Friday, April 4, 2008

Ron Paul questions Fed. Chairman Ben Bernanke

Ron Paul talks economy on Glenn Beck

Mosaic News - 4/3/08: World News from the Middle East

The Listening Post-Protests turned violent

This week we examine violence in Tibet and the media war fought over Palestine.

World Bank Accused of Climate Change "Hijack"

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By Ed Cropley

Bangkok - Developing countries and environmental groups accused the World Bank on Friday of trying to seize control of the billions of dollars of aid that will be used to tackle climate change in the next four decades.

"The World Bank's foray into climate change has gone down like a lead balloon," Friends of the Earth campaigner Tom Picken said at the end of a major climate change conference in the Thai capital.

"Many countries and civil society have expressed outrage at the World Bank's attempted hijacking of real efforts to fund climate change efforts," he said.

Before they agree to any sort of restrictions on emissions of the greenhouse gases fuelling global warming, poor countries want firm commitments of billions of dollars in aid from their rich counterparts.

The money will be used for everything from flood barriers against rising sea levels to "clean" but costly power stations, an example of the "technology transfer" developing countries say they need to curb emissions of gases such as carbon dioxide.

As well as the obvious arguments about how much money will be needed - some estimates run into the trillions of dollars by 2050 - rich and poor countries are struggling even to agree on a bank manager.

At the week-long Bangkok conference, the World Bank pushed its proposals for a $5-10 billion Clean Technology Fund, a $500 million "adaptation" fund and possibly a third fund dealing with forestry.

However, developing countries want climate change cash to be administered through the existing United Nations Framework Convention on Climate Change (UNFCC), which they feel is much less under the control of the Group of 8 (G8) richest countries.

"Generally we have been unpleasantly surprised by the funds," said Ana Maria Kleymeyer, Argentina's lead negotiator at the meeting.

"This is a way for the World Bank and its donor members to get credit back home for putting money into climate change in a way that's not transparent, that doesn't involve developing countries and that ignores the UNFCC process," she said.

Chemical Industry's Influence at EPA Probed

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By Lyndsey Layton

A congressional committee is investigating ties between the chemical industry and expert review panels hired by the Environmental Protection Agency to help it determine safe levels for a variety of chemical compounds.

Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee, and Rep. Bart Stupak (D-Mich.), chairman of the oversight and investigations subcommittee, have demanded documents from the EPA and the American Chemistry Council to probe the roles of nine scientists who are serving on EPA panels or have done so in the past.

The lawmakers sent a letter to the chemical industry Wednesday, expanding a probe that began earlier this month.

"Americans count on sound science to ensure that consumer products are safe," Dingell said through a spokesman yesterday. "If industry has undue influence over this science, then the public's health is endangered."

Dingell and Stupak want to know how much the chemistry council has paid consultants, lawyers, scientists and a scientific journal in efforts to affect public policy.

"I don't remember the last time Congress investigated a trade association like this," said Richard Wiles of the Environmental Working Group, which contends that the chemical industry has stacked EPA panels. "Maybe for the first time, we might find out the extent of industry influence. It's a landmark investigation and has called into question the ethics of the entire industry."

Tiffany Harrington, a spokeswoman for the chemistry council, said it supports independent scientific research and it will cooperate with the congressional request.

The lawmakers want to know why the EPA allowed the scientists in question to remain on expert panels but removed a public health scientist, Deborah C. Rice, from a panel at the chemistry council's request.

Rice chaired an EPA panel last year that reviewed safe levels for deca-BDE, a polybrominated diphenyl ether used as a fire retardant in television casings and other electronics. Deca has been found to cause cancer in mice and is a suspected human carcinogen.

As a toxicologist for the state of Maine, Rice testified before the Maine legislature about the health risks associated with deca. Maine and several other states - and this week, the European Union - have since banned the compound.

After Rice's panel completed its work, Sharon Kneiss, a vice president of the chemistry council, wrote to the EPA and called Rice "a fervent advocate of banning" deca who "has no place in an independent, objective peer review." The agency informed Rice that it was removing her from the panel, and it expunged her comments from the official record, even removing them from the EPA Web site.

The Chemistry Council "seems to argue that scientific expertise with regard to a particular chemical and its human health effects is a basis for disqualification from a peer review board," Dingell and Stupak wrote to EPA Administrator Stephen L. Johnson. "This does not seem sensible on its face."

At the same time, the EPA has allowed at least nine scientists who have received funding from chemical makers or expressed similar opinions about particular chemical compounds to remain on review panels, Dingell and Stupak wrote.

Among those scientists is Dale Sickles, who serves on a panel reviewing acrylamide. He received $93,000 from the manufacturer of the compound and $230,000 from its marketer. "I've been totally transparent throughout the process," Sickles said yesterday.

Four other scientists reached yesterday said that industry funding never influenced their research.

Scientists invited to participate in review panels are asked to disclose any conflicts or perceived conflicts. EPA guidelines say that conflicts do not automatically disqualify an expert but that the agency should make sure the panel has a balance of viewpoints.

Timothy Lyons, an EPA spokesman, said privacy issues prevent the agency from commenting on Rice or the scientists singled out by the congressional investigation. But the agency followed procedures in selecting panel members, he said.

Rice, who has declined to comment, has become a cause celebre among Bush administration critics, who say her case is symbolic of undue industry influence in public health regulation under President Bush.

"This is an administration that has put corporate interests before public health and safety, and ideological zealotry before sound science," Dingell said. "This disturbing pattern extends to EPA's peer review panels."

Should the U.S. End Aid to Israel?

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By Alison Weir

Funding Our Decline

April 1st I participated in a debate in San Francisco that raised the question of US aid to Israel.

It was highly appropriate that this debate was held two weeks before tax day, since in Israel's sixty years of existence, it has received more US tax money than any other nation on earth.

During periods of recession, when Americans are thrown out of work, homes are repossessed, school budgets cut and businesses fail, Congress continues to give Israel massive amounts of our tax money; currently, about 7 million dollars per day.

On top of this, Egypt and Jordan receive large sums of money (per capita about 1/20th of what Israel receives) to buy their cooperation with Israel; and Palestinians also receive our tax money (about 1/23rd of that to Israel), to repair infrastructure that Israeli forces have destroyed, to fund humanitarian projects required due to the destruction wrought by Israel's military, and to convince Palestinian officials to take actions beneficial to Israel. These sums should also be included in expenditures on behalf of Israel.

When all are added together, it turns out that for many years over half of all US tax money abroad has been expended to benefit a country the size of New Jersey.

It is certainly time to begin debating this disbursement of our hard-earned money. It is quite possible that we have better uses for it.

To decide whether the US should continue military aid to any nation, it is essential to examine the nature and history of the recipient nation, how it has used our military aid in the past, whether these uses are in accord with our values, and whether they benefit the American taxpayers who are putting up the money.

1. What is the history and nature of Israel?

Describing Israel is always difficult. One can either stay within the mainstream paradigm, or tell the truth. I will opt for the truth.

Drawing on scores of books by diverse authors, the facts are quite clear: Israel was created through one of the most massive, ruthless, and persistent ethnic cleansing operations of modern history. In 1947-49 about three-quarters of a million Muslims and Christians, who had originally made up 95 percent of the population living in the area that Zionists wanted for a Jewish state, were brutally forced off their ancestral land. There were 33 massacres, over 500 villages were completely destroyed, and an effort was made to erase all vestiges of Palestinian history and culture.

The fact is that Israel's core identity is based on ethnic and religious discrimination by a colonial, immigrant group; and maintaining this exclusionist identity has required continued violence against those it has dispossessed, and others who have given them refuge.

2. How has Israel used our military aid in the past?

In all of its wars except one, Israel has attacked first.

In violation of the Arms Export Control Act, which requires that US weapons only be used in "legitimate self defense," Israel used American equipment during its two invasions of Lebanon, killing 17,000 the first time and 1,000 more recently, the vast majority civilians. It used American-made cluster bombs in both invasions, again in defiance of US laws, causing the "most hideous injuries" one American physician said she had ever seen, and which, in one day in 1982 alone, resulted in the amputation of over 1,000 mangled limbs.

It has used US military aid to continue and expand its illegal confiscation of land in the West Bank and Golan Heights, and has used American F-16s and Apache Helicopters against largely unarmed civilian populations.

According to Defence for Children International, Israel has "engaged in gross violations of international human rights and humanitarian law." Between 1967 and 2003, Israel destroyed more than 10,000 homes, and such destruction continues today. A coalition of UK human rights groups recently issued a report stating that Israel's blockade of Gaza is collective punishment of 1.5 million people, warning: "Unless the blockade ends now, it will be impossible to pull Gaza back from the brink of this disaster and any hopes for peace in the region will be dashed."

In addition, Israel uses US military aid to fund an Israeli arms industry that competes with US companies. According to a report commissioned by the US Army War College, "Israel uses roughly 40 percent of its military aid, ostensibly earmarked for purchase of US weapons, to buy Israeli-made hardware. It also has won the right to require the Defense Department or US defense contractors to buy Israeli-made equipment or subsystems, paying 50 to 60 cents on every defense dollar the US gives to Israel."

Israel has used US aid to kill and injure nonviolent Palestinian, American and international activists, as well as American servicemen. Israeli soldiers in an American-made Caterpillar bulldozer crushed to death 23-year-old Rachel Corrie; an Israeli sniper shot 21-year-old Tom Hurndall in the head; Israeli soldiers shot 26-year-old Brian Avery in the face. In 1967 Israel used US-financed French aircraft to attack a US Navy ship, killing 34 American servicemen and injuring 174.

Israel has used US aid to imprison without trial thousands of Palestinians and others, and according to reports by the London Times and Amnesty International, Israel consistently tortures prisoners; including, according to Foreign Service Journal, American citizens.

3. Are these uses in accord with our national and personal values?

Not in my view.

4. Do these uses of US aid benefit American taxpayers?

While some Israeli actions have served US interests, the balance sheet is clear: Israel's use of American aid consistently damages the United States, harms our economy, and endangers Americans.

In fact, this extremely negative outcome was so predictable that even before Israel's creation virtually all State Department and Pentagon experts advocated forcefully against supporting the creation of a Zionist state in the Middle East. President Harry Truman's reply: "I am sorry gentlemen, but I have to answer to hundreds of thousands who are anxious for the success of Zionism. I do not have hundreds of thousands of Arabs among my constituents."

Through the years, as noted above, our aid to Israel has not resulted in a reliable ally.

In 1954 Israel tried to bomb US government offices in Egypt, intending to pin this on Muslims.

In 1963 Senator William Fulbright discovered that Israel was using a series of covert operations to funnel our money to pro-Israel groups in the US, which then used these funds in media campaigns and lobbying to procure even more money from American taxpayers.

In 1967 Israeli forces unleashed a two-hour air and sea attack against the USS Liberty, causing 200 casualties. While Israel partisans claim that this was done in error, this claim is belied by extensive eyewitness evidence and by an independent commission reporting on Capitol Hill in 2003 chaired by former Chairman of the Joint Chiefs of Staff Admiral Thomas Moorer.

In 1973 Israel used the largest airlift of US materiel in history to defeat Arab forces attempting to regain their own land, triggering the Arab oil embargo that sent the US into a recession that cost thousands of Americans their jobs.

During its 1980s Lebanon invasion, Israeli troops engaged in a systematic pattern of harassment of US forces brought in as peacekeepers that created, according to Commandant of Marines Gen. R. H Barrow, "life-threatening situations, replete with verbal degradation of the officers, their uniform and country."

Through the years, Israel has regularly spied on the US. According to the Government Accounting Office, Israel "conducts the most aggressive espionage operations against the United States of any ally." Secretary of Defense Caspar Weinberger said of Israeli spy Jonathan Pollard: "It is difficult for me to conceive of greater harm done to national security," And the Pollard case was just the tip of a very large iceberg; the most recent operation coming to light involves two senior officials of the American Israel Public Affairs Committee (AIPAC), Israel's powerful American lobbying organization.

Bad as the above may appear, it pales next to the indirect damage to Americans caused by our aid to Israel. American funding of Israel's egregious violations of Palestinian human rights is consistently listed as the number one cause of hostility to Americans.

While American media regularly cover up Israeli actions, those of us who have visited the region first-hand witness a level of US-funded Israeli cruelty that makes us weep for our victims and fear for our country. While most Americans are uninformed on how Israel uses our money, people throughout the world are deeply aware that it is Americans who are funding Israeli crimes.

The 9/11 Commission notes that Khalid Sheikh Mohammed's "animus towards the United States stemmedfrom his violent disagreement with U.S. foreign policy favoring Israel." The Economist reports that " the notion of payback for injustices suffered by the Palestinians is perhaps the most powerfully recurrent theme in bin Laden's speeches."

The Bottom Line

In sum, US aid to Israel has destabilized the Middle East; propped up a national system based on ethnic and religious discrimination; enabled unchecked aggression that has, on occasion, been turned against Americans themselves; funded arms industries that compete with American companies; supported a pattern of brutal dispossession that has created hatred of the US; and resulted in continuing conflict that last year took the lives of 384 Palestinians and 13 Israelis, and that in the past seven and a half years has cost the lives of more than 982 Palestinian children and 119 Israeli children.

By providing massive funding to Israel, no matter what it does, American aid is empowering Israeli supremacists who believe in a never-ending campaign of ethnic cleansing; while disempowering Israelis who recognize that policies of morality, justice, and rationality are the only road to peace.

It is time to end our aid.

Was Killing Iraqi Children Worth It?

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By Jacob G. Hornberger

A snapshot of the opening scene in the U.S. invasion of Iraq provides an excellent insight into the immorality and horror of the entire operation, from start to whenever it finally finishes.

According to an article in yesterday’s New York Times, at the outset of the invasion the U.S. military dropped bombs on a palatial compound in which Saddam Hussein was hiding. The article states:

“But instead of killing the Iraqi dictator, they had killed Mr. Kharbit’s older brother, Malik al-Kharbit — the very man who had led the family’s negotiations with the C.I.A. to topple Mr. Hussein. The bombings also killed 21 other people, including children, and the fury it aroused has been widely believed to have helped kick-start the insurgency in western Iraq.”

Now, that episode has at least two important lessons.

First, prior to the invasion the popular mantra among U.S. officials and many private Americans was the need to “get Saddam.” But as we often pointed out here at The Future of Freedom Foundation, it was never going to be just a question of “getting Saddam.” Instead, it was going to be a question of how many Iraqi people, including children, U.S. forces would have to kill before they “got Saddam.”

The article doesn’t state whether the U.S. military had actual knowledge that there were innocent people, including children, in the compound that it bombed. But it is a virtual certainty that they did have such knowledge. After all, if their intelligence was sufficiently good to know that Saddam was hiding in the compound, it had to be sufficiently good to know that there were other people living in the compound, including children.

Thus, when the U.S. military dropped those bombs, it had to be with the full knowledge that they would be killing innocent people in the process, including the children. And even if they didn’t “know” that there were innocent people in the compound at the time they dropped the bombs, they knew that there were dropping the bombs in reckless disregard of whether there were innocent people there or not.

The fact is that U.S. officials didn’t care whether there were innocents, including children, in that compound. Those children and their parents were obviously considered a small price to pay if Saddam Hussein had been killed at the outset of the war.

Of course, this attitude would match the attitude taken by U.S. officials throughout the period of the brutal sanctions that were enforced from 1991 to 2003. As tens of thousands of Iraqi children were dying year after year from the sanctions, the U.S. attitude was that those deaths were a small price to pay for ridding Iraq of Saddam Hussein. That’s why UN Ambassador Madeleine Albright, upon being asked whether the deaths of half-a-million Iraqi from the sanctions were worth it, she replied that yes — they were “worth it.” She was expressing the sentiment of the U.S. government, a sentiment that manifested itself again in the bombing of the compound in which those Iraqi children and their families were killed.

Second, the killing of those children and their families is just one example of how U.S. foreign policy has engendered anger and hatred for the United States, which produces the threat of terrorist retaliation, which brings about the “war on terrorism,” which results in more interventions, more massive military spending, and ever-increasing loss of liberty at home.

Let me repeat what the Times article said: “The bombings also killed 21 other people, including children, and the fury it aroused has been widely believed to have helped kick-start the insurgency in western Iraq.”

Now, ask yourself: Why has the U.S. government been occupying Iraq for the past 5 years? Didn’t they already “get” Saddam? Hasn’t he already been executed?

The answer is that U.S. officials, having “gotten” Saddam must now “get” the “bad guys” in Iraq. And who are the “bad guys?” They’re the Iraqis who are angry over the killing of Iraqis, including women and children, who had to be killed in the process of “getting Saddam.”

As they continue to bomb all these “bad guys,” they continue to kill more innocents, including more Iraqi children and their families, which then incites more fury, which then causes more “bad guys” to join the insurgency. Those additional “bad guys” are then used as the excuse to continue the occupation of Iraq, an occupation that for obvious reasons will go on indefinitely.

To state what I consider self-evident moral truths, it was morally wrong and a grave violation of God’s laws to:

(1) attack a country whose government and citizenry had never attacked the United States;

(2) kill Iraqis, including children and their families, in order to achieve regime change in Iraq; and

(3) kill Iraqis, including children and their families, in order to spread “democracy” to Iraq.

One can only wonder whether the American people, in crises of conscience, will ever confront such issues.

The Terrorists Are In Fact Peacemakers

Iran is sufficiently powerful to broker a ceasefire deal

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By Pepe Escobar


VOICE OF ZAA NKWETA, PRESENTER: After a week of heavy clashes, fighting in Basra has calmed down, Muqtada al-Sadr has pulled his Mahdi Army fighters off the streets, and Nouri al-Maliki declared the military operation to clear Basra of Shiite militia violence a success. But who won the battle of Basra? To answer this question, we go to Real News analyst Pepe Escobar.

PEPE ESCOBAR, THE REAL NEWS ANALYST: George W. Bush said that the battle of Basra was a defining moment in Iraq. Well, defining it was, but maybe not the way he intended. There was a ceasefire. Do you know the man who brokered a ceasefire? His name is Brigadier General Qassem Suleimani. He is the head of the Quds Force of the Iranian Republican Guard Corps. As everybody knows, the Iranian Government Guard Corps was declared as a terrorist organization by the US last year. So this man in Qom, religious capital of Iran, brokered a ceasefire between Muqtada al-Sadr’s envoys who came from Iraq and Hadi al-Amri, which is the number two of the Supreme Islamic Council of Iraq. He is the head of the Badr Organization. He’s part of the Baghdad government. So Muqtada’s people come from Baghdad. Al-Hakim’s people, Badr Organization, Supreme Islamic Council come from Baghdad. They go to Iran, in Qom. And the head of the Quds Force brokers a ceasefire, and the battle of Basra ends. So who are the winners and who are the losers? Okay. The winners are Iran and Muqtada al-Sadr; the losers are al-Maliki government in Baghdad and George W. "defining moment" Bush. This doesn’t mean that Muqtada al-Sadr is in the pockets of Iran. What it means is Iran is sufficiently powerful to get the two most important religious parties in Iraq, the Sadrists and al-Hakim’s Supreme Islamic Council, to Iran to broker a ceasefire organized by Iran. This means that the terrorists aren’t exactly terrorists—the terrorists are in fact peacemakers.

Based in Sao Paulo, Brazil, Pepe Escobar writes The Roving Eye for Asia Times Online. He has reported from Iraq, Iran, Central Asia, US and China. He is the author of the recently published Red Zone Blues. Pepe is a regular analyst for The Real News Network.

McClatchy Washington Bureau | 03/31/2008 | Iranian who brokered Iraqi peace is on U.S. terrorist watch list

Babylon & Beyond : Los Angeles Times : IRAQ: Sadr’s statement calling for end to violence

McClatchy Washington Bureau | Iranian general played key role in Iraq cease-fire

Why doesn't the 9/11 Commission know about Mukasey's 9/11 story?

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By Glenn Greenwald

Last week, during a question-and-answer session following a speech he delivered in San Francisco, Attorney General Michael Mukasey revealed a startling and extremely newsworthy fact. As I wrote last Saturday, Mukasey claimed that, prior to 9/11, the Bush administration was aware of a telephone call being made by an Al Qaeda Terrorist from what he called a "safe house in Afghanistan" into the U.S., but failed to eavesdrop on that call. Some help is needed from readers here to generate the attention for this story that it requires.

In that speech, Mukasey blamed FISA’s warrant requirement for the failure to eavesdrop on that call -- an assertion which is, for multiple reasons that I detailed in that post, completely false. He then tearfully claimed that FISA therefore caused the deaths of "three thousand people who went to work that day." For obvious reasons, the Attorney General’s FISA falsehoods themselves are extremely newsworthy, but it is the story he told about the pre-9/11-planning call from Afghanistan itself that is truly new, and truly extraordinary.

Critically, the 9/11 Commission Report -- intended to be a comprehensive account of all relevant pre-9/11 activities -- makes no mention whatsoever of the episode Mukasey described. What has been long publicly reported in great detail are multiple calls that were made between a global communications hub in Yemen and the U.S. -- calls which the NSA did intercept without warrants (because, contrary to Mukasey’s lie, FISA does not and never did require a warrant for eavesdropping on foreign targets) but which, for some unknown reason, the NSA failed to share with the FBI and other agencies. But the critical pre-9/11 episode Mukasey described last week is nowhere to be found in the 9/11 Report or anywhere else. It just does not exist.

Yesterday, I contacted Lee Hamilton, the 9/11 Commission Vice Chairman, to ask him whether the Commission was ever told about Mukasey’s alleged Afghan Terrorist 9/11-planning telephone calls and/or the Bush administration’s failure/inability to eavesdrop on such calls. Hamilton refused to comment, first claiming that he was in meetings all day yesterday and had no time to talk to me. When asked if he would comment today or whenever he had time, he said he was not going to comment on this ever, since he had not read Mukasey’s speech. Calls to 9/11 Executive Director Philip Zelikow seeking comment were not returned and 9/11 Commission Chairman Tom Kean could not yet be reached.

It’s unacceptable for Hamilton to refuse to comment on Mukasey’s claims. The whole purpose of the 9/11 Commission was to ensure that there was full-scale investigation and disclosure of all facts relevant to the 9/11 attacks, including the Government’s actions and inactions in preventing that attack from occurring.

If the Attorney General of the United States, out of the blue, makes an extraordinary and new assertion in a public speech about an easy opportunity the Bush administration had to detect those attacks -- an opportunity he claims was lost because of eavesdropping laws -- Hamilton ought to say whether the Commission was ever told about this incident and/or whether Mukasey is telling the truth. Preventing high government officials from lying about the 9/11 attacks or exposing concealment of key 9/11 facts is his obligation as Vice Chairman of the Commission. Some type of comment from 9/11 Commission officials on Mukasey’s claims is vital for generating further attention to this story and for compelling Mukasey to account for what he said.

Hamilton is currently the President and Director of the Woodrow Wilson International Center for Scholars, and director of The Center on Congress at Indiana University. Please email him at the address below, politely set forth the extraordinary claims the Attorney General just made about the 9/11 attacks (with citations to media sources about the speech -- including here, here, and here), and urge him to fulfill his obligation as 9/11 Commission Vice Chair by confirming whether Mukasey’s revelations are true and/or were disclosed to the Commission during its investigation:

This isn’t just a matter of academic and historical interest about the 9/11 attacks, although it is that. One of two things almost certainly happened here, each of which is of great importance. Either Mukasey is lying about the 9/11 attacks in order to manipulate Americans into believing that FISA’s warrant requirements are what prevented discovery of the 9/11 attacks and caused 3,000 American deaths -- a completely disgusting act by the Attorney General which obviously cannot be ignored. Or, Mukasey has just revealed the most damning fact yet about the Bush’s administration’s ability and failure to have prevented the attacks -- facts that, until now, were apparently concealed from the 9/11 Commission and the public.

Since I wrote about this on Saturday, there has been some slowly evolving media attention paid to it. On Monday, I discussed the story on the radio with Rachel Maddow who, as always, grasped completely its importance. The following night, she was on Countdown with Keith Olbermman, which had a lengthy and detailed segment, highlighting all of the right questions (video below). Raw Story compiled a very thorough article with the key facts, and the top Daily Kos post this morning does the same.

The great significance of this story -- that Mukasey either completely fabricated a key 9/11 event or just revealed a heretofore unknown 9/11 bombshell -- is self-evident and made clear by these growing accounts. Having Hamilton, Kean and/or Zelikow comment on the veracity of Mukasey’s claims about the 9/11 attacks -- as they ought to do -- is vital for advancing the story.

UPDATE: Philip Zelikow, the 9/11 Commission Executive Director (and former Counselor to Condolleeza Rice), obviously has no idea what Mukasey is talking about, as he replies by email (ellipses in original):
Not sure of course what the AG had in mind, although the most important signals intelligence leads related to our report -- that related to the Hazmi-Mihdhar issues of January 2000 or to al Qaeda activities or transits connected to Iran -- was not of this character. If, as he says, the USG didn’t know where the call went in the US, neither did we. So unless we had some reason to link this information to the 9/11 story ....

In general, as with several covert action issues for instance, the Commission sought (and succeeded) in publishing details about sensitive intelligence matters where the details were material to the investigative mandate in our law.

That’s polite Beltway talk for saying that nothing like what Mukasey described actually happened. Does anyone on TV other than Keith Olbermann care that the Attorney General of the United States just invented a critical episode about 9/11 that never actually happened -- tearing up as he did it -- in order to scare Americans into supporting the administration’s desired elimination of spying restrictions and blame FISA supporters for the 9/11 attacks? We still ought to hear from Hamilton and/or Kean.

UPDATE II: I’ll be on Rachel Maddow’s show at 7:30 p.m. EST today to discuss these developments. Local listings and live audio feed are here.

At Daily Kos, McJoan -- who wrote about this matter today here -- has written about it again, and included contact information for key members of Congress to demand that Mukasey be compelled to account for his 9/11 claims, preferably under oath.

The reason this story has the potential to be significant is because it’s easy to understand -- Mukasey’s story is either true or false -- and, more importantly, nothing like it happened. He can’t claim that he just misspoke or was confused because not only was there no such call from Afghanistan (at least according to everything that is known, including by the 9/11 Commission’s version), but FISA could never possibly have prevented interception of any calls remotely like the one Mukasey described.

He just made this up out of whole cloth in order to mislead Americans into supporting the administration’s efforts to eliminate spying safeguards and basic constitutional liberties and to stifle the pending surveillance lawsuits against telecoms. That isn’t hard for anyone -- even including those who play the role of journalists on TV -- to understand and convey.

Finally, numerous people have sent me their emails to Lee Hamilton, who still hasn’t commented or responded. If he doesn’t soon, I think mass (though civil) calling of his office will be in order. I don’t think he has the option of simply remaining quiet when the Attorney General makes a statement of this sort about the 9/11 attacks.

UPDATE III: With the help of readers, I was able to find and get in contact with Tom Kean’s office, who asked that an email be sent to him requesting comment. The email I sent is here, along with the email I sent to the DOJ (at their request) asking for comment from Mukasey.

Dan Gilmor of the Center for Citizen Media -- affiliated with the University of California, Berkeley’s Graduate School of Journalism and the Berkman Center for Internet & Society at Harvard University Law School -- has posted a superb piece on this matter, focusing on what it reflects about establishment press behavior. The whole thing is worth reading (Correction: Center for Citizen Media is now affiliated with Arizona State University and Harvard’s Berkman Center, and no longer with Berkeley).

UPDATE IV: House Judiciary Committee Chairman John Conyers, along with two Subcommittee Chairs, just sent a letter to Michael Mukasey demanding answers to all the right questions about his 9/11 claims as well as the bizarre (though unsurprising) reference in the Yoo Memorandum to the suspension of the Fourth Amendment inside the U.S. That letter will need to be followed up with action, but it’s a good start.

UPDATE V: The DOJ replies to my email referenced above, here.

Economy Loses 83,000 Jobs, Unemployment Jumps to 5.1 Percent

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By Dean Baker

The private sector is shedding jobs at the rate of almost 100,000 per month.

The establishment survey showed the economy losing 80,000 jobs in March, the third consecutive month of job loss. The private sector lost 98,000 jobs, the fourth consecutive decline in private sector employment. Overall, the private sector has lost 296,000 jobs over the last three months, a decline of 97,000 per month. Not surprisingly, the weakness in the labor market is also affecting wage growth. Wages grew at just a 2.5 percent annual rate over the last quarter, well below the rate of inflation and down sharply from the 3.6 percent growth rate over the last year. The household survey showed a 0.3 percentage point jump in the unemployment rate to 5.1 percent, while the employment population ratio (EPOP) fell to 62.6 percent, the lowest rate since March of 2005.

The job loss in the establishment survey was widely spread across sectors, although construction and manufacturing continue to be hardest hit, shedding 51,000 and 48,000 jobs, respectively. Both residential and non-residential construction are now reducing payrolls, as overbuilding in the non-residential sector is leading developers to cut back in this sector, also. Construction employment is down by 182,000 since November and by 356,000 (4.6 percent) over the last year.

Manufacturing employment is down by 151,000 since November and by 310,000 (2.2 percent) over the last year. The auto sector has been especially hard hit, losing 47,500 jobs since November and 95,000 (9.3 percent) over the last year, although this loss is somewhat inflated by a parts strike last month. The apparel and textile sectors also continue to be big losers, shedding 19,700 jobs since November and 45,700 jobs (8.2 percent) over the last year.

The retail sector lost 12,400 jobs in March and has lost 100,000 since November. Employment in the temporary help sector, which is often an indicator of future job growth, fell 21,600 in March and is down by 55,200 since January. The health care and restaurant industries are the only parts of the private sector with strong job growth, adding 22,800 jobs and 23,400, respectively.

The job growth in the restaurant sector may be an illusion. Over the last four months, the Labor Department has shown a gain of 58,100 jobs. However, the imputation for new firms not captured by the survey has been even larger at 85,000. The Labor Department is imputing jobs in this sector at close to the same rate as it did last year when the economy was growing much more rapidly, which means it is likely overstating job growth.

The data in the household survey reinforce the bleak picture. Nearly every demographic group showed a decline in employment rates and a rise in unemployment rates. Black teens were among the hardest hit groups with their EPOP falling to 19.7 percent, the lowest level since it hit the same number in June of 2003, which in turn was the lowest level since March of 1984.

The unemployment rate for workers without high school degrees jumped 0.9 percentage points to 8.2 percent, the highest rate since October of 2004. The unemployment rate for workers with high school degrees rose by 0.4 pp to 5.1 percent, while the EPOP dropped by 0.6 pp to 59.1 percent. This is the lowest EPOP for workers with high school degrees since the Labor Department changed the coding in the survey in 1992.

The measures of unemployment duration all fell in March, which is consistent with many more workers becoming unemployed for the first time. The number of workers involuntarily working part-time continued its upward path and is now 591,000 above its year ago level. The percentage of unemployment attributable to people voluntarily quitting their jobs, a measure of confidence in the labor market, fell to 10.1 percent, the lowest level since March of 2004.

This report removes any doubt the economy is in a recession, with the private sector now shedding jobs at a rate that may exceed 100,000 per month. With real wages declining, and the plunge in house prices destroying home equity at more than a $2.5 trillion annual rate, it is likely the rate of job loss will accelerate in the months ahead.

Buddy, Can You Spare a Billion?

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By Dana Milbank

As the chief executive of Bear Stearns, he's getting rather more public assistance than your typical welfare mom - specifically, $30 billion in federal loan guarantees to help J.P. Morgan Chase take over his firm. But then, Schwartz has had rather more than his share of suffering of late.

As his firm collapsed, he was forced to forgo his entire 2007 bonus, leaving his compensation for the past five years at a paltry $141 million, according to Business Week. Things have become so bad that, the Wall Street Journal discovered, Schwartz has had to rent out his 7,850-square-foot home on the ninth green of a suburban New York golf course - leaving the poor fellow with only his 17-room, seven-acre home in Greenwich, his condo in Colorado and the athletic center he built for Duke University.

Schwartz's tale of woe tugs at the heartstrings all the more because he and his colleagues at Bear Stearns were, he believes, blameless for the bankruptcy of two hedge funds and the subsequent collapse of the 85-year-old investment bank. "I am saddened," Schwartz told the Senate banking committee yesterday. He was saddened that Bear Stearns was undone by "unfounded rumors and attendant speculation," despite its impeccable balance sheet.

"Due to the stressed condition of the credit market as a whole and the unprecedented speed at which rumors and speculation travel and echo through the modern financial media environment, the rumors and speculation became a self-fulfilling prophecy," Schwartz told the senators. "There was, simply put, a run on the bank."

Sen. Richard Shelby (R-Ala.) asked the corporate-welfare recipient whether he shares any blame for his indigent circumstances. "Do you believe that your management team has any responsibility for the company's collapse?"

Schwartz could think of no missteps - not even his decision to remain at a conference at the Breakers in Palm Beach while his firm was imploding. "I just simply have not been able to come up with anything, even with the benefit of hindsight," said the blameless chief executive, escorted into the hearing room by superlawyer Robert Bennett.

Fortunately for Schwartz, he had a sympathetic audience in the banking committee, whose members have received more than $20 million in campaign contributions from the securities and investment industry, according to the Center for Responsive Politics. "I want the witnesses to know, and others, that as a bottom-line consideration, I happen to believe that this was the right decision," Chairman Chris Dodd (D-$5,796,000) said before hearing a single word of testimony.

"You made the right decision," Sen. Evan Bayh (D-$1,582,000) told the regulators who worked out the loan guarantee.

"The actions had to be done," agreed Sen. Chuck Schumer (D-$6,162,000).

Only a minority of senators, particularly those with smaller pieces of the campaign-cash pie, dissented. "That is socialism!" railed Sen. Jim Bunning (R-$452,000). "And it must not happen again."

To the extent the lawmakers objected to the Bear Stearns bailout, they worried that the Fed's actions would create a "moral hazard" - an economic term of art - that, as Shelby put it, "encourages firms to take excessive risk based on the expectations that they will reap all the profits while the federal government stands ready to cover any losses if they fail."

Shelby's notion was a curiosity for the senators, who don't often spend a lot of time worrying about moral hazards. No fewer than five other senators invoked the phrase. "I think the moral hazard was minimized," Federal Reserve Chairman Ben Bernanke, one of the witnesses, reassured the senators.

No moral hazard, however, would interfere with the lawmakers' compassion for the beleaguered Schwartz and his fellow witness, J.P. Morgan Chase's Jamie Dimon, who had given a combined $260,000 in political contributions in recent years - a small part of the $1.7 million their co-workers contributed in this election cycle alone. That's a sizable handout - but a good investment compared with the $30 billion federal hand-up.

"On behalf of all of us here on this dais, our sympathies go out to your employees," Dodd told Schwartz after his opening statement. "There's no adequate way we can express our sorrow to them for what happened. Obviously, shareholders, same sort of feelings, but obviously the employees particularly. It's a particularly hard blow."

Of course, some might consider $30 billion an adequate expression of sympathy, but Dodd was apologetic as he gently probed Schwartz. "You both will have forgotten more in the next 10 minutes than I'll ever probably understand about all of this," he told the witnesses, but didn't the irregular trading at Bear Stearns mean than "more than just rumors" were behind Bear Stearns's demise?

"You could never get facts out as fast as the rumors," Schwartz explained. "It looked like there were people that wanted to induce panic."

Sen. Bob Menendez (D-N.J.) reminded Schwartz that two of the firm's funds went bankrupt in 2007. "It caused concern, not only here but on Wall Street," the senator said. "Did that dramatically alter your behavior?"

Evidently not. "I'm not sure I understand the question," Schwartz answered.

(The Late) M.L. King Still Silenced

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By Jeff Cohen

Soon after Martin Luther King Jr.’s birthday became a federal holiday in 1986, I began prodding mainstream media to cover the dramatic story of King’s last year as he campaigned militantly against U.S. foreign and economic policy.

Most of his last speeches were recorded. But year after year, corporate networks have refused to air the tapes.

Last night, NBC Nightly News anchor Brian Williams enthused over new color footage of King that adorned its coverage of the 40th anniversary of the assassination. The report focused on the last phase of King’s life. But the same old blinders were in place.

NBC showed young working-class whites in Chicago taunting King. But there was no mention of how elite media had taunted King in his last year. In 1967 and ‘68, mainstream media saw Rev. King a bit like they now see Rev. Jeremiah Wright.

Back then they denounced King’s critical comments; today they simply silence them.

While noting in passing that King spoke out against the Vietnam War, mainstream reports today rarely acknowledge that he went way beyond Vietnam to decry U.S. militarism in general.

“I could never again raise my voice against the violence of the oppressed in the ghettos,” said King in 1967 speeches on foreign policy, “without having first spoken clearly to the greatest purveyor of violence in the world today – my own government."

In response to these speeches, Newsweek said King was “over his head” and wanted a “race-conscious minority” to dictate U.S. foreign policy.

Life magazine described the Nobel Peace Prize winner as a communist pawn who advocated “abject surrender in Vietnam.”

The Washington Post couldn’t have been more patronizing: "King has diminished his usefulness to his cause, to his country, and to his people."

When King’s moral voice moved beyond racial discrimination to international issues, the New York Times attacked his efforts to link the civil rights and antiwar movements.

King’s sermons on Vietnam could get as angry as those of Barack Obama’s ex-pastor: “God didn’t call America to engage in a senseless, unjust war,” King declared. “We’ve committed more war crimes almost than any nation in the world.”

Economic Criticism

In 1967, King also was criticizing the economic underpinnings of U.S. foreign policy, railing against “capitalists of the West investing huge sums of money in Asia, Africa and South America, only to take the profits out with no concern for the social betterment of the countries."

Today, capitalists of the West reap huge profits from their domination of global media.

Thankfully, we now have the Internet and independent media outlets where King’s later speeches are available for the ages.

If King had survived to hear the war drums beating for the invasion and occupation of Iraq – amplified by TV networks and the New York Times front page and the Washington Post’s editorial page – there’s little doubt where he’d stand.

Or how loudly he’d be speaking out.

And there’s little doubt how big U.S. media would have reacted. On Fox News and talk radio, King would have been Dixie Chicked. . .or Rev. Wrighted. In corporate centrist outlets, he’d have been marginalized faster than you can say Noam Chomsky.

One suspects King would be marveling at the rise of Barack Obama and the multiracial movement behind him. But would he be happy with Obama and other Democratic leaders who heap boundless billions onto the biggest military budget in world history?

In 1967, King denounced a Democratic-controlled Congress for fattening the Pentagon budget while cutting anti-poverty programs, declaring: “A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death.”

It's Not the Dream; It's Our Nightmare

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By Dr. Wilmer J. Leon III

On April 4, America commemorates the assassination of the Rev. Dr. Martin Luther King Jr. We will hear those powerful words "I Have a Dream ..." What many of us don't realize is Dr. King was no dreamer. He was a visionary, not some abstract thinker or philosopher. He was a prophet and a true revolutionary.

The best way to pay tribute to Dr. King and his total sacrifice is to understand what he stood for. Start by reading two speeches. First, read "I Have a Dream." Second, read "Beyond Vietnam: A Time to Break Silence." Don't allow others to selectively define Dr. King for you. Read these two speeches for yourself.

The original title of the "I Have a Dream" speech was "Normalcy - Never Again." Dr. King the realist states, "... we must face the tragic fact that the Negro is still languishing in the corners of American society and finds himself an exile in his own land. So we have come here today to dramatize an appalling condition." That was no dream; that was our reality and a clear indictment of the social conditions in America at that time.

Dr. King the strict constructionist referred to the Constitution and the Declaration of Independence as a promissory note to which every American was to fall heir. He stated, "It is obvious today that America has defaulted on this promissory note insofar as her citizens of color are concerned ... Instead of honoring this sacred obligation, America has given the Negro people a bad check - a check which has come back marked insufficient funds." Again, a clear indictment of America!

Dr. King the prophet said, "There will be neither rest nor tranquility in America until the Negro is granted his citizenship rights. The whirlwinds of revolt will continue to shake the foundation of our nation until the bright day of justice emerges." These are the words of a true revolutionary not a dreamer!

He continued, "We cannot be satisfied as long as a Negro in Mississippi cannot vote and a Negro in New York believes he has nothing for which to vote." That was the reality then and based upon the events in Florida in the 2000 presidential election, Ohio in 2004, and the disenfranchisement of voters in the Democratic primaries in Florida and Michigan, this continues to be our reality today.

The "dream" reference actually comes toward the end of the speech. As the story goes (and this may be lore), Dr. King was close to ending his nine-minute delivery when the great gospel singer, Ms. Mahalia Jackson, who was seated behind him, said, "Tell them about your dream, Martin! Tell them about the dream!" At that point, Dr. King went away from his prepared text. He spoke of the dream in the context of a horrific reality for "Negro's" and the poor. What makes the "dream" significant is its juxtaposition against America's reality, failures and oppression of its own citizens.

Dr. King was correct then and proves to be prophetic today. I'll take some license here ... We must face the tragic fact that, based on the unemployment rate for African-Americans, the racial make up of the majority of those incarcerated in America and the horrific failure of the government's response in Hurricane Katrina "... the Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity ... the Negro is still languished in the corners of American society and finds himself an exile in his own land."

It's not the "dream"; it's that vision in the context of a horrific reality!

On April 4, 1967, Dr. King delivered "Beyond Vietnam: A time to Break Silence." If you replace Vietnam with Iraq, Dr. King the prophet and visionary is as relevant today as he was in 1967.

A few lines of the revised speech would read as follows: There is a very obvious and almost facile connection between the "War on Terror," the illegal invasion of Iraq and the struggle I, and others, have been waging in America. It once seemed as if there were a real promise of hope for the poor through the Peace Dividend from the Clinton administration. Then came the buildup in Iraq, this so-called "War on Terror," and I watched the dividend squandered and eviscerated as if it were some idle political plaything of a society gone mad on war, and I knew America would never invest the necessary funds and energies in rehabilitation of its poor so long as adventures like Iraq continued to draw men and skills and money like some demonic destructive suction tube.

Five years ago, as America was preparing to go to war in Iraq, White House economic adviser Lawrence Lindsay estimated the war would cost between $100 billion and $200 billion. Deputy Defense Secretary Paul Wolfowitz claimed Iraq could "really finance its own reconstruction." Lindsey went on to say, "The successful prosecution of the war would be good for the economy." Lindsay was removed, and the White House "re-estimated" the cost at between $50 billion to $60 billion. The estimated budget authority is now over $500 billion.

Dr. King would continue: Now, it should be incandescently clear no one who has any concern for the integrity and life of America today can ignore the present war. If America's soul becomes totally poisoned, part of the autopsy must read Iraq. It can never be saved so long as it destroys the deepest hopes of men the world over.

So, as President Bush and Vice President Cheney continue to fool the nation and misrepresent the truth in a feeble attempt to "unite our country," around this "surge," the "new direction" and the "way forward" in Iraq, remember, those who fail to heed the lessons of history are doomed to repeat them. Dr. King and his lessons are as relevant today as in 1967.

Again, if America's soul becomes totally poisoned, part of the autopsy must read Iraq. It can never be saved so long as it destroys the deepest hopes of men the world over.

Don't take the "dream" out of context. Dr. King was talking about our nightmare!

US financial system faced collapse, bank regulators tell Senate hearing on Bear Stearns bailout

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By Barry Grey

At a hearing of the Senate Banking Committee on Thursday, top financial regulators said the unprecedented actions by the Federal Reserve Board last month to prevent the failure of investment bank Bear Stearns were taken to avert a collapse of the entire US financial system.

Federal Reserve Board Chairman Ben Bernanke, New York Federal Reserve Bank President Timothy Geithner, Securities and Exchange Commission (SEC) Chairman Christopher Cox and Under Secretary for Domestic Finance Robert K. Steel defended the government bailout of Bear Stearns and the decision to lend Federal Reserve funds to all of the major US investment banks as emergency measures necessitated by a mounting panic on Wall Street that reached a crescendo in the days preceding the government-engineered takeover of Bear Stearns by JPMorgan Chase.

While the regulators had a vested interest in justifying the allocation of tens of billions of taxpayer dollars to prop up giant Wall Street firms by portraying the immediate crisis they confronted in dire terms, there is no doubt that the disaster scenario over the weekend of March 14-17 which they described was very real. The very fact of their admission of a financial emergency of historic proportions is an extraordinary testament to the profound and systemic nature of an economic crisis that only a few weeks ago President George W. Bush called a “rough patch.”

What none of the officials, and none of the senators on the Banking Committee, broached was what the development of such a potentially catastrophic crisis says about the nature and condition of American capitalism and the responsibility of the CEOs on Wall Street who justify their multi-million-dollar salaries by their supposedly irreplaceable expertise.

Far from the crisis having been resolved by the rescue of Bear Stearns and the associated steps taken by the Fed, when asked by the ranking Republican on the committee, Richard Shelby of Alabama, what were the chances that another emergency bailout would occur, Under Secretary Steel said that he “couldn’t say there will not be another problem.”

The deprecatory demeanor of the senators, led by the senior Democrats on the committee, left no doubt as to who wields the real power in the United States. Sitting across from officials who have overseen and facilitated financial abuses, speculation and gambling with borrowed money on an unprecedented scale, resulting in a social catastrophe for millions of American families, most of the senators went out of their way to commend the assembled regulators and demonstrate their deference to the financial elite.

Democratic Senator Christopher Dodd of Connecticut, the chairman of the committee, reiterated several times in his opening remarks that the bailout of Bear Stearns and the financial markets was “the right decision.” He effusively thanked Bernanke and the other officials for their “patience” in putting up with questions from Congress.

His only criticism was that the Fed should have opened the spigot of cash from its discount window to Wall Street investment banks sooner.

Charles Schumer, Democrat of New York, said, “Everyone agrees that the Fed had no choice and it had to be done.” Tom Carper, Democrat of Delaware, said that “at the end of the day, what the Fed did passes muster.” Evan Bayh of Indiana declared, “You made the right decision.” Jack Reed, Democrat of Rhode Island, said, “Thank you for steering us through a crisis that could have had catastrophic consequences.”

The only discordant note was struck by Jim Bunning of Kentucky, a right-wing Republican, who denounced the bailout of Bear Stearns as an affront to the free market and a form of “socialism.”

Fed Chairman Bernanke opened the testimony with a grim picture of the current financial situation. “Although the situation has recently improved somewhat,” he said, “financial markets remain under considerable stress. Pressures in short-term funding markets, which had abated somewhat beginning late last year, have increased once again.

“Many lenders have been reluctant to provide credit to counterparties, especially leveraged investors, and increased the amount of collateral they required to back short-term security financing agreements. To meet those demands, investors have reduced their leverage and liquidated holdings of securities, putting further downward pressure on security prices.

“Credit availability has also been restricted because some large financial institutions, including some commercial and investment banks and the government-sponsored enterprises, have reported substantial losses and write-downs, reducing their capital available to support increased lending. Some key securitization markets, including those for nonconforming mortgages, continued to function poorly, if at all.”

He outlined the massive injection of funds into the financial markets and steep cuts in interest rates carried out by the Fed in an attempt to counter the housing and credit market crises. This, he said, was the context in which the Fed was advised by Bear Stearns on March 13 that it would have to file for bankruptcy the next day unless the government intervened.

The prospect of a collapse of Bear Stearns, he continued, raised issues that “extended well beyond the fate of one company.” He then outlined its likely impact: “The sudden failure of Bear Stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence. The company’s failure could also have cast doubt on the financial positions of some of Bear Stearns’ thousands of counterparties and perhaps of companies with similar businesses.

“Given the exceptional pressures on the global economy and financial system, the damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain. Moreover, the adverse impact of a default would not have been confined to the financial system but would have been felt broadly in the real economy through its effects on asset values and credit availability.”

In the question-and-answer period, Bernanke objected to characterizations of the Fed’s action as a bailout of Bear Stearns, saying that the firm’s shareholders had suffered massive losses. The issue, he insisted, was the broader threat to the financial system. Saying he was concerned about “other institutions and markets,” he added, “If you want to say we bailed out markets in general, I guess that’s true.”

In response to a question as to how the failure of a single investment bank could bring down the entire financial system, Bernanke said the crisis was the outcome of a “credit boom” which saw a massive growth of debt, “excess risk-taking” and a “deterioration in underwriting standards.”

None of the senators suggested that the heads of major Wall Street firms should be held accountable for, in effect, using the banking system as a giant casino.

The same theme of impending catastrophe was sounded by the other witnesses. SEC Chairman Cox said, “In the cauldron of these events, the actions that the Federal Reserve took—in particular, extending access to the discount window not only the Bear Stearns, but also to the major investment banks—were addressed to preventing future occurrences of the run-on-the-bank phenomenon that Bear endured.”

He noted that the crisis of confidence in financial markets had reached such an extreme point that by March 13, Bear Stearns was unable to borrow against “high-quality collateral,” calling this “an unprecedented occurrence.”

New York Federal Reserve Bank President Geithner outlined in some detail the round-the-clock meetings and negotiations involving the Fed, the Treasury Department, the SEC, Bear Stearns and JPMorgan Chase that occurred during the 96 hours between Bear Stearns’ warning that it was about to declare bankruptcy and the announcement late on March 16 of the investment bank’s takeover by JPMorgan Chase.

He made clear that federal regulators believed they had to reach an agreement before Asian markets opened Sunday night, US time, in order to avoid a full-scale panic. No less significant was his revelation that regulators feared, even after the Bear Stearns takeover had been announced, that other investment banks might fail when markets opened Monday morning. That, according to Geithner, prompted the Fed to announce that it was opening up its discount window to all major investment banks—something that had not occurred since the Great Depression.

He then gave a decidedly somber prognosis for the future. “By reducing the probability of a systemic financial crisis,” he said, “the actions taken by the Fed on and after March 14 have helped avert substantial damage to the economy, and they have brought a measure of tentative calm to global financial markets... Nevertheless, liquidity conditions in markets are still substantially impaired and the process of de-leveraging remains underway. And this will amplify the headwinds facing the US and global economy.”