdown in U.S. economic growth, which made corporations and stockholders anxious to stop sharing the benefits of growth to the degree they had in the immediate postwar era.

Opportunity appeared in the form of an accelerating globalization of economic activity. Beginning in the 1970s, more and more U.S.-based corporations began to set up production operations overseas. The trend has only accelerated since, in part because international communication and transportation costs have fallen dramatically. Until the 1970s, it was very difficult -- essentially unprofitable -- for giants like General Electric or General Motors to operate plants offshore and then import their foreign-made products into the United States. So from the 1940s to the 1970s, U.S. workers had a geographic lever, one they have now almost entirely lost. This erosion in workers' bargaining power has undermined the middle class and decimated the unions that once managed to assure the working class a generally comfortable economic existence. And today, of course, the tendency to send jobs offshore is affecting many highly trained professionals such as engineers. So this process of gutting the middle class has not run its course.

Given the opportunity presented by globalization, companies took a two-pronged approach to strengthening their hand vis-à-vis workers: (1) a frontal assault on unions, with decertification elections and get-tough tactics during unionization attempts, and (2) a debilitating war of nerves whereby corporations threatened to move offshore unless workers scaled back their demands or agreed to givebacks of prior gains in wage and benefit levels or working conditions.

A succession of U.S. governments that pursued conservative -- or pro-corporate -- economic policies provided the means. Since the 1970s, both Republican and Democratic administrations have tailored their economic policies to benefit corporations and shareholders over workers. The laundry list of such policies includes:

  • new trade agreements, such as NAFTA, that allow companies to cement favorable deals to move offshore to host nations such as Mexico;
  • tax cuts for corporations and for the wealthiest households, along with hikes in the payroll taxes that represent the largest share of the tax burden on the working and middle classes;
  • lax enforcement of labor laws that are supposed to protect the right to organize unions and bargain collectively.

Exploding millionairism

Given these shifts in the political economy of the United States, it is not surprising that economic inequality in 2000 was higher than in 1970. But at this point, careful readers may well ask whether it is misleading to use data for the year 2000, as the studies reported above do, to demonstrate rising inequality. After all, wasn't 2000 the year the NASDAQ peaked, the year the dot-com bubble reached its maximum volume? So if the wealthiest households received an especially large slice of the nation's total income that year, doesn't that just reflect a bubble about to burst rather than an underlying trend?

To begin to answer this question, we need to look at the trends in income and wealth distribution since 2000. And it turns out that after a slight pause in 2000-2001, inequality has continued to rise. Look at household income, for example. According to the standard indicators, the U.S. economy saw a brief recession in 2000-2001 and has been in a recovery ever since. But the median household income has failed to recover.* In 2000 the median household had an annual income of $49,133; by 2005, after adjusting for inflation, the figure stood at $46,242. This 6% drop in median household income occurred while the inflation-adjusted Gross Domestic Product expanded by 14.4%. When the Census Bureau released these data, it noted that median household income had gone up slightly between 2004 and 2005. This point was seized upon by Bush administration officials to bolster their claim that times are good for American workers. A closer look at the data, however, revealed a rather astounding fact: Only 23 million households moved ahead in 2005, most headed by someone aged 65 or above. In other words, subtracting out the cost-of-living increase in Social Security benefits and increases in investment income (such as profits, dividends, interest, capital gains, and rents) to the over-65 group, workers again suffered a decline in income in 2005.

Another bit of evidence is the number of millionaire households -- those with net worth of $1 million or more excluding the value of a primary residence and any IRAs. In 1999, just before the bubbles burst, there were 7.1 million millionaire households in the United States. In 2005, there were 8.9 million, a record number. Ordinary workers may not have recovered from the 2000-2001 rough patch yet, but evidently the wealthiest households have!

Many economists pay scant attention to income distribution patterns on the assumption that those shifts merely reflect trends in the productivity of labor or the return to risk-taking. But worker productivity rose in the 2000-2005 period, by 27.1%. At the same time, from 2003 to 2005 average hourly pay fell by 1.2%. (Total compensation, including all forms of benefits, rose by 7.2% between 2000 and 2005. Most of the higher compensation spending merely reflects rapid increases in the health insurance premiums that employers have to pay just to maintain the same levels of coverage. But even if benefits are counted as part of workers' pay -- a common and questionable practice -- productivity growth outpaced this elastic definition of "pay" by 50% between 1972 and 2005.)

And at the macro level, recent data released by the Commerce Department demonstrate that the share of the country's GDP going to wages and salaries sank to its lowest postwar level, 45.4%, in the third quarter of 2006. And this figure actually overstates how well ordinary workers are doing. The "Wage & Salary" share includes all income of this type, not just production workers' pay. Corporate executives' increasingly munificent salaries are included as well. Workers got roughly 65% of total wage and salary income in 2005, according to survey data from the U.S. Department of Labor; the other 35% went to salaried professionals -- medical doctors and technicians, managers, and lawyers -- who comprised only 15.6% of the sample.

Moreover, the "Wage & Salary" share shown in the National Income and Product Accounts includes bonuses, overtime, and other forms of payment not included in the Labor Department survey. If this income were factored in, the share going to nonprofessional, nonmanagerial workers would be even smaller. Bonuses and other forms of income to top employees can be many times base pay in important areas such as law and banking. Goldman Sachs's notorious 2006 bonuses are a case in point; the typical managing director on Wall Street garnered a bonus ranging between $1 and $3 million.

So, labor's share of the nation's income is falling, as Figure 3 shows, but it is actually falling much faster than these data suggest. Profits, meanwhile, are at their highest level as a share of GDP since the booming 1960s.

These numbers should come as no surprise to anyone who reads the paper: story after story illustrates how corporations are continuing to squeeze workers. For instance, workers at the giant auto parts manufacturer Delphi have been told to prepare for a drop in wages from $27.50 an hour in 2006 to $16.50 an hour in 2007. In order to keep some of Caterpillar's manufacturing work in the United States, the union was cornered into accepting a contract in 2006 that limits new workers to a maximum salary of $27,000 a year -- no matter how long they work there -- compared to the $38,000 or more that long-time Caterpillar workers make today. More generally, for young women with a high school diploma, average entry-level pay fell to only $9.08 an hour in 2005, down by 4.9% just since 2001. For male college graduates, starter-job pay fell by 7.3% over the same period.

Aiding and abetting

And the federal government is continuing to play its part, facilitating the transfer of an ever-larger share of the nation's income to its wealthiest households. George W. Bush once joked that his constituency was "the haves and the have-mores" -- this may have been one of the few instances in which he was actually leveling with his audience. Consider aspects of the four tax cuts for individuals that Bush has implemented since taking office. The first two cut the top nominal tax rate from 39.6% to 35%. Then, in 2003, the third cut benefited solely those who hold wealth, reducing taxes on dividends from 39.6% to 15% and on capital gains from 20% to 15%. ( Bush's fourth tax cut -- in 2006 -- is expected to drop taxes by 4.8% percent for the top one tenth of one percent of all households, while the median household will luxuriate with an extra nickel per day.)

So, if you make your money by the sweat of your brow and you earned $200,000 in 2003, you paid an effective tax rate of 21%. If you earned a bit more, say another $60,500, you paid an effective tax rate of 35% on the additional income. But if, with a flick of the wrist on your laptop, you flipped some stock you had held for six months and cleared $60,500 on the transaction, you paid the IRS an effective tax rate of only 15%. What difference does it make? Well, in 2003 the 6,126 households with incomes over $10 million saw their taxes go down by an average of $521,905 from this one tax cut alone.

These tax cuts represent only one of the many Bush administration policies that have abetted the ongoing shift of income away from most households and toward the wealthiest ones. And what do these top-tier households do with all this newfound money? For one thing, they save. This is in sharp contrast to most households. While the top fifth of households by income has a savings rate of 23%, the bottom 80% as a group dissave -- in other words, they go into debt, spending more than they earn. Households headed by a person under 35 currently show a negative savings rate of 16% of income. Today overall savings -- the savings of the top fifth minus the dis-savings of the bottom four-fifths -- are slightly negative, for the first time since the Great Depression.

Here we find the crucial link between income and wealth accumulation. Able to save nearly a quarter of their income, the rich search out financial assets (and sometimes real assets such as houses and businesses) to pour their vast funds into. In many instances, sometimes with inside information, they are able to generate considerable future income from their invested savings. Like a snowball rolling downhill, savings for the rich can have a turbo effect -- more savings generates more income, which then accumulates as wealth.

Lifestyles of the rich

Make the rich even richer and the creative forces of market capitalism will be unleashed, resulting in more savings and consequently more capital investment, raising productivity and creating abundance for all. At any rate, that's the supply-side/neoliberal theory. However -- and reminiscent of the false boom that defined the Japanese economy in the late 1980s -- the big money has not gone into productive investments in the United States. Stripping out the money pumped into the residential real estate bubble, inflation-adjusted investment in machinery, equipment, technology, and structures increased only 1.4% from 1999 through 2005 -- an average of 0.23% per year. Essentially, productive investment has stagnated since the close of the dot-com boom.

Instead, the money has poured into high-risk hedge funds. These are vast pools of unregulated funds that are now generating 40% to 50% of the trades in the New York Stock Exchange and account for very large portions of trading in many U.S. and foreign credit and debt markets.

And where is the income from these investments going? Last fall media mogul David Geffen sold two paintings at record prices, a Jasper Johns ($80 million) and a Willem de Kooning ($63.5 million), to two of "today's crop of hedge-fund billionaires" whose cash is making the art market "red-hot," according to the New York Times.

Other forms of conspicuous consumption have their allure as well. Boeing and Lufthansa are expecting brisk business for the newly introduced 787 airplane. The commercial version of the new Boeing jet will seat 330, but the VIP version offered by Lufthansa Technik (for a mere $240 million) will have seating for 35 or fewer, leaving room for master bedrooms, a bar, and the transport of racehorses or Rolls Royces. And if you lose your auto assembly job? It should be easy to find work as a dog walker: High-end pet care services are booming, with sales more than doubling between 2000 and 2004. Opened in 2001, Just Dogs Gourmet expects to have 45 franchises in place by the end of 2006 selling hand-decorated doggie treats. And then there is Camp Bow Wow, which offers piped-in classical music for the dogs (oops, "guests") and a live Camper Cam for their owners. Started only three years ago, the company already has 140 franchises up and running.

According to David Butler, the manager of a premiere auto dealership outside of Detroit, sales of Bentleys, at $180,000 a pop, are brisk. But not many $300,000 Rolls Royces are selling. "It's not that they can't afford it," Butler told the New York Times, "it's because of the image it would give." Just what is the image problem in Detroit? Well, maybe it has something to do with those Delphi workers facing a 40% pay cut. Michigan's economy is one of the hardest-hit in the nation. GM, long a symbol of U.S. manufacturing prowess, is staggering, with rumors of possible bankruptcy rife. The best union in terms of delivering the goods for the U.S. working class, the United Auto Workers, is facing an implosion. Thousands of Michigan workers at Delphi, GM, and Ford will be out on the streets very soon. (The top three domestic car makers are determined to permanently lay off three-quarters of their U.S. assembly-line workers -- nearly 200,000 hourly employees. If they do, then the number of autoworkers employed by the Big Three -- Ford, Chrysler, and GM -- will have shrunk by a staggering 900,000 since 1978.) So, this might not be the time to buy a Rolls. But a mere $180,000 Bentley -- why not?

Had enough of the “haves”?

In the era Twain decried as the "great barbeque," the outrageous concentration of income and wealth eventually sparked a reaction and a vast reform movement. But it was not until the onset of the Great Depression, decades later, that massive labor/social unrest and economic collapse forced the country's political elite to check the growing concentration of income and wealth.

Today, it does not appear that there are, as yet, any viable forces at work to put the brakes on the current runaway process of rising inequality. Nor does it appear that this era's power elite is ready to accept any new social compact. In a recent report on the "new king of Wall Street" (a co-founder of the hedge fund/private-equity buyout corporation Blackstone Group) that seemed to typify elite perspectives on today's inequality, the New York Times gushed that "a crashing wave of capital is minting new billionaires each year." Naturally, the Times was too discreet to mention is that those same "crashing waves" have flattened the middle class. And their backwash has turned the working class every-which-way while pulling it down, down, down.

But perhaps those who decry the trend can find at least symbolic hope in the new boom in yet another luxury good. Private mausoleums, in vogue during that earlier Gilded Age, are back. For $650,000, one was recently constructed at Daytona Memorial Park in Florida -- with matching $4,000 Medjool date palms for shade. Another, complete with granite patio, meditation room, and doors of hand cast bronze, went up in the same cemetery. Business is booming, apparently, with 2,000 private mausoleums sold in 2005, up from a single-year peak of 65 in the 1980s. Some cost "well into the millions," according to one the nation's largest makers of cemetery monuments. Who knows: maybe the mausoleum boom portends the ultimate (dead) end for the neo-Gilded Age.

James M. Cypher is profesor-investigador, Programa de Doctorado en Estudios del Desarrollo, Universidad Autónoma de Zacatecas, Mexico, and a Dollars & Sense associate.

© 2007 Independent Media Institute. All rights reserved.

Torturer's Toll

A former army interrogator explains what torture is really like -- and what happens to those who inflict it.

Web Exclusive: 03.26.07

Tony Lagouranis is a 37-year-old bouncer at a bar in Chicago's Humboldt Park. He is also a former torturer. That was how he was described in an email promoting a panel discussion, "24: Torture Televised," hosted by the NYU School of Law's Center on Law and Security in New York on March 21. And he doesn't shy away from the description.

As a specialist in a military intelligence battalion, Lagouranis interrogated prisoners at Abu Ghraib, Al Asad Airfield, and other places in Iraq from January through December 2004. Coercive techniques, including the use of military dogs, waterboarding, and prolonged stress positions, were employed on the detainees, he says. Prisoners held at Al Asad Airfield, which is located approximately 110 miles northwest of Baghdad, were shackled and hung from an upright bed frame "welded to the wall" in a room in an airplane hanger, he told me in a phone interview after the NYU event. When he was having problems getting information from a detainee, he recalls, the other interrogators said, "Chain him up on the bed frame and then he'll talk to you." (Lagouranis says he didn't participate directly in hangings from the frames.)

The results of the hangings, shacklings, and prolonged stress positions -- sometimes for hours -- were devastating. "You take a healthy guy and you turn him into a cripple -- at least for a period of time," Lagouranis tells me. "I don't care what Alberto Gonzales says. That's torture."

Lagouranis was on the NYU panel -- along with Jane Mayer, a New Yorker staff writer; Stephen Holmes, an NYU School of Law professor and author of an upcoming book, The Matador's Cape: America's Reckless Response to Terror; Jill Savitt, director of public programs for Human Rights First; and Wesleyan University professor Richard Slotkin -- to talk about torture and its role in the Emmy-Award-winning 24.

The show's hero, Jack Bauer (Kiefer Sutherland), is famously ruthless in his attempts to extract information about terrorist plots from suspects in "ticking timebomb" situations. The prevailing sentiment of the show, as Mayer wrote in her February 19 New Yorker article about 24, is, "Whatever it takes." Lagouranis met with the show's creative team in California in November, she wrote. He told them that the grisly plotlines of television shows like 24 had given soldiers ideas on how to torment prisoners (for example, forcing a prisoner to listen to the sounds of men being tortured in a nearby cell -- a method that was proposed, he said, but not carried out during his time in Iraq).

The violence on 24 is horrific and almost cartoon-like in its depiction. Yet the show does have a moral conscience. One of the themes, as lead writer Howard Gordon told Mayer, is that Jack Bauer suffers over the violence he is forced to inflict on men and women in the name of national security. "Jack is basically damned," Gordon told Mayer.

Jack Bauer is, of course, a fictional character. Lagouranis, meanwhile, has seen the suffering of people who have been interrogated in Iraq. Their pain is muted in comparison to the ordeal that 24 suspects have endured. The Iraqi prisoners were not electrocuted or attacked with knives, as Mayer wrote about the terrorism suspects in 24. And Lagouranis may not be, in Hollywood discourse, "damned." But he is in a state of mind that could be described as -- at the very least -- uneasy.

Lagouranis is one of the few individuals to have spoken publicly about his experiences as an interrogator who used or saw harsh techniques inflicted on prisoners in the war. His book, Fear Up Harsh: An Army Interrogator's Dark Journey through Iraq, co-authored by Allen Mikaelian, will be published in June. But he is hardly the only one familiar with the stories. It is hard to know how many men and women have witnessed acts of detainee abuse or participated in the use of coercive interrogation methods that appear to violate international law during the Iraq war. At least nine individuals, including Lynndie R. England and her former boyfriend Charles A. Graner Jr., have been sentenced to prison for detainee-related offenses at Abu Ghraib. Others may someday face prosecution for alleged crimes and detainee abuse in the Iraq war.

Lagouranis reported the detainee abuses that he witnessed in Iraq and is not a suspect in detainee-related abuses. As he says, he followed military guidelines during interrogations. "The things I participated in were technically legal," he explains. Yet there have been repercussions. He suffered from panic attacks after his return to the United States and was placed under army psychiatric care. He received an honorable discharge from the army in July 2005.

Lagouranis studied ancient Greek at St. John's College in Santa Fe, New Mexico, and he learned Arabic at the Defense Language Institute in Monterey, California. As he explained in his book and in conversations with me, he is familiar with classical and modern texts about warfare and the Middle East as well as with international law that protects the rights of prisoners of war.

He and other soldiers discussed the Geneva Conventions during military training at Fort Gordon, Georgia, in 2003, before being deployed to Iraq. But it became clear they were not always expected to abide by them, he says. Some of the soldiers and officers had been influenced by Mark Bowden's October 2003 Atlantic Monthly article, "The Dark Art of Interrogation," which describes techniques that, in the author's words, are "excruciating for the victim" yet "leave no permanent marks and do no lasting physical harm."

"It seems to me Bowden was advocating what he calls 'torture lite,'" Lagouranis tells me. "That made an impression on a lot of people. The feeling was that what we had been taught about the Geneva Conventions was not going to be followed anymore. We would be following a new set of rules -- and that was what Bowden was talking about."

Things seemed different in Iraq. "I started realizing that most of the prisoners were innocent," Lagouranis says. "We were torturing people for no reason. I started getting really angry and really remorseful and by the time I got back I completely broke down."

Maybe that was a normal reaction, I tell him.

"That's what my shrink told me," he says. "I can just say that people don't fully realize that for a person to do that to another human being -- it definitely takes a toll."

Back during the NYU event, Lagouranis had sat behind a long table on a stage with his sleeves rolled up and his arms folded across his chest. Toward the end of the discussion, he leaned forward and told the audience that, ultimately, the abuse of prisoners could not be blamed on shows like 24. "I'm from New York City. I'm college-educated," he said. "But you put me in Iraq and told me to torture, and I did it and I regretted it later."

It is clear that he and others like him will be dealing with the fallout from the war, especially those aspects that have been hidden from public view, for a long time. "I didn't know I would discover and indulge in my own evil," he writes in his forthcoming book. "And now that it has surfaced, I fear that it will be my constant companion for the rest of my life."

By Tara McKelvey

Tara McKelvey is a Prospect senior editor.

ITT to plead guilty to illegal export of military data: DOJ

By Katherine Hunt

Last Update: 12:05 PM ET Mar 27, 2007

SAN FRANCISCO (MarketWatch) -- Defense contractor ITT Corp. (ITTITT Corp

ITT ) agreed to plead guilty to sending classified military data overseas and will pay a $100 million penalty, the Department of Justice said on Tuesday. ITT, which makes military night vision equipment for the U.S. Armed Forces, plans to plead guilty to one count each of export of defense articles without a license, and omission of statements of material facts in arms exports reports, the government said. According to information to be filed in U.S. District Court in Roanoke, ITT exported defense-related technical data to the People's Republic of China, Singapore, and the United Kingdom between March 2001 and August 2001, without first obtaining a license or written authorization from the State Department, the DOJ said.

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Interventions Without End?

By Patrick J. Buchanan

Tuesday, March 27, 2007

"Whatever happens in Iraq, retreat from the world is not an option," wrote Financial Times columnist Philip Stephens last weekend.

Why not? Because a world map highlighting those regions where the West's vital resources are located would exactly overlap a map highlighting those regions where state power is crumbling, disease and poverty are pandemic and violence rules.

"The implication of this is obvious," says Stephens.

"We can proudly declare ourselves isolationists, resolve to eschew 'imperialist adventures,' decry liberal interventionists such as Britain's Tony Blair and damn the neoconservatives around U.S. President George W. Bush. But, one way or another, the West cannot avoid getting involved. On this, moral impulse and hard-headed interests are as one."

We are fated to intervene forever. "The reality of interdependence of a world shrunk by globalization cannot be wished away."

Put me down as not so sure. For if America is defeated in Iraq, as we were in Southeast Asia, who will ever again intervene in the Middle East?

As Stephens writes, Europe's "eternal role" seems to be that of the "concerned bystander" to disasters anywhere. And, revisiting the 20th century, the United States did not declare war on the Kaiser's ally Turkey in 1917, despite the Armenian massacres. Nor did we did confront Stalin over genocide in the Ukraine. FDR recognized Stalin's regime as it perpetrated that holocaust. Nor did we intervene to halt Mao's slaughter and starvation of millions of Chinese.

America looked on during Pol Pot's genocide. Clinton stood aside in Rwanda. No one is calling for the 82nd Airborne to be dropped into Darfur.

No matter, says Stephens, the West cannot abide the emerging new world disorder. But, again, that begs the question: Who is going to intervene?

If Iraq and Afghanistan, despite the U.S. investment in blood and treasure, end in defeats, who does Stephens think is going to send troops to rescue imperiled "liberal democratic values"?

In his second inaugural, President Bush declared that America's national goal is now to "support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny on earth."

Are Americans still willing to support that utopian mission with blood and billions of dollars?

In a Gallup poll this year that posed the question, "Should the United States try to change a dictatorship to a democracy when it can, or should the United States stay out of other countries' affairs?" -- by near five to one Americans said, "Stay out." Fifteen percent said "yes" to the Bush commitment. Sixty-nine percent said to stay out of the internal affairs of other countries.

Columnist David Broder cites a Penn, Schoen poll conducted Jan. 30 to Feb. 4. By 58 percent to 36 percent, respondents said, "It is a dangerous illusion to believe America is superior to other nations; we should not be attempting to reshape other nations in light of our values."

"By an even greater proportion -- almost three to one," adds Broder, "they say the main goal of American foreign policy should be to protect the security of the United States and its allies, rather than the promotion of freedom and democracy."

By 70 percent to 27 percent, Americans agreed, "Sometimes it's better to leave a dictator in charge of a hostile country, if he is contained, rather than risk chaos that we can't control if he is brought down."

By 58 percent to 38 percent, American agreed with the statement that "if negotiating with countries that support terrorism like Iran and Syria will help protect our security interests, the U.S. should consider negotiating with them."

"Practicality trumps idealism at every turn," writes Broder.

"Idealism"? That is true only if one buys the proposition that refusing to talk to enemies and fighting unnecessary wars is idealism rather than folly. FDR and Truman talked to Stalin, Ike invited the Butcher of Budapest to Camp David, Nixon went to Beijing to talk to Mao, Reagan accepted Gorbachev's invitation to Reykjavik during the Soviet war in Afghanistan. Were all these men devoid of idealism?

Stephens believes the successors to Bush and Blair will find they have no option but to intervene to prevent the new world disorder.

Perhaps. But given the rage and revulsion Americans feel at having been stampeded into Iraq and pinioned in Baghdad, unable to stop the bleeding but unwilling to walk away in defeat, the American appetite for intervention has probably been sated for a long, long time.

U.S. global hegemony is history. Like every nation, America must now choose -- between what is vital and worth fighting for, and what may be "idealistic," but is not worth a war.

Not long ago, America produced 96 percent of all she consumed and was the most self-sufficient republic in history. With statesmanship and sacrifice, we can become so again. With leaders like we once had, we can chuck the empire. For what good has it done us?