Tuesday, June 10, 2008

Prices Leap for Corn and Crude Oil

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By Keith Good

Chris Flood, writing on Friday at the Financial Times Online, reported that, “Torrential rain across parts of the Midwest pushed US corn prices to record levels on Friday, prompting concerns about the outlook for this year’s harvest.

“In Chicago, CBOT July corn jumped 20¾ cents to a record $6.63¼ a bushel, taking gains for this year so far to 45.6 per cent.”

The FT article added that, “One trader estimated that about 4m acres of corn and up to 19m acres of soyabeans for this year’s harvest have yet to be planted.

“CBOT July soyabeans rose 40 cents to $14.88 a bushel, up 24.1 per cent this year.

“Further rain is expected ahead of a key update from the US Department of Agriculture on Tuesday.”

Similarly, Associated Press writer Stevenson Jacobs reported on Friday that, “Corn futures shot up to a record for a second day Friday, driven higher by heavy rain in Midwestern states, a slumping dollar and skyrocketing crude oil prices.

“Other commodities traded broadly higher, with crude oil soaring more than $11 and gold, silver, copper and other agriculture futures also rising sharply.

“Heavy rains have flooded corn crops in Indiana, Ohio, Nebraska and other states, giving farmers their wettest spring since 1993 and severely delaying planting. Forecasts show the bad weather moving toward the western corn belt states of Minnesota and Wisconsin over the next several days.”

The AP article went on to explain that, “U.S. farmers were expected to plant 86 million acres of corn this year, but wet weather in Midwestern states has left 4 million acres unplanted. If the remaining fields aren’t planted by June 10, farmers will either leave them empty and take insurance payments or switch the acres over to soybeans, which have a later growing cycle.

“That would likely lift corn prices further, forcing consumers to pay higher grocery bills for meat and pork, as livestock producers would be forced to pass on higher animal feed costs and thin their herd size.

“Other agriculture futures also rose. Wheat for July delivery rose 25.5 cents to settle at $8.11 a bushel on the CBOT, while July soybeans added 5.5 cents to settle at $14.575 a bushel.

“Meanwhile, rough rice futures for July delivery added 60 cents to settle at $19.96 per 100 pounds.

“In energy futures, oil prices soared more than $11 to a new record above $139 after a Morgan Stanley analyst predicted prices could hit $150 by the Fourth of July.”

A news release issued last week by University of Missouri Extension noted that, “Many Missouri farmers are several weeks behind schedule on planting corn due to persistent wet weather. With the approach of the early June cutoff date for corn planting, farmers may have to switch to other crops or plant out of season despite risks of lower yields, said University of Missouri agriculture experts.

“Either way, corn yields will probably be lower than last year and may fail to meet the nation’s 13-billion-bushel demand. That could lead to higher food prices, reduced livestock production and ripple effects across all farm sectors, said Scott Brown, agricultural economist with the MU Food and Agricultural Policy Research Institute.

“‘A number of factors make us worried about where yields are going to be at harvest time this year,’ Brown said. ‘We have a very strong demand for corn in this country, and now we’re starting to talk about less production occurring.’”

DTN writer Chris Clayton reported on Friday that, “As thunderstorms continue dumping rain on critical Corn Belt states, there is heightened concern by policymakers, market observers and farmers about the ability to meet expected increased demand for corn in the coming year.

“Fears about the potential 2008 corn production come on the heels of high commodity prices globally that already have led to a United Nations food-aid conference and growing attacks on the use of corn and soybeans in biofuels. Even at the UN conference there was talk that U.S. spring planting was behind schedule. Agriculture Secretary Ed Schafer said Thursday after returning from the Rome conference that USDA is monitoring the weather closely right now.

“‘We’ve got a lot of concern of the wet conditions in corn country and how that’s affecting the planting of the crop and certainly the maturity of the crop,’ Schafer said.”

Mr. Clayton noted that, “Some agronomists project that even if the rains stopped, most producers would be looking at 80 percent to 90 percent of their normal expected yields in key areas of the Corn Belt. Roger Elmore, an agronomist at Iowa State University, said without adequate heat units, the yield pull can be closer to 65 percent to 70 percent normal levels.

“‘We’re getting to the point where it is really late to think about planting corn,’ Elmore said. ‘Every day I look at the forecast, it’s going to be hard to be optimistic.’”

And with respect to the Conservation Reserve Program, the DTN article indicated that, “[Sec. of Agriculture Ed Schafer] reiterated that USDA had opened up Conservation Reserve Program acres for haying and grazing later this summer. Sign-ups for that began on Monday.

“‘Hopefully that displaces corn as a feed, at least to some extent,’ Shafer said. ‘So we’re looking at it. We’re trying to do everything that we can to deal with it, and as you said we’re monitoring it closely because it is of concern.’”

However, the Associated Press reported yesterday that, “Advocates for pheasant and quail hunters are concerned that new rule changes that allow Conservation Reserve Program lands to be used for haying and grazing this summer and fall could infringe on major nesting habitat.”

This AP article stated that, “Meanwhile, [Dave Nomsen, Pheasants Forever’s vice president of government affairs] sees a bigger issue: the message the rule changes send about the value of CRP lands.

“As 10- and 15-year CRP contracts are set to expire this fall and in coming years, many agriculture officials say — and conservationists fear — farmers will not re-up and instead begin growing crops to capitalize on recent high commodity prices. Some farmers may even pay a penalty to leave the program early to cash in on crops.

“‘Sportsmen and sportswomen of all types — whether you’re a fisher or a hunter — you need to be concerned about CRP land,’ said Bob St. Pierre, Pheasants Forever’s marketing and public relations director. ‘They’re cleaning our waters, they’re keeping our soils on the ground where they should be.’

“St. Pierre said there has been a ‘tremendous’ rise in CRP lands over the last 20 years, but it’s now on the decrease because of the foreign oil demand, feedstock prices and the push for ethanol.”

In more detailed news with respect to crude oil prices, Neil King Jr. reported in Saturday’s Wall Street Journal that, “Crude oil notched its largest price jump ever on Friday, leaping nearly $11 to more than $138 a barrel, on news of a weakening dollar and continued jitters over the reliability of world supplies.

“The surge, coming just as many analysts thought oil prices were set to fall, sent stocks plunging amid fears that the U.S. economy could be in for a combined bout of inflation and slow growth. The skyrocketing price of oil, now up more than 44% so far this year, is battering the airline and auto industries and causing consumers to cut back on driving and nonessential spending.”

And Sudeep Reddy reported in today’s Wall Street Journal that, “The average price of gasoline in the U.S. hit $4 a gallon for the first time Sunday, the latest milestone in a run-up in fuel prices that is sapping consumer confidence and threatening to nudge the nation into recession.

“The record nationwide average for regular-gasoline prices, announced by auto club AAA, follows Friday’s near-$11 surge in oil prices to a record $138.54 a barrel. Both are part of what, by some measures, is the worst energy-price shock Americans have faced for a generation, in terms of its toll on their pocketbooks.”

With this backdrop of crop and commodity news in mind, the Center for Agricultural and Rural Development (CARD) at Iowa State University recently released a paper entitled, “Short-Run Price and Welfare Impacts of Federal Ethanol Policies,” by Lihong Lu McPhail, Bruce A. Babcock.

A summary of the paper stated that, “High commodity prices have increased interest in the impacts of federal ethanol policies. We present a stochastic, short-run structural model of U.S. corn, ethanol, and gasoline markets to estimate the price and welfare impacts of alternative policies on producers and consumers of corn, ethanol, and gasoline. The three federal policies that we consider are the Renewable Fuels Standard, the blenders tax credit, and the tariff on imported ethanol. Our model examines the impact of these policies on prices during the 2008/09 marketing year. Our results show that in the short run, a change in U.S. ethanol policies would not have a large, immediate impact on corn prices. Eliminating any one of the policies would reduce average corn prices by less than 4%. Removal of all three programs would decrease average corn prices by 14.5%. The reason why the changes are relatively modest is that existing U.S. ethanol plants will only shut down if their variable cost of production is not covered. Changes in ethanol policies would have large distributional impacts. Corn growers, ethanol producers, and fuel consumers have a large incentive to maintain high ethanol consumption. Gasoline producers have a large incentive to reduce ethanol production and imports. Livestock producers have a large short-run incentive to reduce domestic ethanol production.”

In related news, Reuters writer Tom Doggett reported on Saturday that, “A new Senate bill to cut the U.S. tariff on ethanol imports has little chance of clearing Congress as there is not much time left on the legislative clock and it is too hot a political issue to take up in an election year, congressional aides say.

“Senators Dianne Feinstein, a California Democrat, and Judd Gregg, a New Hampshire Republican, introduced legislation this week to lower the tariff to bring it in line with U.S. ethanol blending subsidies, which a recently enacted farm bill lowered to 45 cents per gallon from 51 cents per gallon.

“The bill would cut import tariffs to 45 cents per gallon from the current level of 54 cents per gallon, and require Congress to lower tariffs again if blending subsidies are cut even further.”

Mr. Doggett indicated that, “The panel’s chairman, Democrat Max Baucus, has previously said he is against cutting the ethanol import tariff. In addition, Baucus would not normally put a priority on legislation sponsored by lawmakers who are not members of his finance committee, as is the case with Feinstein and Gregg.

“The top Republican on the finance committee, Chuck Grassley, opposes the bill, an aide to the senator said.

“Grassley said earlier this week that Brazil and other countries can export more than 452 million gallons of ethanol duty-free to the United States this year under a special trade agreement with Caribbean nations, but that threshold has yet to be met.

“‘Until Brazil and other countries take full advantage of their existing ability to ship ethanol duty-free to the U.S. market, we shouldn’t even discuss providing them with yet more duty-free access,’ Grassley said.”

In other news regarding biofuels, an AFP article from Friday stated that, “Brazilian Foreign Minister Celso Amorin met the European Union Troika here Friday for talks on biofuels and strategic ties between his country and the 27-member bloc.

“At the meeting, Amorin defended his country’s use of biofuels, insisting that they did not affect food production, but helped reduce petrol consumption.

“Ethanol production in Brazil ‘has grown to the point that it more important for us than gasoline,’ Amorin said, speaking in English at a joint news conference with Slovenian Foreign Minister Dimitrij Rupel.

“And he added that it ‘helps lower the demand for oil.’”

The AFP article noted that, “Slovenia, which currently holds the E.U.’s rotating presidency, said the meeting will focus on cooperation in areas such as the fight against poverty, climate change and energy security.

“E.U. Commissioner for External Relations Benita Ferrero Waldner is also attending the meeting at the Brdo pri Kranju castle, just outside Ljubljana.

“Addressing E.U. concerns about the effects of biofuel production on the Amazon, Amorin said ethanol was being produced outside the rainforests. It covered just one percent of agricultural land and just 0.4% of Brazil’s entire territory.”

Meanwhile, the New York Times editorial board stated in today’s paper that, “Over the past year, the prices of grains and vegetable oils have nearly doubled. Rice has jumped by about half. The causes include soaring energy costs, drought in big agricultural producers, like Australia, and rising demand by a burgeoning middle class in China and India. But misguided mandates and subsidies in the United States and Europe to produce energy from crops are also playing an important role.

“The International Monetary Fund estimated that biofuels — mainly American corn ethanol — accounted for almost half the growth in worldwide demand for major food crops last year. About a third of this country’s corn crop will go to ethanol this year. Yet at the summit meeting in Rome, the Bush administration insisted that ethanol is playing a very small role in rising food prices and resisted calls to limit the drive to convert food into fuel. The United States wasn’t alone.

“Brazil, which has an enormous sugar-based ethanol industry, also rejected demands to curb biofuel production. Argentina objected to calls to end export taxes that it and other countries have erected to slow food exports. The United States and Europe also rejected suggestions that their farm subsidies should be blamed for depressing agricultural investment in poor countries.”

And more broadly with respect to energy policy, James Kanter reported in Saturday’s New York Times that, “The International Energy Agency, a group that advises industrialized countries, said Friday in a report that investments of at least $45 trillion might be needed over the next half-century to prevent energy shortages and greenhouse gas emissions from slowing economic growth.

“Nobuo Tanaka, the agency’s executive director, called for ‘immediate policy action and technological transition on an unprecedented scale.’

“Mr. Tanaka said the world would ‘essentially require a new global energy revolution which would completely transform the way we produce and use energy.’”

Doha Trade Talks

Reuters writers Jonathan Lynn and William Schomberg reported on Thursday that, “The United States and the European Union said on Thursday the Doha round of world trade talks could collapse because of 11th-hour intransigence by some big developing countries.

“The warning comes ahead of a potentially decisive push to end the long-delayed World Trade Organization talks, and could deepen a gap between rich and poor nations.”

The article added that, “U.S. Trade Representative Susan Schwab said the WTO talks were entering their most critical days since they started.

“‘None of us alone can carry this forward and it only takes a few of us to make sure the talks stall,’ she told reporters. ‘We do not have the luxury of unlimited time — on the contrary.’

“Mandelson and Schwab did not name countries risking Doha’s collapse but both have said in the past that advanced developing countries like Brazil, India and China are not doing enough. France says it doesn’t want to be hurried into a premature deal.”

However, on Friday, Reuters writer Doug Palmer reported that, “World trade ministers could convene in late June or early July to try to reach a long-sought world trade deal if their negotiators make enough progress in the coming days, the top U.S. trade official said.

“‘I think there is a shared sense of urgency, some pickup in momentum,’ U.S. Trade Representative Susan Schwab said in a telephone interview on Friday after meetings with other trade ministers this week in Paris and last weekend in Peru.

“Schwab’s comment came one day after she and European Trade Commissioner Peter Mandelson warned the Doha round of world trade talks could collapse because some big developing countries were not offering significant new market openings.”

Reuters news also provided a “FactBox” Summary of the Doha talks: “Key tasks for WTO trade negotiators,” which was posted on Friday and can be viewed by clicking here.

Fixing the Vote

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By Michael Waldman

How to keep new voters from falling off the rolls

The primaries have been thrilling, marked by surging voter participation. States without Electoral College clout that have traditionally been ignored by candidates—from Indiana and Texas to North Carolina and even South Dakota—have hosted vibrant campaigns. But as the excitement and suspense of the primary season fades and the reality of a general election sets in, how can we make sure this moment of rare public engagement is not just an aberration?

Major change comes when a widely felt public need collides with dysfunctional public institutions. Today, government is broken. The answer must be more than a simple changing of the guard; we know there will be a new president, after all. But there must also be changes in the way our democracy functions. If we want to end the special-interest stasis that paralyzes Congress, for example, we should move to public financing of congressional campaigns. If we worry that Congress is endlessly partisan, we should reform redistricting rules so that lawmakers can't simply carve themselves one-party districts. If we liked the 50-state frenzy that made every vote matter, we should end the Electoral College (which, intriguingly, could be bypassed by states even without a constitutional amendment).

But no improvement would have a more hopeful impact than to craft a modern and inclusive voting system. Turnout in the Democratic primary, at least, has been double that of the last election cycle, and it will likely rise higher in November. But this rising tide may swamp the ramshackle system by which we cast and count votes. With luck, this year won't be a mess. But we can tap this energy to fix voting, for good. Starting next year, the country should move to a system of universal voter registration, in which every eligible citizen can vote. We should end voter registration as we know it.

The United States is one of the few industrialized democracies that erects barriers to registration, making individuals sign themselves up and bear the burden of keeping their registration up to date. The system leaves gaps and inaccuracies in voter rolls, causes voters to fall through the cracks when they move, and creates opportunities for partisan mischief. Former presidents Gerald Ford and Jimmy Carter chaired a commission that concluded, "The registration laws in force throughout the United States are among the world's most demanding … [and are] one reason why voter turnout in the United States is near the bottom of the developed world." Today, some 50 million eligible American citizens are not on the rolls.

Yes, voting is a responsibility. But the government should not put up obstacles to registration, either through bureaucratic mistakes or misguided laws. We don't privatize most other key roles in our functioning democracy. We don't tell people to organize themselves to show up for the census, or to collect taxes. We don't ask litigants to rustle up a jury pool. We see all these as government's natural, obvious obligation. We should also see government as having the prime role in creating an accurate list of who can vote. This primary season showed a yearning to participate. Government shouldn't stand in the way.

There are many creative ways to achieve universal voter registration. States could piece together a list from existing tallies, such as drivers' licenses and jury rolls. Or states could do what Massachusetts has done for two centuries, which is conduct an annual census to find out who lives there. A new, universal voting list could be updated yearly with mass mailings, tax returns, auto registrations, and forms from the post office that people could fill out when they change their addresses. The federal government could set a national standard, then give states funds to help them make sure the voters are on the rolls.

Whatever method we decide upon, Election Day registration should be a part of the plan in every state. Already, eight states allow citizens to register when they vote. The system boosts turnout by five to seven points, reduces confusion, and makes it possible for "people power" to overturn the political establishment.

A change like universal voter registration would help create a fully modern and participatory election system. Even more, such democracy reforms make other reforms possible. If politicians knew that tens of millions more voters would go to the polls, they might be more likely to act with alacrity on pocketbook issues such as health care. If campaign funding laws are changed so that K Street no longer provides the bulk of funding for members of Congress, complex measures like climate change legislation might come unstuck. If we want to solve our problems, we'd better fix our systems.

The next president should not regard the increase in voter turnout as a personal achievement but rather as a signal that it is time to rebuild the structures of American democracy. The 2008 election will definitely be historic. But it can also be the election that forever changes the way Americans participate in politics.

BBC uncovers lost Iraq billions

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By Jane Corbin

A BBC investigation estimates that around $23bn (£11.75bn) may have been lost, stolen or just not properly accounted for in Iraq.

For the first time, the extent to which some private contractors have profited from the conflict and rebuilding has been researched by the BBC's Panorama using US and Iraqi government sources.

A US gagging order is preventing discussion of the allegations.

The order applies to 70 court cases against some of the top US companies.

War profiteering

While George Bush remains in the White House, it is unlikely the gagging orders will be lifted.

To date, no major US contractor faces trial for fraud or mismanagement in Iraq.

The president's Democrat opponents are keeping up the pressure over war profiteering in Iraq.

Henry Waxman who chairs the House Committee on Oversight and Government Reform said: "The money that's gone into waste, fraud and abuse under these contracts is just so outrageous, its egregious.

"It may well turn out to be the largest war profiteering in history."

In the run-up to the invasion one of the most senior officials in charge of procurement in the Pentagon objected to a contract potentially worth seven billion that was given to Halliburton, a Texan company, which used to be run by Dick Cheney before he became vice-president.

Unusually only Halliburton got to bid - and won.

Missing billions

The search for the missing billions also led the programme to a house in Acton in West London where Hazem Shalaan lived until he was appointed to the new Iraqi government as minister of defence in 2004.

He and his associates siphoned an estimated $1.2 billion out of the ministry.

They bought old military equipment from Poland but claimed for top class weapons.

Meanwhile they diverted money into their own accounts.

Judge Radhi al-Radhi of Iraq's Commission for Public Integrity investigated.

He said: "I believe these people are criminals.

"They failed to rebuild the Ministry of Defence , and as a result the violence and the bloodshed went on and on - the murder of Iraqis and foreigners continues and they bear responsibility."

Mr Shalaan was sentenced to two jail terms but he fled the country.

He said he was innocent and that it was all a plot against him by pro-Iranian MPs in the government.

There is an Interpol arrest out for him but he is on the run - using a private jet to move around the globe.

He stills owns commercial properties in the Marble Arch area of London.

Iraq nears title as world's most corrupt

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During the five years the United States has occupied Iraq, the Bush administration has created a new state with a number of notable features: A venal, dysfunctional government. A terrorist haven and training ground. A nation so violent and dangerous that 10 percent of the population has fled.

Add to that a new hallmark: Nearly the most corrupt nation on Earth.

Only two states out of 180, Somalia and Burma, outrank Iraq in Transparency International's latest worldwide corruption index. They are tied for last place. But Iraq has plummeted through the rankings since 2004, when it was near the middle of the pack, and is now within a hair's width of crashing to the bottom.

Along the way, American officials say, Iraqi government officers, from Prime Minster Nouri al-Maliki on down, have embezzled not only uncounted billions of dollars from their own treasury - but also $18 billion in American aid.

That's about equal to the annual budget for the state of Colorado. Radhi al-Radhi, an Iraqi judge who provided that figure, was the state's chief anti-corruption official, until death threats forced him to flee last year. He called the theft among the largest in modern history.

In recent months, several American government reports have detailed the problem, and Congress has held hearings. The conclusion: Not only has the United States provided much of the money Iraqi officials have purloined, American officials have actually aided and abetted the theft.

The State Department, particularly, has seemed eager to obfuscate and cover up the thievery - afraid, it seems, of tarnishing the Iraqi government's reputation. Last summer, embassy officials in Baghdad researched a 70-page internal but unclassified report that detailed the plundering of the nation's wealth. The pillage was so widespread, the report said, that it threatened the Iraqi government's very survival.

A few months later, when Congress requested a copy of the report, the State Department retroactively classified it and demanded that any officials called to testify would do so in a closed, classified session. All this for corruption in a foreign government. Since when is that a state secret?

State Department officials have long suffered from what detractors call "client-itis" - too close identification with the nations they serve.

But allowing that proclivity to hide larceny of this scale stretches client-itis beyond the point of absurdity and verges on criminality.

Asked about this, over and over, the department has refused to explain its actions and instead falls back on bromides.

"We are very concerned about corruption in Iraq" deputy spokesman Tom Casey said last week.

At the same time, another State Department office with different political priorities issued the 2008 Human Rights Report a few weeks ago and said "large-scale corruption pervaded the government at all levels." In fact, it concluded, "rampant corruption and organized criminality" are "embedded in a culture of impunity."

Certainly Saddam Hussien's Iraq was corrupt. Who can forget the $656 million in cash discovered behind a wall in one of his palaces? But the United States set up the new government with accountability in mind and, among other steps, mandated that one central office manage contracting for the entire government. The Maliki government repealed that law so that dozens of individual agencies could let contracts - freeing them to demand kickbacks. Various ministries also forbade corruption investigators from entering their buildings. That, plus the assassinations of 31 corruption investigators, convinced Radhi to flee. He and others offered numerous anti-corruption recommendations. Among them:

-Iraqi ministers should make annual income declarations. They have refused.

-Oil terminals should be metered so a record can be kept of the barrels sold. The Oil Ministry objected.

-The U.N. urged Iraq to implement the United Nations Convention against Corruption. Malaki has demurred and instead appointed a new head of the anti-corruption office who, three weeks earlier, had been arrested and sent to jail on corruption charges. He was out on bail.

No one has yet documented theft by Maliki. But suspicions abound because he has worked aggressively to stymie corruption investigations.

In fact, Radhi said Malaki issued a secret order saying he was not allowed to investigate the prime minister or anyone in his cabinet without Maliki's permission. If Radhi believed Malaki was corrupt, he'd have to ask Malaki's permission to investigate.

James Mattil, a former State Department anti-corruption official, said he told the U.S. embassy about all of this. Still, asked about this during a congressional hearing, Secretary of State Condoleezza Rice professed ignorance, adding: "I will have to get back to you."

Now, months later, Congress is still waiting.

The Spy Who Loves Us

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By Philip Giraldi

Pay no mind to the Mossad agent on the line.

After Israeli spy Jonathan Pollard was sentenced to life in prison in 1986, the U.S. negotiated an understanding with Israel—a “gentlemen’s agreement” —stipulating that neither nation would thenceforth conduct espionage operations in the other’s territory without consent. But the agreement was a sham from the beginning. The Israeli government didn’t even honor its commitments in the aftermath of the Pollard case, failing to return the estimated 360 cubic feet of stolen information to enable the U.S. to conduct a damage assessment. The United States, for its part, continued to recruit and run agents inside Israel throughout the 1980s and 1990s. And it was known within the intelligence and counterintelligence communities that Israel did the same in the United States. David Szady, the FBI’s assistant director for counterintelligence, was so dismayed by the level of Israeli spying in the late ’90s that he called in the head of the Israeli Embassy’s Central Institute for Intelligence and Special Activities (Mossad) office and told him, “Knock it off.”

Pollard’s name was in the news again on April 22, when former U.S. Army weapons engineer Ben-Ami Kadish was arrested for passing secrets to Israel. Kadish had been an agent run by Yosef Yagur, who directed Pollard. Yagur, under cover as a science attaché at the Israeli Consulate General in New York, fled the U.S. in 1985 after Pollard was arrested, but remained in touch with Kadish.

The arrest revived suspicions that Israeli agents might still be operating inside the U.S., most particularly “Mega,” whose cover name was revealed in an NSA-intercepted conversation between two Israeli intelligence officers. “Mega” was clearly at the policymaker level, as Kadish and Pollard frequently sought files by name or number. Someone more senior in Washington appeared to be directing the Israeli handlers toward sensitive information. Whoever “Mega” was, he is still at large.

Israeli Foreign Ministry spokesman Arieh Mekel sought to play down the allegations, noting, “Since 1985 there have been clear orders from prime ministers not to conduct these kinds of activities.” The media obediently reported the disclaimer under headlines such as Agence France Presse’s: “Israel says no spying on US since 1985.” But the spokesman had not said that. He referred to “these kinds of activities,” possibly meaning the recruitment of American Jews to work as Israeli intelligence agents. Mekel’s half-hearted denial was a step removed from the Israeli government’s reaction to the 2004 investigation of the American Israel Public Affairs Committee, when then Prime Minister Ariel Sharon and Foreign Ministry spokesman Mark Regev insisted that Israel “does not spy on the United States of America.”

It’s possible that Israel has largely demurred from recruiting American Jews as spies, but Tel Aviv’s intelligence operations in the U.S. have undeniably continued. The magnitude of Israeli espionage is certainly known to some senior government officials and is hidden in classified files. But even evidence available in public records attests to widespread infiltration.

Spy operations run by a case officer directly involving a controlled agent are only one of many tasks delegated to an intelligence service. Other responsibilities might include tapping into communications networks, directing agents of influence in the foreign government who can enable favorable policy decisions, running covert actions that feed misleading information to the media, and arranging technology transfers that frequently rely on companies that are either fronts or co-operating with the intelligence service to obtain secret military or commercial information. Even if Israel has stopped recruiting American Jews—and that is by no means certain—it nevertheless continues to carry out many core intelligence operations in the United States.

Israel has little need to run agents of influence here as its intelligence officers, diplomats, and politicians already have unfettered access to policymakers. It has been reported that the Pentagon under Paul Wolfowitz and Doug Feith—both of whom have been investigated for passing classified information to Israel—took few steps to monitor Israeli visitors. Likewise, the Israeli Embassy has excellent access to the media. When it wants to plant propaganda or place stories intended to shape opinion in a direction favorable to Israel, the Mossad generally looks to the British press. Rupert Murdoch’s Times group of newspapers and the Daily Telegraph, formerly owned by Conrad Black, have featured many articles that clearly originated with Israeli government sources. Such pieces are often picked up and replayed in the United States.

Virtually every U.S. government body concerned with security has confirmed that Israeli espionage takes place, though it is frequently not exposed because FBI officers know that investigating these crimes is frustrating and does no favors for their careers. But Israel always features prominently in the annual FBI report called “Foreign Economic Collection and Industrial Espionage.” The 2005 report states, “Israel has an active program to gather proprietary information within the United States. These collection activities are primarily directed at obtaining information on military systems and advanced computing applications that can be used in Israel’s sizable armaments industry.” It adds that Israel recruits spies, uses electronic methods, and carries out computer intrusion to gain the information.

The focus on U.S. military secrets is not limited to information needed for the defense of Israel, as was argued when Pollard was arrested. Some of the information he stole was of such value that many high-ranking intelligence officers believe the Soviet Union agreed to the release of tens of thousands of Russian Jews for resettlement in Israel in exchange. In early 1996, the Office of Naval Investigations concluded that Israel had transferred sensitive military technology to China. In 2000, the Israeli government attempted to sell China the sophisticated Phalcon early warning aircraft, which was based on U.S.-licensed technology. A 2005 FBI report noted that the thefts eroded U.S. military advantage, enabling foreign powers to obtain hugely expensive technologies that had taken years to develop.

In 1996, ten years after the agreement that concluded the Pollard affair, the Pentagon’s Defense Investigative Service warned defense contractors that Israel had “espionage intentions and capabilities” here and was aggressively trying to steal military and intelligence secrets. It also cited a security threat posed by individuals who have “strong ethnic ties” to Israel, stating that “Placing Israeli nationals in key industries … is a technique utilized with great success.” The memo cited illegal transfer of proprietary information from an Illinois optics firm in 1986, after the Pollard arrest, as well as the theft of test equipment for a radar system in the mid-1980s. A storm of outrage from the Anti-Defamation League led to the Pentagon’s withdrawal of the memo, an apology that predictably blamed the language on “a low-ranking individual,” and a promise that no similar warning would be written again.

But the issue of Israeli spying would not go away. Soon after, the General Accounting Office, the investigative arm of Congress, completed an examination of espionage directed against American defense and security industries. The report described how Israeli citizens residing in the U.S. had stolen sensitive technology to manufacture artillery gun tubes, obtained classified plans for a reconnaissance system, and passed sensitive aerospace designs to unauthorized users. An Israeli company was caught monitoring a Department of Defense telecommunications system to obtain classified information, while other Israeli entities targeted avionics, missile telemetry, aircraft communications, software systems, and advanced materials and coatings used in missile re-entry. Independently, a Defense Department source confirmed the GAO report, citing “dozens of other spy cases within the U.S. Defense industry.” The GAO concluded that Israel “conducts the most aggressive espionage operation against the United States of any U.S. ally.”

In early 2001, several federal government agencies noticed a series of intrusive approaches by Israelis who were ostensibly selling paintings. In June, the Drug Enforcement Administration made a compilation of the activities of the so-called “art students” in a classified report, which was later leaked. The report documents 125 specific attempts by Israelis to gain entry to government offices, residences of government employees, and even Defense Department facilities between January and June 2001. The Israelis “targeted and penetrated military bases” and were observed trying to enter federal buildings from back doors and parking garages. One detained Israeli was caught wandering around the federal building in Dallas with a detailed floor plan in hand. Many of those arrested were found to have backgrounds in “military intelligence, electronic surveillance intercept, or explosive ordnance units.”

Now, there may have been an Israeli student subculture in the U.S. selling cheap reproductions. But it is also clear that the art-student mechanism was used by intelligence officers to provide cover for espionage. The students were organized in cells of eight to ten members that traveled in vans, which provide concealment for electronic equipment. Several of the students were able to afford expensive airline tickets to hop from plane to plane, two of them flying in one day from Hamburg to Miami, then to Chicago, and finally winding up in Toronto on tickets that cost $15,000 each. In Miami and Chicago, they visited two government officials to try to sell their art. Another student had in his possession deposit slips for $180,000. Six students used cellphones provided by a former Israeli vice consul. Many claimed to be registered at either the University of Jerusalem or the Bezalel Academy of Arts in Jerusalem, but not a single name could be connected to the student body list of Bezalel, and there is no University of Jerusalem.

It is plausible that the art students who were actually intelligence officers might have been seeking entry to DEA facilities to gain access to confidential databases. If the broader Israeli espionage effort was focused on Arabs in the United States, such information would be invaluable. The DEA report concluded cautiously that the Israelis “might well be engaged in organized intelligence gathering.” Of the 140 art students arrested, most were deported for immigration violations. Some were just let go.

And then there are the movers. Urban Moving Systems of Weehawken, New Jersey was largely staffed by Israelis, many of whom had recently been discharged from the Israeli Defense Forces. As has been widely reported, three movers were photographed celebrating in Liberty State Park against the backdrop of the first collapsing World Trade Center tower. The celebration came 16 minutes after the first plane struck, when no one knew that there had been a terrorist attack and the episode was assumed to be a horrible accident. The owner of the moving company, Dominik Suter, was questioned once by the FBI before fleeing to Israel. He has since refused to answer questions.

Whether the movers and the art students had jointly pieced together enough information to provide a preview of 9/11 remains hidden in intelligence files in Tel Aviv, but the proximity of both groups to 15 of the hijackers in Hollywood, Florida and to five others in northern New Jersey is suggestive.

Speculation about 9/11 aside, it is certain that Urban Moving was involved in an intelligence-collection operation against Arabs living in the United States, possibly involving electronic surveillance of phone calls and other communications. When they were arrested, the five Israelis working for Urban Moving had multiple passports and nearly $5,000 in cash. They were held for 71 days, failed a number of polygraph exams, and were finally allowed to return to Israel after Tel Aviv admitted that they were Mossad and apologized.

Between 55 and 95 other Israelis were also arrested in the weeks following 9/11, and a number were reported to be active-duty military personnel. The FBI came under intense pressure from several congressmen and various pro-Israel groups to release the detainees. The order to free them came from Judge Michael Mukasey, now the U.S. attorney general. An FBI investigator noted, “Leads were not fully investigated” due to pressure from “higher echelons.” According to one source, the White House may have made the final decision to terminate the inquiry. Though the investigation could have gone much farther, the FBI identified two of the Weehawken movers as Israeli intelligence officers and confirmed that Urban Moving was a front for Mossad to “spy on local Arabs.” One CIA officer involved in the investigation concluded, “The Israelis likely had a huge spy operation.”

In May 2004, there were two incidents involving Israelis in moving vans in proximity to U.S. nuclear facilities. One occurred in Tennessee near the Nuclear Fuel Services plant, which reprocesses nuclear waste from hospitals. The van was pursued by the local sheriff for three miles after refusing to pull over. The two fleeing Israelis, who threw a bottle containing an accelerant, had in their possession Israeli military ID’s and false U.S. documents. In the second incident, two movers in a van tried to enter the Kings Bay Naval Submarine Base in Georgia, which is home to eight Trident nuclear submarines, but were arrested when dogs detected drugs inside their vehicle. The men had military ID’s and false documents. There was no follow-up by the FBI even though both incidents were reported to federal authorities.

There have also been reports of intensive targeting of U.S. government facilities overseas. In late 2001, State Department security noted a series of incidents at diplomatic missions and military bases, all involving Israelis. It described many of the incidents as “bizarre.” In one instance, French police arrested several Israelis at 2 a.m. after they were observed taking numerous photos of the U.S. embassy in Paris. As it was dark, their behavior was unusual to say the least—or perhaps not since it was revealed that the Israelis were using infrared film to detect communications equipment in the embassy.

In August 2004, the media discovered an FBI investigation, begun in 1999, involving Pentagon intelligence analyst Larry Franklin. He had openly met Israeli Embassy intelligence officer Naor Gilon as well as two AIPAC officials, director Steve Rosen and chief analyst Keith Weissman. He pleaded guilty in October 2005 to revealing classified information and is now serving a 12-year prison sentence. Rosen and Weissman are currently on trial. If the prosecution is correct, Franklin passed classified information relating to Iran to both AIPAC employees, who in turn provided the information to the Israeli Embassy. The defense has argued that such exchanges are routine in Washington, particularly between close allies such as Israel and the U.S., but that is a dubious reading of events. Passing classified information and documents is not the same as casual political conversation over a cup of coffee. If Israel had stopped spying on the United States, Gilon should have refused to receive the information provided by Franklin. He might even have gone through official channels to report Franklin’s activity. He did neither. Nor did Rosen and Weissman object when they received information that they knew to be classified. Instead, they passed it on to the Israelis.

In June 2006, it was revealed that the Pentagon had begun to deny security clearances to American Jews who had family in Israel. Israelis seeking security approval to work for American defense contractors were also finding it increasingly difficult to obtain clearances. A Pentagon administrative judge overruled an appeal by one of the Israelis, stating, “The Israeli government is actively engaged in military and industrial espionage in the United States. An Israeli citizen working in the US who has access to proprietary information is likely to be a target of such espionage.”

Israel conducts much of its high-tech spying through its corporate presence in the United States. It is heavily embedded in the telecommunications industry, which permits access to the exchange of information. The Whitewater investigation revealed that President Bill Clinton warned Monica Lewinsky that their phone-sex conversations might have been recorded by a foreign government. That foreign government would have been Israel, where government and business work hand-in-hand in the high-tech sector, and many former government officials and military officers hold senior management positions. The corporations, in return, receive large contracts with the Israeli government and the Israel Defense Forces.

Two Israeli companies in particular—Amdocs and Comverse Infosys, both of which are headquartered in Israel—do significant business in the United States. Amdocs, which has contracts with the 25 largest telephone companies in the U.S. that together handle 90 percent of all calls made, logs all calls that go out and come in on the system. It does not record the conversations themselves, but the records provide patterns, referred to as “traffic analysis,” that can provide intelligence leads. In 1999, the National Security Agency warned that records of calls made in the United States were winding up in Israel. Amdocs also has an apparent relationship with some of the art students who were arrested in 2001. Several were provided with bond money by an Amdocs executive.

Comverse Infosys provides wiretapping equipment to law enforcement throughout the United States and also has large contracts with the Israeli government, which reimburses up to 50 percent of the company’s research and development costs. Because equipment used to tap phones for law enforcement is integrated into the networks that phone companies operate, it cannot be detected. Phone calls are intercepted, recorded, stored, and transmitted to investigators by Comverse, which claims that it has to be “hands on” with its equipment to maintain the system. Many experts believe that it is relatively easy to create a so-called “back door” that permits the recording to be sent to a second party, unknown to the authorized law-enforcement recipient. And Comverse equipment has never been inspected by FBI or NSA experts to determine whether the information it collects can be leaked, reportedly because senior government managers block such inquiries.

According to a Fox News investigative report, which was later deleted from Fox’s website under pressure from various pro-Israel groups, DEA and FBI sources say that even to suggest that Israel might be spying using Comverse “is considered career suicide.”

A number of criminal investigations using Comverse equipment have apparently come to dead ends when the targets abruptly change their telecommunications methods, suggesting at a minimum that Comverse employees might be leaking sensitive information to Israeli organized crime.

The chickens occasionally come home to roost. In 2002, Israeli espionage might have been directed against the U.S. Congress, which has so assidiously ignored Tel Aviv’s spying. Congressman Bob Ney, currently in prison for corruption, arranged a noncompetitive bid for the Israeli telecommunications company Foxcom Wireless to install equipment to improve cellphone reception in the Capitol and House office buildings. Foxcom, based in Jerusalem, has been linked to imprisoned lobbyist Jack Abramoff. Telecommunications security experts note that equipment that can be used to enhance or improve a signal can also be used to redirect the phone conversation to another location for recording and analysis. The possibility that someone in the Israeli Embassy might be listening to congressmen’s private phone conversations is intriguing to say the least.

Some might argue that collecting intelligence is a function of government and that espionage, even between friends, will always take place. But the intensity and persistence of Israeli spying against the United States is particularly disturbing since Israel relies so heavily on American political and military support. Other allies like Britain, France, and Germany undoubtedly have spies in Washington, but there is a line that they do not cross.

Given the stakes involved, it would be reasonable for the United States to quietly offer Israel’s leaders a choice. They can continue to receive billions of dollars in aid, or they can persist in spying against their greatest benefactor. They should not be permitted to do both.

WPost's Enduring Bush Cover-up

Go to Original
By Robert Parry

In a kind of Watergate in reverse, the Washington Post has rallied once again to defend George W. Bush’s honesty, with the paper’s editorial-page editor swatting away the latest swarm of evidence showing how the President took the nation to war in Iraq via a series of lies.

Much as the rival Washington Star in the 1970s let itself be used by Richard Nixon to muddy the Watergate waters – obscuring the mounting evidence of his guilt – now Washington Post editor Fred Hiatt and the newspaper’s hierarchy have lent themselves to the task of covering up Bush’s deceptions about the Iraq War.

This pattern started with the Post’s full-throated endorsement of the false pre-war intelligence on Iraq, continued with its ugly attacks on early war critics like former Ambassador Joseph Wilson, and has carried over to Hiatt’s latest attempt to discredit the Senate Intelligence Committee’s critical findings on Bush’s deceptions.

In his June 9 op-ed, entitled “‘Bush Lied?’ If Only It Were That Simple,” Hiatt seeks to separate Bush’s pre-war statements about Iraq – both its alleged WMD stockpiles and Saddam Hussein’s supposed ties to Islamic terrorists – from the historical context: the war fever that Bush created and exploited.

Hiatt argues that it’s unfair to say Bush lied when there was some intelligence buttressing his public case. In other words, Hiatt advances the argument, long used by Bush apologists, that the President was deceived by the faulty information just like so many others, both Republican and Democrat.

Hiatt notes that Sen. Jay Rockefeller, chairman of the Senate Intelligence Committee which issued the June 5 report critical of Bush’s use of the intelligence, also bought into the false WMD claims in fall 2002.

Hiatt writes: “The phony ‘Bush lied’ story line distracts from the biggest prewar failure: the fact that so much of the intelligence upon which Bush and Rockefeller and everyone else relied turned out to be tragically, catastrophically wrong.”

But Hiatt’s selective history ignores the real story of how the Iraq War was sold, a case in which all the participants shared in propagating the falsehoods while still benefiting from enough ambiguity so they could point the finger at others.

It was like a modern-day execution with the task divvied up into interlocking parts – strapping down the prisoner, inserting the IV, preparing the chemicals, and releasing them. That way, each participant can deny full responsibility if it turns out that the prisoner was innocent and the death was wrongful.

In much the same way, by saying Bush didn’t lie – he was just deceived by erroneous intelligence – Hiatt advances the argument that no one is really at fault.

All Are Guilty

Yet, in the case of the bloody invasion of Iraq – committed under false pretenses and leading to the deaths of more than 4,000 U.S. soldiers and hundreds of thousands of Iraqis – the truth is that all the participants are guilty.

The sequence of responsibility went like this:

--Bush and his neoconservative allies long had lusted for a decisive war against Iraq, plotting such an event from Bush’s very first days in office;

--The 9/11 attacks and the subsequent victory over the Taliban in Afghanistan created a supportive political environment for a wider war;

--The neocon-backed Iraqi National Congress flooded the CIA with wave after wave of fabricated intelligence from supposed Iraqi defectors;

--Neocons in the Pentagon and at the White House created their own ad hoc entities to collect and promote this bogus information;

--CIA analysts, whose commitment to objectivity had been eroding under political pressure since the 1980s, understood that resistance to the false tales was hopeless and likely a career killer;

--By summer 2002, CIA Director George Tenet and other intelligence bureaucrats were making sure the finished analytical products fit with the political desires of the White House (or as the Downing Street Memo revealed, the U.S. intelligence was being “fixed” around the policy);

--By fall 2002, President Bush, Vice President Dick Cheney and other senior officials were hyping the alarmist intelligence, stripping the CIA reports of even the fig-leaf caveats that the analysts had tried to put on;

--The administration worked hand-in-glove with neocon allies in the Washington press corps, including reporters at the New York Times and editorialists at the Washington Post, such as Hiatt, Charles Krauthammer and David Ignatius;

--The few voices of dissent – in government and in the media – were shouted down and ridiculed along with long-time U.S. allies in France and Germany;

--Even the administration’s more moderate voices, the likes of Secretary of State Colin Powell, were recruited into the propaganda operation, helping to further marginalize and silence the remaining skeptics;

--By the eve of war, Bush was the master of America’s political domain, with most Washington politicians in his thrall and the U.S. press corps reduced to the role of excited cheerleaders applauding the shock-and-awe bombing.

[For details, see our book, Neck Deep: The Disastrous Presidency of George W. Bush.]

Who’s at Fault?

Though this daisy chain of activists and enablers shared responsibility for the Iraq invasion, that doesn’t wash the blood off the hands of the various participants, including Hiatt and other pro-war propagandists. Nor does it mean that Bush is NOT a liar.

In fact, the overwhelming evidence is that Bush is a willful (if not pathological) liar, in that he repeatedly misrepresented evidence that he personally knew to be true.

While it may be impossible to say exactly what Bush believed about Iraq’s non-existent WMD before the war, it can’t be seriously disputed that after the invasion, he rewrote the pre-war history to assert that Saddam Hussein “chose” war by not letting the United Nations inspectors in to check for WMD.

“We gave him [Saddam Hussein] a chance to allow the inspectors in, and he wouldn’t let them in. And, therefore, after a reasonable request, we decided to remove him from power,” Bush told reporters on July 14, 2003 – less than four months after the invasion.

Facing no serious challenge from the White House press corps, Bush continued repeating this lie in varied forms as part of his public litany for defending the invasion.

On Jan. 27, 2004, for example, Bush said, “We went to the United Nations, of course, and got an overwhelming resolution – 1441 – unanimous resolution, that said to Saddam, you must disclose and destroy your weapons programs, which obviously meant the world felt he had such programs. He chose defiance. It was his choice to make, and he did not let us in.”

As the months and years went by, Bush’s lie and its constant retelling took on the color of truth. In the frequent repetition of this claim, Bush never acknowledged the fact that Hussein did comply with Resolution 1441 by declaring accurately that he had disposed of his WMD stockpiles and by permitting U.N. inspectors to examine any site of their choosing.

Prominent Washington journalists eventually began repeating Bush’s lie as their own. In a July 2004 interview, ABC’s veteran newsman Ted Koppel used it to explain why he – Koppel – thought the invasion of Iraq was justified.

“It did not make logical sense that Saddam Hussein, whose armies had been defeated once before by the United States and the Coalition, would be prepared to lose control over his country if all he had to do was say, ‘All right, U.N., come on in, check it out,” Koppel told Amy Goodman, host of “Democracy Now.”

Of course, Hussein did tell the U.N. to “come on in, check it out.”

In fall 2002, Hussein’s government allowed teams of U.N. inspectors into Iraq and gave them free rein to examine any site of their choosing. Then, on Dec. 7, 2002, Iraq sent to the United Nations a 12,000-page declaration explaining how its WMD stockpiles had been eliminated.

At the time, the Bush administration – and much of the Washington press corps – mocked those efforts as proof that the Iraqis were continuing their WMD cover-up.

The U.N. inspections continued into March 2003 when Bush decided to press ahead with war and forced the inspectors to leave. After the invasion, U.S. weapons inspectors also found no WMD and concluded that the Iraqis had been telling the truth.

The Plame-gate Affair

As the WMD search came up empty in summer 2003, Bush and his inner circle continued their campaign to punish critics and confuse the public.

The most notorious case was the behind-the-scenes assault on the reputation of former Ambassador Wilson for daring to disclose that Bush had used a false claim in his 2003 State of the Union Address about Iraq obtaining yellowcake uranium from Niger.

As administration officials fanned out to disparage Wilson with friendly journalists, several of the leakers – including Deputy Secretary of State Richard Armitage, White House political adviser Karl Rove and I. Lewis Libby, Vice President Cheney’s chief of staff – also divulged that Wilson’s wife, Valerie Plame, worked for the CIA.

That leak, which surfaced in a Robert Novak column in the Washington Post on July 14, 2003, destroyed Plame’s CIA career and jeopardized foreign nationals who had collaborated with her covert intelligence network.

In September 2003, upset about this collateral damage, the CIA forwarded a criminal complaint to the Justice Department seeking an investigation into the outing of Plame. As far as the CIA was concerned, her classified identity was covered by a 1982 law barring willful exposure of CIA officers who had “served” abroad in the preceding five years.

But Bush and his inner circle could still breathe easily since the probe was under the control of Attorney General John Ashcroft, considered to be a right-wing Bush ally. The White House responded to press inquiries disingenuously, claiming Bush took the leak very seriously and would punish anyone involved.

“The President has set high standards, the highest of standards, for people in his administration,” press secretary Scott McClellan said on Sept. 29, 2003. “If anyone in this administration was involved in it, they would no longer be in this administration.”

A Widening Cover-up

Bush announced his determination to get to the bottom of the matter.

“If there is a leak out of my administration, I want to know who it is,” Bush said on Sept. 30, 2003. “I want to know the truth. If anybody has got any information inside our administration or outside our administration, it would be helpful if they came forward with the information so we can find out whether or not these allegations are true.”

Yet, even as Bush was professing his curiosity and calling for anyone with information to step forward, he was withholding the fact that he had authorized the declassification of some secrets about the Niger uranium issue and had ordered Cheney to arrange for those secrets to be given to reporters.

In other words, though Bush knew a great deal about how the anti-Wilson scheme got started – since he was involved in starting it – he uttered misleading public statements to conceal the White House role.

Also, since the other conspirators knew that Bush already was in the know, they would have read his comments as a signal to lie, which is what they did. In early October, press secretary McClellan said he could report that political adviser Karl Rove and National Security Council aide Elliott Abrams were not involved in the Plame leak.

That comment riled Libby, who feared that he was being hung out to dry. Libby went to his boss, Dick Cheney, and complained that “they’re trying to set me up; they want me to be the sacrificial lamb,” Libby’s lawyer Theodore Wells later said.

Cheney scribbled down his feelings in a note to McClellan: “Not going to protect one staffer + sacrifice the guy the Pres that was asked to stick his head in the meat grinder because of incompetence of others.”

Cheney initially ascribed Libby’s role in going after Wilson to Bush’s orders, but the Vice President apparently thought better of it, crossing out “the Pres” and putting the clause in a passive tense.

Cheney has never explained publicly the meaning of his note, but it suggests that it was Bush who sent Libby out on the get-Wilson mission to limit damage from Wilson’s criticism of Bush’s false Niger-yellowcake claim.

If the Washington Post were still the newspaper it was in the 1970s, it would be building on this body of evidence to make the case that Bush not only lied to the public but committed serious crimes that harmed U.S. national security.

Instead Hiatt and the Post’s editorial pages continue to cover up for a President who has abused his powers and misled the American people – a rear-guard protective role that once was assigned to the now-defunct Washington Star.

"E" for Expeditionary

Go to Original
By Tom Engelhardt

One Man's Online Journey through Bush's Alphabet Soup

The Internet teaches its own lessons, often painfully quickly. In April 2005, I followed an urge, as I often did in those days. Our President, who would soon claim to be spending his spare time absorbing meaty books like King Leopold’s Ghost, Lincoln: A Life of Purpose and Power, and Mao: The Unknown Story, was then largely known for reading The Pet Goat to schoolchildren while the 9/11 attacks were taking place and for being fond of The Very Hungry Caterpillar. So I took a plunge into humor and wrote a mock children’s ABC book that I dubbed "George’s Amazing Alphabet Book of the Contemporary World, or Al-Qaedas All Around." I claimed that the manuscript, produced by George W. himself, had been leaked to my TomDispatch.com website by "a senior official in one of our intelligence agencies."

Maybe it wasn’t Jon-Stewart-worthy, but I posted it anyway as my commentary of the week and thought no more about it until the first angry emails began appearing in the TomDispatch mail box. A number of readers claimed I had been "gulled." I shoulda known! The President could never have written such a document! It had obviously been produced by the CIA! No, the Secret Service! No…

A perfectly sane friend rang up, wondering whether the manuscript could possibly be genuine -- or was I pulling a leg or two? Irritated readers assured me that it was a total fraud and I, a total fool for ever taking the word of that senior intelligence official.

I was stunned. I hadn’t been trying to fool a soul, just make a passing point or two about our President and his people. Still, I got the message -- an instant lesson in Bush-era online reality. You couldn’t out-absurd this administration. You couldn’t write a "document" so extreme that some readers wouldn’t mistake it for the real thing. That was the extremity of our moment -- thank you, George W!

Actually, back in November 2001, that very extremity had driven me on line in the first place and into the waiting arms of what became TomDispatch.com -- after the assaults of 9/11; after we had been at "war" and George had become a "wartime" President with an ever-expanding idea of his own powers; after Americans had engaged in endless 9/11 rites in which we took all the roles in the global drama (except Ultimate Evil One); after we had become the planet’s greatest victims, survivors, and dominators; after, with relentless, repetitive vigor, the heartland had donned hats and t-shirts proclaiming that they "loved" (or hearted) that former Sodom -- to Los Angeles’s Gomorrah -- New York City; after the Patriot Act was reality; after the money -- to "support our troops" -- was already pouring into the Pentagon and allied private corporations; after a budding second Defense Department, the Office of Homeland Security, was a reality (it would be turned into a full-scale Department of Homeland Security in November 2002); after the Bush administration had begun planning for a detention camp at Guantanamo Bay, Cuba, that would become the jewel in the crown of an offshore Bermuda Triangle of injustice; after Secretary of Defense Donald Rumsfeld and other top officials had made clear their urge to "take off the gloves" and commit just about any act imaginable, from kidnapping to torture, against anyone anywhere they believed to be a "terrorist"; after the newspapers I normally read in the still commanding world of print had narrowed their coverage, upped their "patriotism," and were beating the drums for George Bush’s Global War on Terror.

TomDispatch was a happenstance, the unplanned creation of a man too old by half for the medium he stumbled into. It came into existence out of a simple urge not to sit still, not to continue my life as it had been while our already shaky world was being ravaged. Between November 2001 and 2004, it went from a private, no-name group email for perhaps 12 friends and relatives to an official site in cyberspace, backed by the Nation Institute, and featuring a range of provocative writers and thinkers.

Sometime in 2004, the year after the site gained its name, I went out to lunch with a Mexican political cartoonist. In what still passed for real life, I was working, as I had been for almost 30 years, as a book editor in the publishing business and we were discussing a project we planned to do together. At one point, trying to explain his life and world to me, he said: "You know, for Mexicans, the PRI years" -- he was talking about the one-party-state era in his country -- "were shameful times…" He paused and then leaned across the table confidentially, "…but we political cartoonists," he said, "we were like pigs in slop."

In the same confessional mode, what were indisputably the worst years of most of our lives turned out to be a small, late-in-life odyssey for me. Call it "A" for adventure.

TomDispatch is -- as I often write inquisitive readers -- the sideline that ate my life. Being in my late fifties and remarkably ignorant of the Internet world when it began, I brought some older print habits online with me. These included a liking for the well-made, well-edited essay, an aversion to the endless yak and insult that seemed to fill whole realms of cyberspace, and a willingness to go against, or beyond, every byte-sized truth of the online world where, it was believed, brevity was all and attention spans virtually nonexistent. TomDispatch pieces invariably ran long. They were, after all, meant to reframe a familiar, if shook-up, world that was being presented in a particularly limited way by the mainstream media.

Finding myself on a mad, unipolar imperial planet, I simply took the plunge into an alphabet soup of mayhem and chaos. Let me try, now, to offer you my shorthand version of the world according to TomDispatch.

An Expeditionary Service in an Expeditionary World

In late October 2007, when top-level volunteers for duty in Iraq from the U.S. State Department had long since thinned out, Secretary of State Condoleezza Rice threatened to assign diplomats to posts in Baghdad and the provinces, whether they wanted to go or not. This had not happened since the days of the Vietnam War. At an angry "town hall" meeting of career diplomats, a foreign service officer named Jack Croddy denounced the plan. He called it a "potential death sentence." "It’s one thing," he said, "if someone believes in what’s going on over there and volunteers, but it’s another thing to send someone over there on a forced assignment."

David Satterfield, Rice’s deputy, responded: "I certainly understand very much that this is extremely difficult for people who have not contemplated this kind of service." Then he reportedly added, "This is an expeditionary world. For better or worse, it requires an expeditionary service."

An expeditionary world. An expeditionary service. How typical of those muscled-up, faintly un-American phrases -- think "homeland," "regime change," "enhanced interrogation techniques," "extraordinary rendition" -- that the Bush administration has made part of our vocabulary. These were years when American men (and a few women) put on the pith helmets they had last seen in imperial adventure films in the movie theaters of their childhoods, imagined themselves as the imperial masters of a global Pax Americana (as well as a domestic Pax Republicana), and managed to sound as if they were surging across the planet with Rudyard Kipling at their side.

In the good old days of 2002-2003, before a ragtag insurgency in Iraq managed to lay low the plans of the leaders of the Earth’s "sole superpower," the administration’s neoconservative followers and assorted pundits openly touted empire (and, incongruously enough, "freedom"). They spoke glowingly of the United States as a new Rome or a new imperial Britain. The U.S. was to be the last great power on which the sun could never -- in fact, would never dare to -- set. Commentator Max Boot was typical when he wrote of the U.S. military in 2002, that, in its "full-spectrum dominance," it "far surpasses the capabilities of such previous would-be hegemons as Rome, Britain, and Napoleonic France." Of course, back then, a barrel of crude oil was still in the $20 price range.

By that time, the leftover American internationalists, whose weak last hurrah was the Clinton interregnum, had been ousted. Clinton’s eight years had, of course, taken place in the midst of a quarter century-long Republican "revolution" that, in the name of "small government," had ramped up the powers of the national security state and the profile of the Pentagon, while slowly strangling services to the populace. From George W. Bush on down, the officials of the new administration would, however, prove extreme, even by the standards of that right-wing revolution. They arrived triumphantly in Washington as armed, aggressive isolationists who couldn’t swallow the concept of partnership either in Washington or in the world.

The phrase du jour was "unipolarity." In the wake of the Soviet Union’s collapse, there was, it was said, only one Great Power "pole" left on the planet and it was firmly embedded in Washington D.C. The job of the rest of the world was to accept that reality and bend a knee to it. Anything else would be considered a form of terrorism or, as the administration put it in one of its Ur-documents, the National Defense Strategy of the United States of America: "Our strength as a nation-state will continue to be challenged by those who employ a strategy of the weak using international fora, judicial processes and terrorism." There was an unholy troika for you, a genuine axis of evil.

When Bush’s people sallied forth into the world, they did so without equals, and less as classic imperialists than as imperial looters (in conjunction with crony corporations like Halliburton, Bechtel, and Blackwater USA, to whom they slipped their no-bid contracts). Arm-in-arm with a mob of K-street lobbyists, Congressional power brokers, and assorted right-wing think-tanks and media pundits, they were itching to take the world by storm. These were people who imagined no problems that couldn’t be overcome by a shock-and-awe-style military strike abroad. They saw their toughest enemies, however, not overseas, but in Washington. As a result, they first seized the Pentagon, then Kiplinged the military and the intelligence services, sent the State Department into purdah, and set up the most secretive, yet leak-ridden, administration in American memory.

Unlike any previous administration, they arrived in office with a full-scale allied right-wing media network already firmly in place -- their own publishing houses, newspapers, talk-radio shows, and "fair and balanced" TV news. They felt no need to jolly up to, or interact with, the rest of the media. As Bill Keller, executive editor of the New York Times, put it in 2007, "We have endured nearly seven years of the most press-phobic government in a couple of generations."

In the phrase of critic Jay Rosen, the intent of the Bush administration was to "roll back" the media, pacifying and sidelining the major papers and TV networks; and, with the help of the assaults of 9/11, they were more than successful in doing so -- for a time. Never, in fact, had an administration released less news to those covering them. (Most newspapers and the TV news, for instance, gave up even assigning a reporter to cover Vice President Dick Cheney, a man so averse to providing information that his daily schedule was regularly unavailable, while reporters couldn’t even find out the full roster of people working in his "office.")

The administration’s method of ruling revolved around injecting regular doses of fear into the public bloodstream, while dominating an increasingly powerless Congress. If conquering Washington had been the only thing that mattered, the Republicans might have been titans for decades, though it’s worth remembering that to do so they still needed a little help from their enemies -- even ones they didn’t deign to pay the slightest attention to on occupying the Oval Office. After all, they were only conquerors after September 11, 2001. On September 10th of that year, the media was still describing the administration as "adrift"; its Secretary of Defense was believed to have "cratered"; and the President’s polling figures were visibly sagging, thanks to a public which viewed him "not as decisive but as tentative and perhaps overly scripted."

The President, who had just returned from an overlong, much criticized vacation at his "ranch" in Crawford, Texas, was then being charged by figures in his own party and Republicans in Congress with being "out of touch" and out of ideas. Wielding, in Mike Davis’s vivid phrase, hijacked "car bombs with wings," al-Qaeda solved that one fast. As the towers fell and that giant cloud of dust and ash rose toward the heavens, the Bush administration found itself swept along by the perfect storm toward its conquest of Washington.

When it came to conquering the world, however, the President’s top officials would turn out to have an excess of faith and not a clue.

A Faith-based Administration

Let’s start with that faith. Much has been made of the Christian fundamentalist beliefs of George W. Bush and the religious foot soldiers of the Right whom his administration mobilized in the election campaigns of 2000 and 2004. But consider the possibility that the most fundamental belief of the top officials of his administration was, in fact, in the efficacy of force.

If the Republicans emerged from 9/11 as a fundamentalist regime, it wasn’t really as a fundamentalist Christian one. After all, political strategist Karl Rove, Secretary of Defense Donald Rumsfeld, and the Vice President were not Christian fundamentalists, any more than were key Pentagon officials Paul Wolfowitz and Douglas Feith, for example. The administration’s top officials may not, in fact, have agreed among themselves on when (or whether) End Times would arrive, but they all had a singular faith in the U.S. military as the most awesome power projector in history.

They tended to hold individual American military commanders in contempt -- unless they had a very big "Yessir" stamped on their foreheads -- but when it came to the ability of the U.S. Armed Forces to accomplish anything, romantics would be a mild word for what they were. They believed themselves uniquely in possession of an ability to project force in ways no other country ever had; and so, despite much talk of "democracy" and "liberty," a Hellfire-missile-armed Predator drone would perhaps be the truest hallmark of the early twenty-first century American civilization they presided over.

They were in awe of the military at their President’s command, armed to the teeth as it was with techno-toys; already garrisoning much of the globe (and about to garrison more of it); already on the receiving end of vast inflows of taxpayer dollars (and about to receive more of them); and already embedded in a sprawling network of corporate interests (and about to cede further control to such corporations). By the time the Bush administration took the helm of the warship of state, most of the globe had already been divided into U.S. military "commands" -- essentially imperial viceroyships -- but they would finish the job, creating a command for the "homeland," Northcom, in 2002, and for the previously forgotten, suddenly energy-hot, continent of Africa, Africom, in 2007.

The President and his top officials put the lean, mean, high-tech, all-volunteer military on a pedestal and worshipped it as the most shock-and-awesome institution around. Speaking of his war in Iraq in 2007, in a statement typical of his administration’s military hyperbole, Bush said: "I’m confident we’ll prevail because we have the greatest force for human liberation the world has ever known -- the men and women of the United States Armed Forces." The greatest force for human liberation the world has ever known. This was a claim unimaginable from any past president. Then again, all the President’s men had similar warm and fuzzy visions of achieving planetary dominion of a sort that had once, in American parlance, been the goal only of the most evil of foreign powers -- the Nazis, Imperial Japan, or Stalin’s Russia.

When it came to unleashing that force to achieve their aims, they turned out to be fervent utopians and blind believers. They were firmly convinced that, with it, they could reshape the Middle East, establish an unassailable position in the oil heartlands of the planet, roll back the Russians (yet further), and cow the Chinese.

And then, with 9/11, the "Pearl Harbor" of the new century, they suddenly had a divine wind at their backs, a terrified populace ready to be led, a supine Congress, and a pacified media. Everything they believed deeply in seemed just so… well, possible. In faith-based terms, the attacks of 9/11 were a godsend. Not surprisingly, they promptly began to prepare to act on behalf of an angry imperial god by bringing the world -- particularly its energy heartlands -- to heel.

First, however, they created their sacred texts at the heart of which lay the doctrine of "preventive war." At the same time, the President began speaking out about the need to act forcefully to prevent the emergence of any possible threat to the country. As he put it in his 2002 State of the Union Address, "We’ll be deliberate, yet time is not on our side. I will not wait on events, while dangers gather. I will not stand by, as peril draws closer and closer. The United States of America will not permit the world’s most dangerous regimes to threaten us with the world’s most destructive weapons."

Meanwhile, in the office of the White House Counsel and in the Justice Department, acolyte lawyers were creating pretzled legal memos that essentially redefined torture out of existence, clearing a path for any agent or interrogator in the field ready to take off those constraining "gloves." At home, these fundamentalist believers were also working to free the President from all restraints, intending to create a Caesarean commander-in-chief presidency as well as the first imperial vice-presidency in American history.

Because their faith was of the blind sort, however, they would misread the nature of what was powerful in our world; and so their fervent unipolarity would help give premature birth to a newly multipolar planet. Among other disastrous miscalculations, they would confuse the power that lay in the threat of loosing the American military with its actual ability to impose itself on places like Afghanistan and Iraq. They believed, like the monotheists they were, that a single God, personified by the military at their command, would sweep all before Him; that, with a "coalition of the willing" (by which they meant the submissive), they could take their God of force to the heathen at the point of a cruise missile, and that victory would be theirs. We now know just how impossibly wrong this belief would prove to be.

Missing Stories on a One-Way Planet

At his 2006 confirmation hearings for the post of CIA director Michael V. Hayden, who absorbed the Bush ethos while running the National Security Agency, the super-secret electronic spying organization, offered the following promise to Congress: "If confirmed as Director, I would reaffirm the CIA’s proud culture of risk-taking and excellence, particularly through the increased use of non-traditional operational platforms… and the inculcation of what I would call an expeditionary mentality." That same year, then-Director of National Intelligence John Negroponte told the Marine Corps Intelligence Association, "We are developing an ‘expeditionary’ mentality in the field of science and technology."

That old-fashioned imperial idea of an "expeditionary mentality" abroad took on a life of its own in the Bush years. The answer to any problem was that "expeditionary mentality" and the armed expedition that went with it. And disaster, of course, ensued. For the adherents of the cult of force, the world of fantasy took over; the result was an empire of stupidity. If, for instance, you were to offer a reckoning of the Bush administration’s "Global War on Terror," you might -- at least in the world according to TomDispatch -- sum its achievements up this way:

With Guantanamo as the Devil’s Island of the twenty-first century; with the extraordinary renditions, waterboardings, tortures, and abuses (and the perverse memos and photos that went with them); with the CIA’s "ghost prisoners" and network of secret offshore prisons; with that Delta Force intelligence agent who, according to journalist Ron Suskind, stepped off a plane from Afghanistan holding the head of al-Qaeda second-in-command Ayman al-Zawahiri in a "U.S. Government" metal box (the head, it turned out, belonged to someone else); with neither Osama bin Laden nor Zawahiri apprehended; with woebegone terror wannabes, the innocent, and small fry of every sort turned into Public Enemies numbers 1-1,000; with illegal spying and warrantless, limitless surveillance taking hold in "the Homeland"; with the Taliban rising from the grave and the original al-Qaeda (as opposed to name-stealing al-Qaedas elsewhere) finding a "safe haven" in Pakistan’s tribal borderlands; the GWOT (as it so inelegantly came to be known) could easily have been renamed something like the "misfire on terror" (MOT) or even, with an eye to what developed in Iraq and elsewhere, the "engine for terror" (EFT).

Among the administration’s greatest achievements was launching what in the eyes of many globally came to look like a "crusade" -- to use a word that slipped effortlessly out of the President’s mouth soon after 9/11 -- against Islam. In the process, the President’s neocon supporters demarcated an area extending from the western border of China, through the former Central Asian SSRs of the Soviet Union, through the Middle East, down through the Horn of Africa and across North Africa (more or less coinciding with the oil heartlands of the planet), and dubbed it "the arc of instability." Then, from Somalia to Pakistan, the Bush administration managed to set it aflame, transforming an empty turn of phrase into a reality on the ground, an actual arc of instability, even as the price of crude oil soared above $130 a barrel.

For most of these years, much of this was remarkably ill-covered (if covered at all) in the mainstream U.S. media. Almost no American reporter, for instance, considered it worth the bother to write about those massive "facts on the ground" in Iraq, the permanent mega-bases -- heavily fortified American small towns, sometimes 15-20 square miles in area, with multiple bus routes, PXs, brand fast-food outlets, and many of the amenities of home -- that the Pentagon was building at the cost of multi-billions of dollars. (And no television news show thought it worth the bother to show Americans pictures of what their tax dollars had built in Iraq.) Few American journalists in Iraq or Afghanistan bothered to look to the skies and consider the role of air power in the president’s global war (even though air power had been the signature American way of war for well over half a century); almost all of them found the crucial issue of energy flows through the oil heartlands, and the vast oil reserves of Iraq in particular, an embarrassment to mention in conjunction with the invasion and occupation of that country.

From 2002 through 2007, TomDispatch has focused on stories like these, as well as on what underpins so many of the missing stories of these years -- the imperial nature of the American world we’ve been inhabiting. For a brief period in 2002-2003, the neocons and various right-wing pundits were openly beating the drum for "empire," but when Iraq started to go south and the U.S. military visibly ran off the tracks, the words "empire" and "imperial" left the scene of the crime as well -- except at websites like TomDispatch.

And yet, in American thinking, this still remains an imperial planet. Try to imagine, for instance, Iranian President Mahmoud Ahmadinejad landing on an aircraft carrier in the Gulf of Mexico -- as Vice President Dick Cheney did on the USS John C. Stennis on May 11, 2007, while it floated in the Persian Gulf off Iran’s coast -- and saying, as Cheney also did: "With two carrier strike groups in the Gulf, we’re sending clear messages to friends and adversaries alike. We’ll keep the sea lanes open. We’ll stand with our friends in opposing extremism and strategic threats…," and so on.

If that had happened the other way round, it would have been cause for a declaration of war -- and imagine what the press coverage would have been like then. Cheney’s address to the sailors of the Stennis was instead reported as just another humdrum event on our still one-way planet.

In these last years, the Bush administration’s unbounded sense of imperial impunity, and an older American belief that this country possesses a moral code exceptional among nations, have proven a lethal geopolitical cocktail. This curious perspective has led our administration to commit acts of horror in our name, while absolving us from thinking about how others might look on those acts -- and by extension, how they think about us.

Because, for years, so little on these, and similar, subjects made it into print or onto the TV news, there has been a special need and place for online political websites. We started -- and maintained -- discussions that only slowly seeped into the mainstream, even as readers from that world increasingly fled on-line. At the height of the Bush administration’s power and narcissism, what TomDispatch and other sites like it represented was perhaps a simple urge not to let them set an agenda for all of America, and for the planet. This, it turns out, they were incapable of doing -- and for that, perhaps, we should be modestly thankful. When the first histories of our desperate times are finally written, historians will have to turn to the record created by the world of the Internet, or their histories will be as incomplete, the dots as unconnected as they were in the mainstream in these sorry years.

Tom Engelhardt, co-founder of the American Empire Project, runs the Nation Institute’s TomDispatch.com. The World According to TomDispatch: America in the New Age of Empire (Verso, 2008), a collection of some of the best pieces from his site, has just been published. Focusing on what the mainstream media didn’t cover, it is functionally an alternative history of the mad Bush years. This essay is adapted from that book’s introduction. A brief video in which Engelhardt discusses the book and the American mega-bases in Iraq can be viewed by clicking here.

These steps could lower oil prices, but nobody'll take them

Go to Original
By Kevin G. Hall

WASHINGTON — As gasoline prices soar to new records, America's president — and the two men who hope to succeed him — are offering only partial or long-term solutions and ignoring three steps that many experts say could bring some relief now.

Americans began this workweek by crossing a dismal threshold, paying a once-unthinkable nationwide record average of $4.02 per gallon Monday for unleaded gasoline, with the prospect of even higher prices in months ahead.

On Monday, President Bush said one answer is to increase oil drilling in Alaska and offshore. Presumptive Republican presidential nominee John McCain's chief economic adviser renewed McCain's call to suspend the 18.4 cent-per-gallon federal gasoline tax. Presumptive Democratic nominee Barack Obama called for a windfall profits tax on oil companies.

Independent experts, however, said that government could take at least three other steps that could force oil and gasoline prices down immediately. Neither Bush nor McCain nor Obama endorse any of them.

Perhaps the quickest action, the experts said, would be ordering curbs on financial speculation. Financial industry heavyweights have acknowledged in recent testimony before Congress that such speculation is driving oil prices higher.

Pension funds, endowments and other big institutional investors are pumping big money into index funds linked to commodities, including oil, driving up demand — and prices. The popular Goldman Sachs Commodities Index attracted $260 billion in investment last year, compared to $13 billion five years earlier.

Complicating any effort to harness that, about 30 percent of the trading in crude oil is done in "dark areas" — markets in London and Dubai — that aren't regulated by the U.S. Commodity Futures Trading Commission (CFTC).

President Bush could order the CFTC to regulate U.S. investments in those markets with a snap of his fingers, said Michael Greenberger, a law professor at the University of Maryland and a former director of trading for the CFTC.

"Essentially this could be ended this afternoon if the Bush administration had the stomach to do it," he said. "Those abdications of responsibility and allowing these exchanges to trade in 'dark' markets ... provides an environment for speculators to thrive."

The CFTC is investigating the link between speculation and oil prices but hasn't scheduled any action.

A second partial solution would be to boost the supply of oil available on the market by releasing as much as 1 million barrels a day of oil now held in the nation's Strategic Petroleum Reserve. That step is being pushed by, among others, the Center for American Progress, a Democratic think tank run by several former Clinton administration officials.

Do that for 90 days — through the summer driving season when consumer demand for gasoline is highest — and the reserve would lose less than 15 percent of the oil held in case of national emergency.

"Put that on the market, and the price of oil will fall," said Daniel J. Weiss, a senior fellow at the center.

It's not entirely clear that U.S. refineries could handle all that extra oil, but it would signal to traders of oil contracts that the U.S. market is adequately supplied.

Finally, the Federal Reserve could act to boost the weak dollar, which has led oil producers to demand higher prices for oil, because oil generally is traded in dollars. Oil producers want higher prices to offset the cost of converting dollars into euros and other currencies that have grown stronger against the dollar.

The best way to bolster a currency is to boost interest rates, but the Federal Reserve has been reluctant to do that with America teetering on the brink of recession. The central bank in Europe, where growth is more robust, is poised to raise rates, however. That could weaken the dollar further, and drive oil prices even higher.

Senate Democrats on Tuesday will try to muster 60 votes to allow a vote on legislation that could significantly affect the oil industry and oil prices. The legislation would, among other things, instruct CFTC regulators to require investors to plunk down more of their own money if they want to speculate in oil markets.

Instead, Douglas Holtz-Eakin, McCain's chief economic adviser, told McClatchy that a "holiday from the 18.4 cent per gallon federal gasoline tax has lowered prices every time it's been tried "and it is felt all through the economy."

The idea of a gas-tax holiday has little traction in the Democratic Congress, however, and many economists oppose it as likely to spur consumption and make things worse.

Speaking in Raleigh, N.C., Obama on Monday repeated his call for a tax on high oil company profits to fund aid programs for the poorest Americans.

"I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills," he said.

Longer term though, Obama said, the only answers are to increase use of alternative energy — solar, wind, biodiesel, clean-coal technology — and to increase fuel-mileage standards for vehicles and develop hybrid-electric cars, which will take time.

McCain's longer-term answers turn more toward increasing production of oil from offshore and from oil-shale deposits in the mountain West.