Iraq's financial free ride may end

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By ANNE FLAHERTY

Iraq's Free Budget Ride May Be Nearing End As Congress Asks Country to Pay More for Rebuilding

Iraq's financial free ride may be over. After five years, Republicans and Democrats seem to have found common ground on at least one aspect of the war. From the fiercest war foes to the most steadfast Bush supporters, they are looking at Iraq's surging oil income and saying Baghdad should start picking up the tab, particularly for rebuilding hospitals, roads, power lines and the rest of the shattered country.

"I think the American people are growing weary not only of the war, but they are looking at why Baghdad can't pay more of these costs. And the answer is they can," says Sen. Ben Nelson of Nebraska.

Nelson, a Democrat, is drafting legislation with Republican Sen. Susan Collins of Maine and Democrat Evan Bayh of Indiana that would restrict future reconstruction dollars to loans instead of grants.

Their bill also would require that Baghdad pay for the fuel used by American troops and take over U.S. payments to predominantly Sunni fighters in the Awakening movement. Plans are to propose the legislation as part of a war bill to cover spending through September.

Likewise, Sen. Carl Levin, D-Mich., chairman of the Armed Services Committee, said he wants to add a provision to a defense policy bill that would force the Iraqi government to spend its own surplus in oil revenues to rebuild the country before U.S. dollars are spent.

These senators, who are well-known war skeptics, could find allies in lawmakers who support President Bush's current Iraq policies. In hearings last week, Joseph Lieberman, I-Conn., asked Defense Secretary Robert Gates whether Baghdad should start paying some U.S. combat costs, and Lindsey Graham, R-S.C., raised the possibility that an anticipated Iraqi budget surplus this year could be used to help Afghanistan, whose $700 million in annual revenue represents a small fraction of Iraq's $46.8 billion budget.

Bush has suggested that Congress is preaching to the choir. Last week, he noted that Baghdad's latest budget would outspend the U.S. by more than 10 to one on Iraq reconstruction, with American funding for large-scale projects "approaching zero."

"Ultimately, we expect Iraq to shoulder the full burden of these costs," he said.

But lawmakers are skeptical. Considering that past predictions in Iraq have fallen short, the legislation would ensure Iraq assumes more of the financial burden, they say.

On the surface, it looks as though the U.S. has about split the costs of rebuilding efforts with the Iraqis: Congress has appropriated about $47.5 billion since 2003 while the Iraqis have budgeted $50.6 billion. International contributions have totaled $15.8 billion.

And, as Bush pointed out, Iraq's latest budget is on track to outspend the U.S. when it comes to rebuilding. Baghdad has devoted $13.4 billion in 2008 for capital expenses, more than a quarter of its $48.6 billion budget.

However, there is a key difference: Whereas the U.S. has actually spent most of the money it has approved, Iraq hasn't, according to the watchdog agency that audits reconstruction efforts. In 2006 and 2007, for example, Iraq spent only $2.9 billion of its designated $16.3 billion capital budget, which is used to invest in reconstruction projects.

Administration and military officials say the lack of spending isn't sinister.

"Part of it's a lack of expertise. Part of it is a lack of trained people. And part of it, in the past, has probably been politics," Gates told Congress last week. "We think they're making headway on all of those."

Levin said he doesn't buy it, including Bush's declaration that the U.S. is no longer in the business of major reconstruction. Congress received notice on April 3 that the Pentagon planned to transfer $590 million in its war budget to cover construction and infrastructure improvements for Iraq security forces.

"I just think it's totally unacceptable that we say they don't know how to cut a check," Levin said.

A primary cause for the unhappiness in Congress is the high price of oil as the U.S. heads into election season. While Americans are complaining of gasoline prices, officials predict that Iraq is headed toward a major windfall because of the soaring price of oil and record-setting production levels.

For years following the 2003 invasion, a lack of infrastructure kept Iraq's oil production and exports down. But with rebuilding efforts bearing fruit, including U.S.-aided actions to prevent the illegal tapping of pipelines, production had recovered to an average of about 2.4 million barrels per day by late last year compared with 2 million earlier in the year and 1.3 million in early 2003.

Adding to Baghdad's projected surplus is Iraq's conservative estimate of the oil's worth. The country's 2008 budget of $46.8 billion was calculated based on $57 per barrel of oil, roughly half of today's market rate, according to a report by the special inspector general for Iraq reconstruction.

Stuart Bowen, who heads the IG office, predicted in a March hearing that Iraq's oil revenue could climb to as high as $60 billion this year, from early estimates of $35 billion.

The U.S. military isn't reaping those benefits. American troops in Iraq are buying fuel on the open market at $3.23 a gallon and spending some $153 million a month, according to a recent report by The Associated Press.

Collins says the Iraqis should cover those costs.

"It's really difficult for Americans who are struggling with the high cost of the energy to see us paying for fuel costs in a country that has the second-largest oil reserves" and a burgeoning budget surplus, she said.

Wall Street and Washington Are Failing Spectacularly -- Where Do We Go?

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By Joe Costello

I was 19 in October 1979, when I first stepped into a campaign office. It was the Draft Kennedy (Teddy) for President office, located directly east across the Daley Plaza from Chicago’s City Hall. I would work on that campaign across the country for ten months, and it would instill in me an interest in politics, more accurately an interest in the politics of self-government that has lasted 30 years. It was a time when economics dominated political discourse from the nightly news to the kitchen table. Unfortunately, little did I understand, two months before I walked into that campaign office in 1979, President Jimmy Carter had appointed Paul Volcker head of the Federal Reserve, an event that would change American politics for the next three decades. Almost everything I learned on the Kennedy campaign about how American politics worked collapsed over the course of the next ten years. A new political regime, people, institutions, thinking, and culture replaced what had been the dominance of New Deal politics. Monetarism, Reaganomics or Neoliberlism, call it what you may, would totally dominate the American political landscape until today.

This new political regime’s greatest accomplishment was actually something quite extraordinary, they basically removed economics, or at least any meaningful discussion of it, from politics. Various terms like "free markets" and "free trade" became mantras repeated without end and thus believed by most adherents to have a meaning negating any need for further debate. Economics became removed from political discussion to an extent unprecedented in American history. Yet today, the Reagan Revolution seems similar to its New Deal predecessor in 1979, a cultural, ideological and political spent force, not up to meeting the challenges being asked of it in the first decade of the 21st century. Looking a little deeper, it would seem this quaking of Neoliberal politics portends not simply the passing of another regime of our two-centuries-old industrial economics, to which the New Deal also belonged, but a more fundamental revaluation of political economy. A necessary revaluation of economics that will move us beyond the "dismal science."

Looking back at the politics of 1979, what in hindsight can be seen as the end of the New Deal, it is an era seemingly belonging to a different world. The late 1970s and early 1980s were the greatest economic troubles the United States experienced since the Depression and there has been nothing as significant since. Unemployment was high, inflation was high, and the economy was barely growing, a configuration of symptoms economists up to that time didn’t think possible, thus a new name was born, stagflation, and of course in that peculiarly human trait, the naming of something gave the wrongful notion that it was also understood.

Fundamental forces were moving the American economy in the late 1970s, including debt from the Vietnam War, the acceleration of deindustrialization, the slow but continuing deterioration of American post-war global economic dominance, and finally a spike in the price of oil brought about by the U.S. domestic oil production peak in 1973. New Deal politics, which owed a great deal to the thinking of John Maynard Keynes seemed powerless in meeting these challenges. Much of Keynes economic thinking was developed in the Depression and dealt with falling prices, creating demand, and putting to use underutilized capital, while the problems of the 1970s seemed exactly the opposite, rising prices and too much demand. This created an open public dialogue, and thus the 1980 campaigns were all centered around economic ideas. The Kennedy campaign, unbeknown to all involved, became the last stand for New Deal economics, though its corpse would be dragged around by Walter Mondale four years later.

Yet the 1980 campaigns’ economic discussions were for the most part a moot debate. The real discussion and decisions were taking place inside the Federal Reserve. Jimmy Carter had handed over the country and his political career to Paul Volcker. Hitting one of the main pillars of stagflation and carrying out the greatest charge of the then seven-decades-old Federal Reserve, Volcker would raise interest rates to over 20 percent. The economy contracted, Carter lost the election, and the new, or maybe a newly resurrected economic era was birthed.

When one looks at the political economy of the New Deal, one principle stands out -- an active role for government in the economy to bring about a more equitable distribution of wealth. It would be wrong to simply state an active role of the government in the economy, for every government that has ever existed in the history of humankind has played an active role in economic affairs. The greatest shift in this new political economy of Neoliberalism was the abandonment of any notion that the government had a role to play in more equitably distributing wealth. This was done in various ways from removing government oversight of labor relations, drastically dropping upper level income and corporate taxes, and year after year removing government oversight of corporate behavior. Where Keynesian demand-side economics worked to give the middle and lower incomes direct government support, the Neoliberal supply-side doctrine in many ways resurrected the ideas of 19th century Frenchman John Baptiste Say, who claimed supply generated its own demand.

However, it is important to understand New Deal and Reagan Revolution economics; while their means differ, both claim identical ends, to generate goods and the demand to purchase them -- to create a continuum of growth. The greatest difference is New Deal economics claims some responsibility for equitable distribution, while Neoliberalism claims none. This is an important cultural difference.

The Reagan Revolution proved adept in its prime goal of redistribution of wealth from 1980 until today. The Center on Budget and Policy Priorities shows in a 2007 study:

The top 1 percent of the population received 14 percent of the national after-tax income in 2004, nearly double its 7.5 percent share in 1979. (Each percentage point of after-tax income is equivalent to $71 billion in 2004 dollars.) In contrast, the middle fifth of the population, which has 20 times more people in it, received 15 percent of the national after-tax income in 2004, down from 16.5 percent in 1979. The bottom fifth received 4.9 percent of the income in 2004, down from 6.8 percent in 1979.

Yet, the most important cultural impact of the Reagan Revolution was the unleashing of the power of megacorporations. It can be said in the year 2008, in the entire history of the United States, the power of large corporations is as unfettered as any time in American history, and that is saying something. The modern industrial corporation and the American republic were birthed contemporaneously. The basically centralized authoritarian structure of the corporation and the comparatively distributed democratic structure of the republic led to rather a fitful existence between the two from the beginning. Thomas Jefferson was the first to warn of the concentrated power of the new corporate entities. Fifty years later, at the dawn of the first Gilded Age, the great grandsons of America’s second president John Adams, Henry and Charles Adams would warn in their "Chapters of Erie":

And yet already our great corporations are fast emancipating themselves from the State, or rather subjecting the State to their own control, while individual capitalists, who long ago abandoned the attempt to compete with them, will next seek to control them. In this dangerous path of centralization Vanderbilt has taken the latest step in advance. He has combined the natural power of the individual with the factitious power of the corporation. The famous "L’Etat, c’est moi" of Louis XIV represents Vanderbilt’s position in regard to his railroads. Unconsciously he has introduced Caesarism into corporate life. He has, however, but pointed out the way which others will tread. The individual will hereafter be engrafted on the corporation, democracy running its course and resulting in imperialism; and Vanderbilt is but the precursor of a class of men who will wield within the State a power created by the State, but too great for its control. He is the founder of a dynasty.

It would be a warning continually sounded by others across the last decades of the 19th century. Eventually, the Populist Movement would emerge, a uniquely American movement that was a reaction from a dominant but declining agriculture economy to a growing and increasingly powerful industrial economy. The question of concentrated corporate power became a popular concern.

The Populist Movement and the following Progressive era sought democratic republican solutions to the concentration of corporate power, most importantly, to break them up. Understanding Jefferson’s political imperative that any democratic system, any system of self-government, required power to be decentralized or horizontal, while the power of the industrial corporation was as centralized and vertical as any institutions in human history, reformers turned to attempting to break up their power, which became known as antitrust. Unfortunately, corporate power had grown too strong at this point and the antitrust effort was for the most part stillborn.

Instead of turning to the more American notion of decentralized power, American reformers began looking to Europe and particularly Bismark’s Germany. Not only was industrial society creating new vast private entities of power, it was also growing government bureaucracies. The American system gradually began to use government as a counterbalance to the power of corporations, in doing so it needed to keep growing government bureaucracies as corporate power grew, until finally with the New Deal, an agreement was reached. Antitrust basically was abandoned, and a regime of regulation, bureaucratically controlled, was instituted to quell corporate power.

Unfortunately for advocates of the New Deal, the acceptance of concentrated power in the form of corporations was a recipe for democratic failure. The idea that government could regulate such entities proved short lived, as corporations gradually gained control over the government. In the three decades of the Reagan Revolution, corporate power became pervasive across American life, unchallenged by the political class and begrudged but not opposed by the populous. In exchange for an obscene cornucopia of material goods, Americans basically abdicated most of their political power.

Now however, just as in the late 1970s when New Deal economics seemed incapable of solving contemporary problems, Neoliberal solutions seem bankrupt against a rising number of economic concerns, some interestingly enough increasingly resembling the stagflation problem of inflation and slow growth of the 1970s. The greatest of these concerns is a slowing economy brought about by several things, but what might prove most critical in the short run, is a global financial system teetering on the brink of chaos. After three decades of dismantling the financial regulations of the New Deal and simultaneously expanding exponentially, the financial system seems to have become dangerously detached from the hard economy. With first the tech bubble and now the real estate bubble, the financial system resembles something not seen for decades -- a systemic bust -- a situation many of the New Deal regulations sought to not again allow. The damage these bubbles cause are once again being revealed. The answer of the Neoliberals to this point, simply, more of the same.

We have to remember, a robust financial system is one of the key components of Neoliberalism and its blind faith in monetary policy. The bubbles of the past decade are a direct result of monetary policy conducted by the Federal Reserve under the leadership of Alan Greenspan combined with a regulatory laissez-faire attitude toward the private financial system. As the financial system worsens and Fed action increasingly seems ineffective, the words of Fed chief Eccles from the 1930s are bought to mind, "One cannot push on a string."

Two other problems have returned from the 1970s, the first is historic high oil prices coupled with growing inflationary pressures on many basic commodities. These are two trends that have completely reversed in the last several years from what was occurring in the previous two decades, and begin to reestablish trends that were common for most of the 20th century. The Financial Times reports on Barclay’s Equities annual report on stocks and bonds, "Over history, the great enemy of investors has been inflation. Equities have done little more than offer a hedge against it. From 1899 to 1985, U.K. equities’ real return, compared with U.K. retail prices, was negative. Stocks often failed to keep up with inflation. By 2007, the real return on U.K. equities since 1899 was 109 per cent, all of which had in effect been achieved in the past two decades."

And the report adds, "Now, Barclays says, this is coming to an end. Taking a four-year rolling average, inflation on both sides of the Atlantic has risen by more than 1 per cent during the current expansion -- the first time this has happened since inflation was tamed in the early 1980s."

This is quite a quandary for the adherents of Neoliberalism. One great difference between Keynesian and Neoliberal economics was in the rewards system. Keynesian economics with an emphasis on more equitable distribution of wealth concentrated on benefits in the real economy, such as higher wages, benefits and public infrastructure. While Neoliberals, unconcerned for the most part with any notions of wealth equality, concentrated almost entirely on financial rewards, thus the constant need for financial growth and the removing of taxes from gains on capital. This has had a tremendous impact on the American economy as the New York Times reported recently, "Profits from the financial sector now account for 31 percent of total United States corporate earnings -- up from 20 percent in 1990 and 8 percent back in 1950."

Now, the No. 1 enemy of finance is inflation, so as inflation begins to rear its ugly head, the ability for Neoliberalism to provide its benefits, which are at best inequitable, becomes increasingly problematic. For in the school of Neoliberalism, low interest rates are imperative to financial benefits, but low interest rates are impossible in inflationary times. It seems Neoliberalism has run into intrinsic problems just as the New Deal economics did in 1970s.

However, we may very well be at a point of fundamental questions neither the New Deal or Neoliberalism care to ask. For in the end, New Deal and Neoliberal political economy are simply two sides of the same coin. They are a political and cultural school of thought that seeks one end, economic growth. Both ultimately depend on growth in the creation of jobs, growth in the production of goods and growth in consumption each year. They are a school of thought that depends on infinite resources from what every year becomes increasingly clear to the collective mind of humanity is a very finite planet. It is this fundamental contradiction that will increasingly move into the center of all debate on political economy and a question for which neither New Deal or Neoliberal economics has any answers.

This contradiction has appeared most recently in the rise in the price of oil, which is the life’s blood of any economy we have deemed modern for the past century. Global production of crude oil has basically plateaued, while demand has continued to rise. At the same time, the rising standard of living across the globe has given pressure to prices in other commodities. Bloomberg reports:

Farmers aren’t keeping pace with the diets of a burgeoning middle class in India and China. The Department of Agriculture predicted Feb. 8 that U.S. stockpiles for the 12 months through May will drop 40 percent to the lowest since 1948 as global production lags behind consumption for the seventh year in eight.

There’s been unprecedented demand globally for grains,’’ said Gordon Davis, managing director of Melbourne-based AWB Ltd., the largest wheat exporter in Australia. "`It’s being driven by demand for protein in Asia, which reflects rising incomes.’’

Global wheat production for the marketing year through May will probably reach 603 million tons as consumption rises to 619 million tons, according to the USDA. Demand in India, the most-populous nation after China, is up 16 percent since 2001."

The Financial Times adds,

"The broad story is of depletion. Most of the easily obtainable resource deposits have already been exploited, and most usable agricultural land is already in production. Natural resource discoveries, where they continue to occur, tend to be of a lower quality and are more costly to extract. Meanwhile, the dwindling supply of unutilized land faces competing demands from biodiversity, biofuels and food production.

The question becomes, is the world entering a new era, one where the doctrine of unlimited growth has met its limits? The questioning of unlimited growth is not new to political economy; it has been around since almost the inception, beginning most famously, or as most of economic proselytizers of unlimited growth would say most infamously with the thinking of Thomas Malthus. An Englishman born 10 years before the 1776 publication of Scotsman Adam Smith’s seminal The Wealth of Nations, Malthus uncovered a fundamental rule of biological science that became essential to Darwin’s thinking but has been disowned by our unlimited growth scientists of economics.

Outlined in his 1798 "Essay on the Principle of Population," Malthus’ thinking is quite simple. In any limited biological environment, any species population growth rises to the limits of available food production, and once it hits that limit, it will tail-off, much of the time extraordinarily. For example, a population of rabbits in a clover field will grow until it exhausts the supply of clover. The population will then decline to match the lesser availability of clover. Since Malthus, biologists have proven this to be an iron-clad law of the natural world.

However, Malthus theory was held aghast by much of the theological and philosophical world. Humanity’s theological and philosophical history has been one long attempt to hold itself exceptional from the rest of nature. Thus Thomas Carlyle, mid-19th century British historian and wag coined the phrase "the dismal science" to disparage both Malthus and much else of early economic thinking. Yet, Malthus became held in ill-repute nowhere more so than among the economic community. His idea of humanity as part of nature flew in the face of both burgeoning growth economics, the new industrial ethos which seemingly proved man’s control over nature, and of course the much older philosophical and theological conceits of humanity’s natural exceptionalism.

For the next century and half, industrialization swept Western Europe, the United States and some other small parts of the globe. By 1950, the economics of unlimited growth seemed to have vanquished Malthus. World population growth went from less then a billion to over 3 billion, seemingly a direct refutation of Malthus population theory and an even more direct confirmation of the notion of human exceptionalism. However, in the early 1970s, as inflation amongst commodities picked-up, oil supplies tightened and industrial economies slowed, Malthus suddenly made a re-emergence. Organizations such as the Club of Rome in their report "Limits to Growth," thinkers such as E.F. Schumacher in his "Small is Beautiful," and hundreds of thousands of adherents to the growing global environmental movement, all began questioning the industrial economics concept of infinite growth on a finite planet.

Malthus resurgence was short-lived in popular culture. Neoliberalism once again vanquished him and his ideas, and in fact over the last several decades few economic thinkers have taken as much vitriol as old Mr. Malthus. The last 25 years saw the retriumph of the economy of infinite growth, a great virtuous chain of production rewarded by consumption expanded across the globe. Industrialization spread across the planet. Nations such as Korea, Taiwan, and Singapore joined and were followed in the last decade by China, India and Brazil. A grand vision was shaped, a world of over 6 billion people could live like the United States, despite the one simple hard fact -- the United States with 300 million people, 5 percent of the world’s population, was using over 25 percent of the world’s resources. If in fact the planet’s 6 billion people were to live like the United States, several other planets would need to be available, and despite all efforts to date, we are still very much Earthlings. In the last few years, as a billion or so new people have embraced the philosophy of infinite economic growth, it is increasingly clear Malthus must once again be reckoned with. It is increasingly clear, the model of infinite growth on a finite planet is facing serious obstacles; one might say it’s endangering survival for much of the human species. It is time we move beyond the dismal science.

If we are to alter and reform the two centuries old patterns of industrial society, we must also completely re-evaluate our understanding of economics. We can begin to do this quite easily by first rejecting the notion of economics as a science and understand that economics is at its foundation a cultural system. In order to change our industrial society, we will need to change our culture, and we can begin by putting the political back into the economy.

There are several fundamental pillars in reforming political economy:

1. Ending the idea of infinite linear production and consumption in the closed system that is the earth. 2. Moving away from a fossil fuel based energy system. 3. Corporate and government reform. Concentrating on these three interlinking subjects will allow a comprehensive, though in no way exhaustive, look at evolving political economy.

The first thing that must be changed is the linear production and consumption model. We must accept the fact that we live on a finite planet, which means the doctrine of infinite growth is an eventual doctrine of disaster. The first rule we must adopt is to bend the current linear production and consumption process into a circle, which means most importantly, we must realize on a closed system like the earth there is no such thing as waste or garbage. We must look at everything we produce as recyclable, and if it presently isn’t, it must become so.

Secondly, we have to move people off the production-and-consumption hamster wheel. This is the wheel that requires people to work to produce ever more things so they can be rewarded with ever more consumption. An ethic must be developed of not wanting more, but simply wanting enough -- the system as whole must embrace this ethic. People must be enabled to work less and have more time to do other things than just consume.

For breaking out of the linear production and consumption model, the robust evolution of information technologies is going to play a critical role. To this point, information technologies have simply been used to enhance the linear production and consumption model, that is to simply produce more stuff. However, the real value of information technology lies in design, that is, eventually creating more livable societies that use less stuff. Most of our economic institutions will need to be retooled so their most important element is not production, but design. We need to figure out how to design our economy to not produce the most stuff, but more elegantly produce enough. Design is measured not by quantity, but by quality.

The most important element of the modern economy that will need to be redesigned is energy. If there is one thing that can be said that separates the industrial age from all preceding it, it is the exponential rise in energy consumption. Fossil fuels -- oil, coal and natural gas -- have provided industrial society with incredibly cheap and portable sources of energy. Modern society is founded on this simple fact. Yet, we are fast reaching the limits of oil availability and the environmental problems of burning fossil fuels in a closed system like the earth are growing, including the increasing inevitability of altering millenia-old weather patterns.

The interesting thing about industrial society and energy is that energy has been so relatively cheap and plentiful, little thought and even less practice has been given to using it efficiently and conservatively. For example, the automobile, thousands of pounds of steel powered by the internal combustion engine can also be looked at as one of the most energy inefficient methods to move around a 150-pound person. Yet, it has been the automobile that has defined development for the last century. The automobile is the ultimate symbol of infinite growth economics.

On a planet with 6 billion people, the use of energy can be looked at better than any other thing in defining what cultural economist Thorstein Veblen called "conspicuous consumption," which is simply extravagance to publicly display wealth. Now, most Americans look at the use of automobiles or electricity as utilitarian, but looked at from a global perspective, American energy use is an extravagance of historical magnitude. The average Japanese uses 60 percent less energy than the average American. While, the nation of Tanzania has the same population of California’s 35 million people, but an economy 2 percent the size. The annual generation of electricity in Tanzania is less than .1 percent of California.

While over the course of industrial society, the cost of labor has been scrutinized extensively, in most processes, the cost of energy has been paid too little attention. The United States needs to redesign its energy economy, looking to how all its processes can become much more efficient. This includes food production, where Richard Manning in an article in Harpers Magazine writes, "In 1940 the average farm in the United States produced 2.3 calories of food energy for every calorie of fossil energy it used. By 1974 (the last year in which anyone looked closely at this issue), that ratio was 1:1." It also includes redesigning our conspicuous consumption transportation systems, and the redesign of all our buildings and communities. It means redesigning every aspect of American economic life.

It is with the redesign of American energy economy where the conflict between the value system of industrial capitalism -- infinite quantitative growth and the value system of an information intensive society -- qualitative design, becomes readily apparent. The American economy must be redesigned not to use the most energy possible but the least, and for this, industrial society has no value. In large part, it requires information to be released from the constraints of market valuation and to develop a cultural value more similar to the political value of the First Amendment and the Jefferson and Madison imperative of the distribution of information through education being the life-blood of self-government, so it will be too for a society that values design.

Next, a revaluation of political economy will require a reformation of its institutions of power -- corporations and the government. Taking people out of the production and consumption cycle, giving them more extensive education, greater roles processing information, and greater design controls requires the flattening of decision making. Corporations are very centralized in decision making or as the Adams brothers stated in 1870, corporations had introduced Caesarism into the republic. It must be noted with little irony that in recent years, the term Czar, which is Russian for Caesar, has become ever more prevalent as a government solution. Decision making in the institutions of the republic itself has over the last century gone from flat to a very centralized hierarchy in D.C.

In getting real value out of information, design must become an integral component to all aspects of society, and that means decision making must become a larger and more meaningful aspect of everyone’s life, whether it is individual decisions or those taken with association. This means our corporate and government institutions, which have symbioticly grown more centralized and powerful over the course of the 20th century, must be most simply broken up and restructured. This means more power to locality, not as independent entities, but as nodes in a distributed network.

The Internet has provided the model for a workable horizontally distributed network. Opposed to millenia-old traditional hierarchies, the Internet has shown that order can be gained not just from centralized control, but through distributed simultaneous actions. To this point, the Internet has been used most effectively as means to consolidate corporate power, which is a little ironic. It should be a warning that we have long way to go in understanding how to make this work. Yet the simple answer to begin corporate reform is to break them up, all corporations should face a limit on their size.

Luckily for Americans, the American system was founded as a mixed horizontal-vertical system. It’s hard for Americans to understand, given both their atrocious history educations and the centralist propaganda that all who are alive today have been fed their entire lives, that at the beginning of the republic and for most of the first century, any American’s interaction with government power was overwhelmingly at the local level. Today, however, after two centuries, government has both centralized and atrophied in Washington D.C. Power needs to devolve from D.C, not to the states, but to cities and counties, then connections must be made between the cities and counties. There’s no need for intercity policy having to be made in state capitals or D.C; the cities can interact amongst themselves and develop appropriate actions.

Most importantly, the reformation of corporations and government will call for a revitalization and a necessary evolution of the role of citizen. It will call for people to take time previously given to the production and consumption cycle and devote it to what might best be defined as an expanded role of the citizen. Considering today most Americans have at best a most limited role as citizen -- making a joke of the very notion of modern self-government -- expanding the role of the citizen will not be hard. But it means much more than people re-engaging in the traditional citizen affairs they have abandoned; it means creating new roles in information processing, valuing design and distributed decision making.

Some will immediately attack the notion of a revived citizen as naive or romantic, but it is nothing of the sort. Culturally we must value these roles to as great a degree as we today value work in the production cycle, or as a responsibility as important as parenting. Citizenship must be stripped of the notion that is voluntary and must be understood to be necessary. It must be looked at not as shining and exemplary, but more like work, much of the time simply an unavoidable drudgery, with the inescapable sad but nonetheless enlightening conclusion that the nirvana of democracy is meetings.

Thus we stand at an amazingly necessary cultural turning point in history. We must put the political back into the economy, and in so doing we must evolve both. Some who have read this short essay will gripe it is too short on specific answers, but this is by design. In bringing about this change, a crucial insight of democratic historian Lawrence Goodwyn must be kept in mind. Any movement for democratic change inherently relies on experience. The institutions and new roles of the citizen will come out of actual actions and implementation. We must regain the courage and wisdom of this republic’s founders who looked at their work as an experiment in self-government. We must do the same.

So much of the change we face is cultural, a revaluation of value, and history shows this is never easy. In many ways, the era we live in is most analogous to Europe right before the Reformation, where one doctrine held almost complete sway over life and was reinforced by centralized institutions speaking a vocabulary the vast majority couldn’t understand. Yet the rot and insufficiencies became so great, the old doctrine proved untenable for a new era. If we are to provide change that is now so obviously necessary, we’ll have to have the fortitude of that little Augustinian monk and state, "Here I stand, I can do no other."

Joe Costello is a communication and energy consultant. He served as communications director for Jerry Brown’s 1992 presidential campaign and senior advisor on Howard Dean’s 2004 campaign.

The Bush Admin's How-to Guide for Using Religious Warfare to Destroy Iraq

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By Joshua Holland

Here’s a thought exercise.

Imagine if the greatest minds this country has to offer were assembled in a conference room and tasked with drawing up a post-invasion plan that would lead to sectarian bloodshed in a country like Iraq -- where different groups had long lived side-by-side, intermarried and thought of themselves first and foremost as Iraqis, rather than as Shiites and Sunnis.

Their first recommendation would probably be to create an environment in which conflict would be likely to flourish. It would be a good idea to go into the country with enough heavy weaponry and air power to defeat the national army, but too few troops to provide security on the ground after the fact. When anarchy reigns, people look inward -- to their family, neighborhood and, yes, their religious community -- and develop a distrust of members of other communities.

If some military experts -- say the Army Chief of Staff -- said that the planned force would be insufficient for providing day-to-day security, one would probably want to humiliate and undermine him publicly. Maybe announce his successor 14 months before the end of his term so that he appeared before the world as some batty lame duck without any support from his superiors.

Then, dismantle the entire government, instead of just the senior leadership, and fire all of the country’s bureaucrats, police and security personnel -- even if there were a half-million of them. But don’t disarm them -- those weapons will come in handy later.

It would be good to destroy the country’s infrastructure, too -- people get pissed off when they lack reliable electricity, working sanitation facilities, clean running water and the like. Make sure not to get those things up and running within five years of the invasion, either. That’s a challenge, especially if one wants shovel tens of billions of dollars of American tax-payers’ cash into the reconstruction effort.

The best way to achieve that trick would be to create enormous umbrella contracts with dozens of projects within their scope -- far too many for any firm to complete without farming out projects to dozens of subcontractors -- and hand those out to well-connected firms -- firms with terrible track records if possible. Make those contracts "cost-plus" - guaranteeing a profit regardless of the quality of the work -- add in minimal oversight and you’ve created excellent incentives for graft, corruption and incompetence (this solution would likely come from an economist sitting on that prestigious panel).

While you’re at it, it would probably be best to rapidly privatize the large state-run companies that guaranteed employment for a large portion of the population. Make sure to ship in tens of thousands of foreign guest workers from places like India and the Philippines, and, if possible, pass a binding law that prevented any new government from giving preference to domestic firms or firms that employ large numbers of locals in its contracting. Otherwise, with a huge influx of foreign investment coming in, it’s unlikely that there’d still be an unemployment rate of between 25-50 percent five years after the invasion.

If a working group within the government -- say at the State Department -- recommended that a job program be created for the newly-unemployed -- including those heavily armed members of the former regime’s security forces -- ignore it at all costs. Idle hands are, after all, the Devil’s tools.

When chaos first breaks out, as it inevitably will, dismiss it with a sound-byte -- maybe just say, "democracy is messy."

Make sure to leave dozens of large weapons caches unguarded for easy looting -- they’ll come in handy later.

With the stage set, now comes the tricky part. How would that group of August thinkers replace a strong national identity -- one of the strongest in the region -- with a fractured sectarianism?

It would require some sophistication -- the key task is taking a population that has had all the "ancient blood-hatreds" that one finds among American Lutherans and Methodists, and deepen that sense of sectarian identity to a very large degree.

That group of experts might come up with something like this: encourage the formation of political parties on sectarian rather than ideological lines. Discourage the formation of any nationalist parties that might draw support from all of the country’s ethnic and sectarian groups. Then hold an election before establishing any neutral democratic institutions -- no credible electoral commission, no functioning judiciary. Do it while there’s still chaos on the ground -- that way, it will be far too dangerous for the candidates to be listed by name and people will only be able to vote for sectarian-based "lists." What will be achieved is not an exercise in democracy, but an ethno-sectarian census. If done right, this will effectively replace the population’s concrete political and economic interests with a sense that their futures are explicitly tied to their sectarian or ethnic group.

Before holding elections, it would be wise to pass a law effectively banning thousands of leading members of a powerful minority from the political process.

Then prop up a ruling coalition dominated by one sect. But not dominated by just anyone from that sect; make sure it’s a government with a deeply unpopular agenda that includes partitioning the country into small regional quasi-states, privatizing its energy sector and accepting the long-term presence of foreign troops.

With a little luck, and the smart appointments of a few highly-sectarian individuals to key ministries -- hopefully individuals with a lot of blood on their hands -- the new government’s security services will quickly be infused with sectarian militiamen loyal to the dominant group. If this is handled right, sectarian militias will also no doubt rise from within the minority’s ranks to defend the community from the government which, by this time, will be seen as highly sectarian and not at all democratic.

When that nice, hot mix of fighting factions has been established, make sure to arm and fund all sides.

All of these efforts should keep things boiling nicely. But it needs to be accompanied by a media strategy; it would be best to repeat, over and over and over again, that everything going wrong in the target country is a result of sectarian strife, and sectarian strife alone.

Ideally, one would try to get the media to avoid reporting -- or even mentioning -- the significant political divides that one has helped establish, in the hope of creating a conventional wisdom that is so universal that it spreads to the far reaches of the global media.

With the American press hard at work on the story, that shouldn’t be too difficult.

The final task is to keep a powerful nationalist movement from rising, especially one with a popular agenda. That’s fairly simple - one would need to ignore indigenous reconciliation efforts, launch attacks and detain nationalists whenever possible and marginalize them when it’s not. Try to exclude them from the political process as much as is practical. If a charismatic nationalist should emerge, always refer to him as a "radical," even if he consistently shows restraint (don’t worry, reporters won’t ask exactly what it is that makes him so radical).

If all this is done correctly, it will result in a great prize of propaganda. First, one can shift some blame. Even if, as the final authority, everything one touches turns to crap, one can simply blame it on the wild-eyed, primitive Muslims, with their inability to accept the gift of freedom.

Even better, one can then claim that an indefinite occupation is necessary because if one withdraws, genocide is likely to ensue. This’ll work even if none of the conditions that experts say lead up to genocide are present in the country. It’ll even work on many of the people who opposed the war in the first place and who now want to do the right thing for a country that their government decimated in the first place.

Now, here’s the interesting thing about all of this. It turns out that this plan -- one that might have been cooked up by that hypothetical panel of brilliant thinkers -- is exactly what the United States has in fact done in Iraq since its unprovoked invasion of the country in 2003.

It might have been part of a strategy to "divide and conquer," but it also could have been achieved through a potent combination of cultural ignorance, ideological rigidity, rank incompetence and a touch of cronyism.

According to a "briefing for Western readers" found on the Iraqi newsblog, Gorilla’s Guides, The U.S., seeking to create a compliant government in Baghdad ...

...searched for Iraqi political actors [who] would act as an adjunct to the occupation. Local secular political forces were marginalized by the American occupiers who did not want people who it deemed to be too nationalist in the Iraqi government ... Instead it sought out religious parties, groupings, and politicians who it believed would be less experienced and more compliant.

...Intensifying Iraqi resistance to the American occupation of Iraq strengthened the occupying forces’ opposition to Iraqi nationalism in all its forms. The US occupiers aggressively promoted a view of Iraqi politics that focused entirely upon ethnic/religious questions and completely ignored the long tradition of secular nationalism.

Iraqis appear to grasp this dynamic quite well, even if consumers of the Western media don’t. As the Washington Post reported in late 2006, "a strong majority of Iraqis want U.S.-led military forces to immediately withdraw from the country, saying their swift departure would make Iraq more secure and decrease sectarian violence, according to new polls by the State Department and independent researchers" (emphasis mine).

The U.S. is not the first to encourage sectarianism in Iraq - the Ottoman Empire, the British and even Saddam Hussein worked to "divide and rule," but with very limited success in each case. As the Gorilla’s Guides briefing notes:

The British colonial policy of "divide et impera" by fostering sectarian and or ethnic bitterness was notably less successful in Iraq than elsewhere. Iraqis had then and have now, a strong sense of being specifically Iraqi, and referred to themselves as "Iraqis" and the country in which they lived as "Iraq."

Despite our best attempts, we don’t appear to be doing much better than the Brits did in the last century. The Iraqi government that began with power divided along ethnic and sectarian lines has substantially realigned itself. What began as a largely Shiite ruling coalition has seen a number of nationalist Shiite parties defect, and has replaced them with compliant Sunni and Kurdish parties (the governing coalition now rests on two Shia, two Kurdish and one Sunni party, all of which support the United States’ agenda for Iraq). At the same time, a bloc of nationalists -- also representing all of Iraq’s major ethnic and sectarian groups -- has formed to oppose that agenda in the parliament. That nationalist bloc now has a majority of lawmakers in that body (this dynamic, which the New York Times and Washington Post will get around to reporting any day now, is what American politicians don’t discuss when complaining about Iraq’s "dysfunctional government").

And that divided identity also hasn’t caught on with the Iraqi people as a whole. Sociologist Mansoor Moaddel, with the University of Michigan Institute for Social Research (ISR), was part of a team that conducted a series of surveys of Iraqi attitudes between 2004 and 2007, and concluded: "Iraqis have a strong sense of national identity that transcends religious and political lines." The survey found that Iraqi nationalism is on the rise, with twice as many Iraqis identifying themselves as such than the number who see themselves as Muslims first and foremost. "This is a much higher proportion than we found in other Middle Eastern capitals," said Moaddel. He concluded that it’s a mistake to believe that the sectarian street-fighting of recent years "represents widespread sentiment among Iraqis as a whole... the Iraqi public is increasingly drawn toward a vision of a democratic, non-sectarian government for the country."

Now we have to set a timetable for an orderly withdrawal and leave the Iraqis free to create that "democratic, non-sectarian state" on their own terms.

Joshua Holland is an AlterNet staff writer.

US Foreclosure Filings Jump in March

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The onslaught of homes facing foreclosures has yet to ebb, a research report showed Tuesday, with bank repossessions skyrocketing last month as more troubled homeowners mailed in their keys and walked away.

And the worst isn't over: the wave of adjustable-rate loans resetting to higher rates will crest in May and June. And that's expected to push more homeowners into default and foreclosure in the third and fourth quarters of this year, according to RealtyTrac Inc. of Irvine, Calif.

"Once we're through that batch of loans, the worst will have been worked through the system," said Rick Sharga, RealtyTrac's vice president of marketing.

The number of U.S. homes receiving at least one foreclosure filing jumped 57 percent in March to 234,685, compared with 149,150 properties a year earlier. Filings include default notices, auction sale notices and bank repossessions.

The overall foreclosure rate is 5 percent higher than in February, which saw an unexpected month-to-month decline over January. March marked the 27th consecutive month of year-over-year increases in national foreclosure filings.

That meant one in every 538 households received a filing during the month. Forty-four percent were households that slipped into default for the first time and more than a fifth were homes banks took back.

Lenders took possession of homes at a sharply higher rate, up 129 percent over last year, as more homeowners relinquished their homes, said Sharga. Banks repossessed 51,393 properties nationwide, many of them without a public foreclosure auction.

"In a lot of cases, banks worked something out with the owner in advance and took back the keys and deed. For a homeowner, it's not as embarrassing and it's a little less of a blemish on their credit record compared to a foreclosure," Sharga said.

He estimates between 750,000 and 1 million bank-owned properties will hit the market this year, or about a quarter of the homes up for sale. In some areas, these properties will continue to slow sales and depress prices further.

Declining home prices and stricter lending requirements have exacerbated the foreclosure environment. Homeowners stuck in unmanageable mortgages aren't able to sell their homes or refinance into cheaper loans before their mortgage payments reset higher.

Nevada clocked in the worst foreclosure rate for the 15th straight month. Last month, one in every 139 households received a foreclosure-related notice, nearly four times the national rate. The number of properties with a filing increased 24 percent over February and 62 percent over the previous March.

California had the second-highest foreclosure rate in the country. One in every 204 California households received a foreclosure-related notice. The state had 64,711 properties facing foreclosure, the most of any state and more than double last year's total.

In Florida, 30,254 homes reported at least one filing, down nearly 7 percent from February, but up 112 percent from the year before.

Rounding out the states with the highest foreclosure rates were Arizona, Colorado, Georgia, Ohio, Michigan, Massachusetts and Maryland.

Copayments Soar for Drugs With High Prices

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By Gina Kolata

Health insurance companies are rapidly adopting a new pricing system for very expensive drugs, asking patients to pay hundreds and even thousands of dollars for prescriptions for medications that may save their lives or slow the progress of serious diseases.

With the new pricing system, insurers abandoned the traditional arrangement that has patients pay a fixed amount, like $10, $20 or $30 for a prescription, no matter what the drug's actual cost. Instead, they are charging patients a percentage of the cost of certain high-priced drugs, usually 20 to 33 percent, which can amount to thousands of dollars a month.

The system means that the burden of expensive health care can now affect insured people, too.

No one knows how many patients are affected, but hundreds of drugs are priced this new way. They are used to treat diseases that may be fairly common, including multiple sclerosis, rheumatoid arthritis, hemophilia, hepatitis C and some cancers. There are no cheaper equivalents for these drugs, so patients are forced to pay the price or do without.

Insurers say the new system keeps everyone's premiums down at a time when some of the most innovative and promising new treatments for conditions like cancer and rheumatoid arthritis and multiple sclerosis can cost $100,000 and more a year.

But the result is that patients may have to spend more for a drug than they pay for their mortgages, more, in some cases, than their monthly incomes.

The system, often called Tier 4, began in earnest with Medicare drug plans and spread rapidly. It is now incorporated into 86 percent of those plans. Some have even higher co-payments for certain drugs, a Tier 5.

Now Tier 4 is also showing up in insurance that people buy on their own or acquire through employers, said Dan Mendelson of Avalere Health, a research organization in Washington. It is the fastest-growing segment in private insurance, Mr. Mendelson said. Five years ago it was virtually nonexistent in private plans, he said. Now 10 percent of them have Tier 4 drug categories.

Private insurers began offering Tier 4 plans in response to employers who were looking for ways to keep costs down, said Karen Ignagni, president of America's Health Insurance Plans, which represents most of the nation's health insurers. When people who need Tier 4 drugs pay more for them, other subscribers in the plan pay less for their coverage.

But the new system sticks seriously ill people with huge bills, said James Robinson, a health economist at the University of California, Berkeley. "It is very unfortunate social policy," Dr. Robinson said. "The more the sick person pays, the less the healthy person pays."

Traditionally, the idea of insurance was to spread the costs of paying for the sick.

"This is an erosion of the traditional concept of insurance," Mr. Mendelson said. "Those beneficiaries who bear the burden of illness are also bearing the burden of cost."

And often, patients say, they had no idea that they would be faced with such a situation.

It happened to Robin Steinwand, 53, who has multiple sclerosis.

In January, shortly after Ms. Steinwand renewed her insurance policy with Kaiser Permanente, she went to refill her prescription for Copaxone. She had been insured with Kaiser for 17 years through her husband, a federal employee, and had had no complaints about the coverage.

She had been taking Copaxone since multiple sclerosis was diagnosed in 2000, buying 30 days' worth of the pills at a time. And even though the drug costs $1,900 a month, Kaiser required only a $20 co-payment.

Not this time. When Ms. Steinwand went to pick up her prescription at a pharmacy near her home in Silver Spring, Md., the pharmacist handed her a bill for $325.

There must be a mistake, Ms. Steinwand said. So the pharmacist checked with her supervisor. The new price was correct. Kaiser's policy had changed. Now Kaiser was charging 25 percent of the cost of the drug up to a maximum of $325 per prescription. Her annual cost would be $3,900 and unless her insurance changed or the drug dropped in price, it would go on for the rest of her life.

"I charged it, then got into my car and burst into tears," Ms. Steinwand said.

She needed the drug, she said, because it can slow the course of her disease. And she knew she would just have to pay for it, but it would not be easy.

"It's a tough economic time for everyone," she said. "My son will start college in a year and a half. We are asking ourselves, can we afford a vacation? Can we continue to save for retirement and college?"

Although Kaiser advised patients of the new plan in its brochure that it sent out in the open enrollment period late last year, Ms. Steinwand did not notice it. And private insurers, Mr. Mendelson said, can legally change their coverage to one in which some drugs are Tier 4 with no advance notice.

Medicare drug plans have to notify patients but, Mr. Mendelson said, "that doesn't mean the person will hear about it." He added, "You don't read all your mail."

Some patients said they had no idea whether their plan changed or whether it always had a Tier 4. The new system came as a surprise when they found out that they needed an expensive drug.

That's what happened to Robert W. Banning of Arlington, Va., when his doctor prescribed Sprycel for his chronic myelogenous leukemia. The drug can block the growth of cancer cells, extending lives. It is a tablet to be taken twice a day - no need for chemotherapy infusions.

Mr. Banning, 81, a retired owner of car dealerships, thought he had good insurance through AARP. But Sprycel, which he will have to take for the rest of his life, costs more than $13,500 for a 90-day supply, and Mr. Banning soon discovered that the AARP plan required him to pay more than $4,000.

Mr. Banning and his son, Robert Banning Jr., have accepted the situation. "We're not trying to make anybody the heavy," the father said.

So far, they have not purchased the drug. But if they do, they know that the expense would go on and on, his son said. "Somehow or other, myself and my family will do whatever it takes. You don't put your parent on a scale."

But Ms. Steinwand was not so sanguine. She immediately asked Kaiser why it had changed its plan.

The answer came in a letter from the federal Office of Personnel Management, which negotiates with health insurers in the plan her husband has as a federal employee. Kaiser classifies drugs like Copaxone as specialty drugs. They, the letter said, "are high-cost drugs used to treat relatively few people suffering from complex conditions like anemia, cancer, hemophilia, multiple sclerosis, rheumatoid arthritis and human growth hormone deficiency."

And Kaiser, the agency added, had made a convincing argument that charging a percentage of the cost of these drugs "helped lower the rates for federal employees."

Ms. Steinwand can change plans at the end of the year, choosing one that allows her to pay $20 for the Copaxone, but she worries about whether that will help. "I am a little nervous," she said. "Will the next company follow suit next year?"

But it turns out that she won't have to worry, at least for the rest of this year.

A Kaiser spokeswoman, Sandra R. Gregg, said on Friday that Kaiser had decided to suspend the change for the program involving federal employees in the mid-Atlantic region while it reviewed the new policy. The suspension will last for the rest of the year, she said. Ms. Steinwand and others who paid the new price for their drugs will be repaid the difference between the new price and the old co-payment.

Ms. Gregg explained that Kaiser had been discussing the new pricing plan with the Office of Personnel Management over the previous few days because patients had been raising questions about it. That led to the decision to suspend the changed pricing system.

"Letters will go out next week," Ms. Gregg said.

But some with the new plans say they have no way out.

Julie Bass, who lives near Orlando, Fla., has metastatic breast cancer, lives on Social Security disability payments, and because she is disabled, is covered by insurance through a Medicare H.M.O. Ms. Bass, 52, said she had no alternatives to her H.M.O. She said she could not afford a regular Medicare plan, which has co-payments of 20 percent for such things as emergency care, outpatient surgery and scans. That left her with a choice of two Medicare H.M.O's that operate in her region. But of the two H.M.O's, her doctors accept only Wellcare.

Now, she said, one drug her doctor may prescribe to control her cancer is Tykerb. But her insurer, Wellcare, classifies it as Tier 4, and she knows she cannot afford it.

Wellcare declined to say what Tykerb might cost, but its list price according to a standard source, Red Book, is $3,480 for 150 tablets, which may last a patient 21 days. Wellcare requires patients to pay a third of the cost of its Tier 4 drugs.

"For everybody in my position with metastatic breast cancer, there are times when you are stable and can go off treatment," Ms. Bass said. "But if we are progressing, we have to be on treatment, or we will die."

"People's eyes need to be opened," she said. "They need to understand that these drugs are very costly, and there are a lot of people out there who are struggling with these costs."

Mosaic News - 4/11/08: World News from the Middle East

The World According to Monsanto

On March 11 a new documentary was aired on French television (ARTE – French-German cultural tv channel) by French journalist and film maker Marie-Monique Robin, The World According to Monsanto - A documentary that Americans won't ever see. The gigantic biotech corporation Monsanto is threatening to destroy the agricultural biodiversity which has served mankind for thousands of years

Cheney, Torture and the Chance to Restore the Rule of Law

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By John Nichols

The Constitution of the United States is absolutely clear when it comes to matters of torture.

Amendment 8 specifically states that,"Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."

Acts of torture are by definition and common understanding -- certainly at the time of the drafting of the nation’s essential document and arguably even in this less-enlightened era -- cruel and unusual punishments

Vice President Dick Cheney, when he assumed the second most powerful office in the land after the disputed election of 2000, swore an oath to "support and defend the Constitution of the United States against all enemies, foreign and domestic" and to "bear true faith and allegiance to the same."

Any reasonable reader of that oath would conclude that Cheney bound himself to abide by the Constitution -- and thus to avoid any involvement with the promotion of acts of torture upon detainees of the United States government.

Yet we now know from revelations made by former senior intelligence officials to ABC News and the Associated Press that Cheney and other members of the administration -- who apparently took care to insulate President Bush from a series of meetings where CIA interrogation methods were discussed -- authorized the use of waterboarding and other generally recognized torture techniques.

There is no question that Cheney violated his oath of office, which bound him to support and defend a Constitution that he disregarded.

The question is: How will responsible Americans respond?

The power to hold Cheney to account rests with Congress.

The power to get Congress to act rests with the American people.

Former Salt Lake City Mayor Rocky Anderson, a respected lawyer who has been working with a number of other Constitutional experts and activists, has responded -- not just to Cheney’s trashing of the Constitution but to the long list of Bush administration wrongs.

Anderson is circulating a letter that reads:

As patriotic Americans, we believe in knowing the truth about our government. Regardless of political affiliation, we believe in our constitutional democracy. We believe in the rule of law – that no person, regardless of position, is above the law.

We believe in respecting basic human rights – and have been proud to distinguish our nation from those countries where people are kidnapped, disappeared, and tortured.

We believe that in a democracy likes ours, citizens are entitled to know whether government officials are living up to their oaths to defend and preserve the Constitution, and whether they are abusing the human rights of people here or elsewhere in the world.

This is not a partisan matter. It is a matter of responsible citizenship.

Recently, several conscientious members of the House Judiciary Committee, including the Chair, Congressman John Conyers, have indicated support for public hearings to investigate and disclose the facts concerning claims of illegal conduct and other abuses of power by members of the Executive Branch. If misconduct has occurred, the American people are entitled to know. If misconduct has not occurred, hearings will determine and disclose that as well.

By showing that the American people – without political partisanship – support the disclosure of the truth through public hearings, we can make a difference, together standing up for the truth, the rule of law, and our Constitution.

• We are entitled to know whether members of the Executive Branch misrepresented the facts and withheld crucial information, thereby deceiving our nation and the international community before the invasion of Iraq.

• As American citizens who value the system of checks and balances among the three branches of government, we are entitled to know whether that system has been seriously undermined. We are entitled to know whether the courts and Congress have fulfilled their important constitutional roles in investigating and disclosing the misuse of Executive power.

• Our nation has engaged in the unprecedented, illegal, and immoral kidnapping, disappearance, and torture of human beings around the world (some of whom have been proven to be innocent of any wrongdoing), with no due process, in complete secrecy, and with no accountability. Even US citizens have been held in prisons indefinitely, with no legal counsel, no trial, and no charges filed against them. As Americans, we are entitled to know what has occurred in connection with these human rights abuses. In our democratic system of government, there must be full accountability.

Speaking out together, as concerned, patriotic Americans, we can send a clear message to Congress: In the United States, the rule of law must prevail, our Constitution cannot be disregarded, and the fundamental morality to which our nation has always laid claim will be restored.

Anderson asks that Americans who support the principles outlined in this letter -- as I do -- go to his Restore the Rule of Law website and sign on.

Signing this letter, says Anderson, who has opened an important dialogue about the Constitution and White House accountability with Conyers and other key players on the Judiciary Committee, "indicates to Congressman Conyers, other members of the House Judiciary Committee, and Congress as a whole that you support efforts to investigate and disclose any illegal acts and abuses of power by the President and others in his administration. Declare to the world, and to our posterity, that, as a US citizen:

• You proudly support our long-held constitutional principles.

• You are speaking out to reaffirm our democracy.

• You demand accountability for those in our government who have disregarded our Constitution, violated statutory law, or engaged in immoral human-rights abuses."

Anderson’s is an authentic patriotic response to the latest revelations about Dick Cheney’s disregard for the Constitution.

Go to the Restore the Rule of Law website and sign on and do what Cheney did not: support and defend the Constitution of the United States against all enemies, foreign and domestic.

Financial Collapse will End the Occupation: And it won't be "A time of our choosing"

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By Mike Whitney

“Come and see our overflowing morgues and find our little ones for us...
You may find them in this corner or the other, a little hand poking out, pointing out at you...
Come and search for them in the rubble of your "surgical" air raids, you may find a little leg or a little head...pleading for your attention.
Come and see them amassed in the garbage dumps, scavenging morsels of food...
Come and see, come... " "Flying Kites” Layla Anwar

The US Military has won every battle it has fought in Iraq, but it has lost the war. Wars are won politically, not militarily. Bush doesn't understand this. He still clings to the belief that a political settlement can be imposed through force. But he is mistaken. The use of overwhelming force has only spread the violence and added to the political instability. Now Iraq is ungovernable. Was that the objective? Miles of concrete blast-walls snake through Baghdad to separate the warring parties; the country is fragmented into a hundred smaller pieces each ruled by local militia commanders. These are the signs of failure not success. That's why the American people no longer support the occupation. They're just being practical; they know Bush's plan won't work. As Nir Rosen says, “Iraq has become Somalia”.

The administration still supports Iraqi President Nouri al Maliki, but al-Maliki is a meaningless figurehead who will have no effect on the country's future. He has no popular base of support and controls nothing beyond the walls of the Green Zone. The al-Maliki government is merely an Arab facade designed to convince the American people that political progress is being made, but there is no progress. Its a sham. The future is in the hands of the men with guns; they're the ones who have divided Iraq into locally-controlled fiefdoms and they are the one's who will ultimately decide who will rule the state. At present, the fighting between the factions is being described as “sectarian warfare”, but the term is intentionally misleading. The fighting is political in nature; the various militias are competing with each other to see who will fill the vacuum left by the removal of Saddam. It's a power struggle. The media likes to portray the conflict as a clash between half-crazed Arabs--"dead-enders and terrorists"---who relish the idea killing their countrymen, but that's just a way of demonizing the enemy. In truth, the violence is entirely rational; it is the inevitable reaction to the dissolution of the state and the occupation by foreign troops. Many military experts predicted that there would be outbreaks of fighting after the initial invasion, but their warnings were shrugged off by clueless politicians and the cheerleading media. Now the violence has flared up again in Basra and Baghdad, and there is no end in sight. Only one thing seems certain, Iraq's future will not be decided at the ballot box. Bush has made sure of that.

The US military does not rule Iraq nor does it have the power to control events on the ground. It's just one of many militias vieing for power in a state that is ruled by warlords. After the army conducts combat operations, it is forced to retreat to its camps and bases. This point needs to be emphasized in order to understand that there is no real future for the occupation. The US simply does not have the manpower to hold territory or to establish security. In fact, the presence of American troops incites violence because they are seen as forces of occupation, not liberators. Survey's show that the vast majority of the Iraqi people want US troops to leave. The military has destroyed too much of the country and slaughtered too many people to expect that these attitudes will change anytime soon. Iraqi poet and blogger Layla Anwar sums up the feelings of many of the war's victims in a recent post on her web site "An Arab Women's Blues":

"At the gates of Babylon the Great, you are still struggling, fighting away, chasing this or the other, detaining, bombing from above, filling up morgues, hospitals, graveyards and embassies and borders with quesesfor exit-visas.

Not one Iraqi wishes your presence. Not one Iraqi accepts your occupation.

Got news for you Motherfuckers, you will never control Iraq, not in six years, not in ten years, not in 20 years....You have brought upon yourself the hate and the curse of all Iraqis, Arabs and the rest of the world...now face your agony." (Layla Anwar; "An Arab Women's Blues: Reflections in a sealed bottle"

Is Bush hoping to change the mind of Layla or the millions of other Iraqis who have lost loved ones or been forced into exile or seen their country and culture crushed beneath the bootheel of foreign occupation? The hearts and minds campaign is lost. The US will never be welcome in Iraq.

According to a survey in the British Medical Journal "Lancet" more than a million Iraqis have been killed in the war. Another four million have been either internally-displaced or have fled the country. But the figures tell us nothing about the magnitude of the disaster that Bush has caused by attacking Iraq. The invasion is the greatest human catastrophe in the Middle East since the Nakba in 1948. Living standards have declined precipitously in every area---infant mortality, clean water, food-security, medical supplies, education, electrical power, employment etc. Even oil production is still below pre-war levels. The invasion is the most comprehensive policy failure since Vietnam; everything has gone wrong. The heart of the Arab world has descended into chaos. The suffering is incalculable.

The main problem is the occupation; it is the primary catalyst for violence and an obstacle to political settlement. As long as the occupation persists, so will the fighting. The claims that the so-called surge has changed the political landscape are greatly exaggerated. Retired Lt. General William Odom commented on this point in an interview on the Jim Lerher News Hour:

"The surge has sustained military instability and achieved nothing in political consolidation....Things are much worse now. And I don't see them getting any better. This was foreseeable a year and a half ago. And to continue to put the cozy veneer of comfortable half-truths on this is to deceive the American public and to make them think it is not the charade it is.....When you say that the Lebanization of Iraq is taking place, yes, but not because of Iran, but because the U.S. went in and made this kind of fragmentation possible. And it has occurred over the last five years....The al-Maliki government is worse off now...The notion that there;'s some kind of progress is absurd. The al-Maliki government uses its Ministry of Interior like a death squad militia. So to call Sadr an extremist and Maliki a good guy just overlooks the reality that there are no good guys." (Jim Lerher News Hour)

The war in Iraq was lost before the first shot was fired. The conflict never had the support of the American people and Iraq never posed a threat to US national security. The whole pretext for the war was based on lies; it was a coup orchestrated by elites and the media to carry out a far-right agenda. Now the mission has failed, but no one wants to admit their mistakes by withdrawing; so the butchery continues without pause.

How Will It End?

The Bush administration has decided to pursue a strategy that is unprecedented in US history. It has decided to continue to prosecute a war that has already been lost morally, strategically, and militarily. But fighting a losing war has its costs. America is much weaker now than it was when Bush first took office in 2000; politically, economically and militarily. US power and prestige around the world will continue to deteriorate until the troops are withdrawn from Iraq. But that's unlikely to happen until all other options have been exhausted. Deteriorating economic conditions in the financial markets are putting enormous downward pressure on the dollar. The corporate bond and equities markets are in disarray; the banking system is collapsing, consumer spending is down, tax revenues are falling, and the country is headed into a painful and protracted recession. The US will leave Iraq sooner than many pundits believe, but it will not be at a time of our choosing. Rather, the conflict will end when the United States no longer has the capacity to wage war. That time is not far off.

The Iraq War signals the end of US interventionism for at least a generation; maybe longer. The ideological foundation for the war (preemption/regime change) has been exposed as a baseless justification for unprovoked aggression. Someone will have to be held accountable. There will have to be international tribunals to determine who is responsible in the deaths of over one million Iraqis.

American Hegemony Is Not Guaranteed

Go to Original
By Paul Craig Roberts

Exactly as the British press predicted, last week’s congressional testimony by Gen. David Petraeus and Green Zone administrator Ryan Crocker set the propaganda stage for a Bush regime attack on Iran. On April 10 Robert H. Reid of AP News reported: “The top US commander has shifted the focus from al-Qaida to Iranian-backed ‘special groups’ as the main threat . . . The shift was articulated by Gen. Petraeus who told Congress that ‘unchecked, the special groups pose the greatest long-term threat to the viability of a democratic Iraq.’” http://wiredispatch.com/news/?id=122754

According to the neocon propaganda, the “special groups” (have you ever heard of them before?) are breakaway elements of al Sadr’s militia.

Nonsensical on its face, the Petraeus/Crocker testimony is just another mask in the macabre theatre of lies that the Bush regime has told in order to justify its wars of naked aggression against Muslims.

Fact 1: Al Sadr is not allied with Iran. He speaks with an Iraqi voice and has his militia under orders to stand down from conflict. The Badr militia is the Shi’ite militia that is allied with Iran. Why did the US and its Iraqi puppet Maliki attack al Sadr’s militia and not the Badr militia or the breakaway elements of Sadr’s militia that allegedly now operate as gangs?

Fact 2: The Shi’ite militias and the Sunni insurgents are armed with weapons available from the unsecured weapon stockpiles of Saddam Hussein’s army. If Iran were arming Iraqis, the Iraqi insurgents and militias would have armor-piercing rocket-propelled grenades and surface-to-air missiles. These two weapons would neutralize the US advantage by enabling Iraqis to destroy US helicopter gunships, aircraft and tanks. The Iraqis cannot mass their forces as they have no weapons against US air power. To destroy US tanks, Iraqis have to guess the roads US vehicles will travel and bury bombs constructed from artillery shells. The inability to directly attack armor and to defend against air attack denies offensive capability to Iraqis.

If the Iranians desired to arm Iraqis, they obviously would provide these two weapons that would change the course of the war.

Just as the Bush regime lied to Americans and the UN about why Iraq was attacked, hiding the real agenda behind false claims that Saddam Hussein had weapons of mass destruction and connections to al Qaeda, the Bush regime is now lying about why it needs to attack Iran. Could anyone possibly believe that Iran is so desirous of having its beautiful country bombed and its nuclear energy program destroyed that Iran would invite an attack by fighting a “proxy war” against the US in Iraq? http://tinyurl.com/4em9uh
That the Bush regime would tell such a blatant lie shows that the regime has no respect for the intelligence of the American public and no respect for the integrity of the US media.

And why should it? The public and media have fallen for every lie the Bush regime has told.

The moral hypocrisy of US politicians is unrivaled. McCain says that if he were president he would not attend the opening ceremony of the Beijing Olympics because China has killed and injured 100 Tibetans who protested Tibet’s occupation by China. Meanwhile the Iraqi toll of the American occupation is one million dead and four million displaced. That comes to 20% of the Iraqi population. At what point does the US occupation of Iraq graduate from a war crime to genocide?

Not to be outdone by McCain’s hypocrisy, Bush declared: “The message to the Iranians is: we will bring you to justice if you continue to try to infiltrate, send your agents or send surrogates to bring harm to our troops and/or the Iraqi citizens.”

Consider our “Christian” president’s position: It is perfectly appropriate for the US to bomb and to invade countries and to send its agents and surrogates to harm Iraqis, Afghans, Somalians, Serbians and whomever, but resistance to American aggression is the mark of terrorism, and any country that aids America’s victims is at war with America.

The three-week “cakewalk” war that would be paid for by Iraqi oil revenues is now into its sixth year. According to Nobel economist Joseph Stiglitz, the cost of the war to Americans is between three and five trillion dollars. Five trillion dollars equals the entire US personal and corporate income tax revenues for two years.

Of what benefit is this enormous expenditure to America? The price of oil and gasoline in US dollars has tripled, the price of gold has quadrupled, and the dollar has declined sharply against other currencies. The national debt has rapidly mounted. America’s reputation is in tatters.

The Bush regime’s coming attack on Iran will widen the war dramatically and escalate the costs.

Not content with war with Iran, Republican presidential candidate John McCain in a speech written for him by neocon warmonger Robert Kagan promises to confront both Russia and China.

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2008/04/11/wuspols311.xml

Three questions present themselves:

(1) Will our foreign creditors--principally China, Japan and Saudi Arabia--finance a third monstrous Bush regime war crime?

(2) Will Iran sit on its hands and wait on the American bombs to fall?

(3) Will Russia and China passively wait to be confronted by the warmonger McCain?

Should a country that is over-extended in Iraq and Afghanistan be preparing to attack yet a third country, while threatening to interfere in the affairs of two large nuclear powers? What sort of political leadership seeks to initiate conflict in so many unpromising directions?

With Iran, Russia, China, and North Korea threatened by American hegemonic belligerence, it is not difficult to imagine a scenario that would terminate all pretense of American power: For example, instead of waiting to be attacked, Iran uses its Chinese and Russian anti-ship missiles, against which the US reportedly has poor means of defense, and sinks every ship in the American carrier strike forces that have been foolishly massed in the Persian Gulf, simultaneously taking out the Saudi oil fields and the Green Zone in Baghdad, the headquarters of the US occupation. Shi’ite militias break the US supply lines from Kuwait, and Iranian troops destroy the dispersed US forces in Iraq before they can be concentrated to battle strength.

Simultaneously, North Korea crosses the demilitarized zone and takes South Korea, China seizes Taiwan and dumps a trillion dollars of US Treasury bonds on the market. Russia goes on full nuclear alert and cuts off all natural gas to Europe.

What would the Bush regime do? Wet its pants? Push the button and end the world?

If America really had dangerous enemies, surely the enemies would collude to take advantage of a dramatically over-extended delusional regime that, blinded by its own arrogance and hubris, issues gratuitous threats and lives by Mao’s doctrine that power comes out of the barrel of a gun.

There are other less dramatic scenarios. Why does the US assume that only it can initiate aggression, boycotts, freezes on financial assets of other countries and bans on foreign banks from participation in the international banking system? If the rest of the world were to tire of American aggression or to develop a moral conscience, it would be easy to organize a boycott of America and to ban US banks from participating in the international banking system. Such a boycott would be especially effective at the present time with the balance sheets of US banks impaired by subprime derivatives and the US government dependent on foreign loans in order to finance its day-to-day activities.

Sooner or later it will occur to other countries that putting up with America is a habit that they don’t need to continue.

Does America really need more political leadership that leads in such unpromising directions?

Sanctity of Contracts: Mortgages and Credit Cards

Go to Original
By Dean Baker

Momentum is building in Washington for a large-scale housing bailout. It is virtually certain something will happen. The big questions are how large will the package be and will it be designed to help homeowners or to bailout out the banks?

The latter question will be determined primarily by whether the government steps in to try to prop up bubble-inflated housing markets in places like California, Florida and the East Coast cities. While the government may be able to play a useful role in stabilizing house prices in depressed markets like Detroit, Cleveland and Atlanta, the main effect of bailouts in the bubble markets will be to reduce the banks' losses on their mortgages.

In these markets, prices must still fall 20 percent to 40 percent to get back in line with fundamentals. If the government were to guarantee new mortgages at near the current market prices, it will just be allowing the lenders to cut their losses.

Since prices will continue to fall, homeowners will not accumulate any equity and the taxpayers are likely to have to make good on the mortgage guarantees. Furthermore, homeowners will be paying far more than necessary for housing costs each year that they live in their house, draining money away from health care, child care and other necessary expenses.

There is a simple and costless alternative policy that could be applied to these bubble areas. We can temporarily change the foreclosure laws to allow moderate-income homeowners facing foreclosure the option to stay in their homes as renters paying the fair market rent.

This would guarantee homeowners some security, since they could not just be thrown out on the street. If they like the house, the neighborhood, the school for their kids, they would have the option to stay. More importantly, since the banks will not want to become landlords, this policy will give banks a real incentive to negotiate terms that allow homeowners to stay in their house as owners. It is likely this would be the more common outcome from this policy.

I have been pushing this "own to rent" plan for more than half a year. Many people from across the political spectrum have embraced the proposal as the most realistic way to help homeowners facing the loss of their home. However, there has been one widely voiced objection that seems to carry considerable weight in policy circles. This plan would interfere with the sanctity of contract since it would be changing the rules for enforcing payment on mortgages and could cause lenders to involuntarily end up as landlords.

This objection is interesting because there seemed no concern whatsoever for the sanctity of contract when Congress went in the opposite direction with the bankruptcy law reform passed in 2005. In that case, Congress established much stricter rules for bankruptcy, which made it far more difficult to use bankruptcy to discharge debt.

What makes the bankruptcy reform analogous to the own to rent proposal is Congress applied the new bankruptcy rules retroactively. In other words, people who had accumulated credit card or other debt under the old set of bankruptcy rules were suddenly subject to a new set of bankruptcy rules.

Presumably, both the banks and credit cardholders understood the bankruptcy rules that were in place when loans were issued prior to the bankruptcy reform. Banks would have charged an additional premium because debt was harder to collect under the old bankruptcy laws.

However, Congress had no qualms whatsoever about just ignoring these contracts when it decided to tighten the rules to make it easier for the banks to collect. Congress could have written the law to just apply to debts incurred after the passage of the new bankruptcy bill, but apparently this route was never even considered.

Given this recent history, it seems strange there is such great concern now about the sanctity of contract. The only obvious difference is this legislative change would benefit borrowers, while bankruptcy reform benefited lenders. Does anyone smell a double standard?

Finance Ministers Emphasize Food Crisis Over Credit Crisis

Go to Original
By Steven R. Weisman

Washington - The world's economic ministers declared on Sunday that shortages and skyrocketing prices for food posed a potentially greater threat to economic and political stability than the turmoil in capital markets.

The ministers, conferring in the shadow of a slumping American economy that threatens to pull down the economies of other countries, turned their attention to the food crisis and called on the wealthiest countries to fulfill pledges to help prevent starvation and disorder in Asia, Africa and Latin America.

"Throughout the weekend we have heard again and again from ministers in developing countries and emerging economies that this is a priority issue," said Robert B. Zoellick, president of the World Bank. "We have to put our money where our mouth is now, so that we can put food into hungry mouths. It is as stark as that."

Mr. Zoellick said that almost half of the $500 million that the World Food Program recently requested in additional pledges for food aid this year had been committed, but that the program would not meet a deadline of raising the money by May 1.

The World Food Program seeks the aid, on top of nearly $3 billion already committed, because of shortfalls in food distribution resulting from higher prices.

Dominique Strauss-Kahn, the managing director of the International Monetary Fund, said the food crisis posed questions about the survivability of democracy and political regimes.

"As we know in the past, sometimes those questions lead to war," he said. "We now need to devote 100 percent of our time to these questions."

World Bank and I.M.F. officials noted that political instability had already hit countries as disparate as Haiti, Egypt, the Philippines and Indonesia because of food shortages, forcing some countries to limit food exports.

Mr. Zoellick had earlier highlighted the food issue in speeches and presentations this weekend, saying the World Bank intended not only to help with the emergency situation but also to upgrade programs to help countries produce more food on their own. He cited Malawi, in southern Africa, as a country that has started going in that direction.

But food has also become a symbol of the conflicting pressures that frequently emerge at the semiannual gatherings of finance and development officials and central bankers that take place in Washington every spring.

Some ministers from poor countries, for example, are growing impatient with the way the West is addressing global warming by subsidizing and encouraging conversion of corn, sugar cane and other food products into substitutes for oil. The shift is helping to drive up prices, they say.

Mr. Strauss-Kahn said he had heard from many financial officials this weekend that the West's focus on fuel, at the expense of food, was a "crime against humanity." Though he noted that the I.M.F. is primarily a monetary and financial agency, he said it would try to "review its tools" to help countries pay for food imports.

In addition, many ministers meeting here appeared to be self-conscious about how much of the attention at the meeting has focused on the global credit crisis, which has caused hundreds of billions of dollars in losses for banks and investment banks, while there was less focus on the problem of feeding the world's poor.

Treasury Secretary Henry M. Paulson Jr. said on Friday that the subject of food shortages had come up at the meeting of finance ministers of the United States, Canada, Europe and Japan under the heading of the Group of Seven.

"Every country sitting around the table was focused on it," Mr. Paulson said of the Group of Seven's concern about food, adding that Mr. Zoellick "made an impassioned plea." But Treasury officials said they had no details of what aid the United States was prepared to commit.