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The Iraqi cabinet has approved a bill calling for all foreign soldiers except for American forces to pull out of the country by the end of July, a top MP said on Tuesday.
"The cabinet has approved draft legislation on the withdrawal of non-US forces in the coalition," said Hummam Hammudi, chairman of parliament's foreign affairs committee.
"It sets a timetable for a withdrawal of between five and seven months from January 1."
The bill, which has to be passed by parliament, would mainly affect the roughly 4,100 British troops deployed at Basra air base in the south of the country.
London newspapers have reported that Britain intends to begin its withdrawal in March with most troops out by June, although defence officials insist the precise timetable will depend on conditions on the ground at the time.
"We plan -- subject to the conditions on the ground and the advice of military commanders -- to reduce our force levels in Iraq as we complete our key tasks in Basra in the early months of next year," a British defence ministry spokesman said last week.
From a peak of 46,000 British soldiers in 2003, when Britain joined the invasion, just 4,100 now remain in Iraq.
After a meeting with Hammudi, British Ambassador Christopher Prentice told AFP the bill would pave the way to a new relationship between London and Baghdad.
"This law ... provides the legal base for us to complete our mission here, and to complete our support for the Iraqi armed forces and to continue essentially our training role in supporting the Iraqi forces," he said.
"This law and the subsequent arrangements to be agreed with the government will together provide the bases for moving into a new relationship with the new Iraq," said Prentice.
"We look forward to a vote in the next weeks in parliament on that law, and we hope that it will be accepted."
Up to 400 British soldiers are likely to remain to help train Iraqi forces, while equipment such as helicopters and drones will be transferred to Afghanistan.
Since the 2003 US-led invasion, 177 British troops have died in Iraq.
US soldiers, who make up 95 percent of the coalition, are to have withdrawn from Iraq by the end of 2011, under a security pact signed last month after Iraqi parliamentary approval.
Their combat troops are due to have pulled out of Iraqi cities by June.
US president-elect Barack Obama, who takes office on January 20, included in his election campaign a 16-month deadline for an accelerated withdrawal from Iraq.
The US military on Tuesday announced the departure of the multinational coalition's Albanian and Moldovan contingents, in the last such pullout before the end of 2008.
Apart from the Americans and British, Australia, Denmark, El Salvador, Estonia, Lithuania and Romania also still have troops in Iraq.
Thursday, December 18, 2008
Bush-Era Abortion Rules Face Possible Reversal
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By LAURA MECKLER
Obama Team Looks at Regulation Set to Be Finalized This Week Letting Medical Staff Refuse to Take Part in Practices They Oppose
The outgoing Bush administration this week will finalize a regulation establishing a "right of conscience" allowing medical staff to refuse to participate in any practice they object to on moral grounds, including abortion but possibly birth control and other health care as well.
In transition offices across town, officials in the incoming Obama administration have begun considering how and when to undo it.
The regulation is one of a swath of abortion and other reproductive-health issues under review by the Obama team, which is preparing to reverse a variety of Bush measures, according to officials close to the transition. The review is part of a sweeping scrutiny of Bush-era legislation and regulation on issues across the federal government, from environmental and labor rules to defense spending.
On abortion and related matters, action is expected early on executive, regulatory, budgetary and legislative fronts.
Decisions that the new administration will weigh include: whether to cut funding for sexual abstinence programs; whether to increase funding for comprehensive sex education programs that include discussion of birth control; whether to allow federal health plans to pay for abortions; and whether to overturn regulations such as one that makes fetuses eligible for health-care coverage under the Children's Health Insurance Program.
Women's health advocates are also pushing for a change in rules that would lower the cost of birth control at college health clinics.
Obama aides will have to settle many of these questions in issuing their first budget in February.
"We have a lot of work to do to fix the damage the Bush administration has done," said Nancy Keenan, president of NARAL Pro-Choice America.
As one of his first actions, Mr. Obama is likely to issue an executive order lifting President George W. Bush's restrictions on funding for research using embryonic stem cells, a move with bipartisan support.
Women's health advocates also expect early action on the "global gag rule," which bars foreign organizations from using their own money for abortion services or advocacy if they accept U.S. aid for family planning. This policy was instituted by President Ronald Reagan, immediately overturned by President Bill Clinton and then reinstated by Mr. Bush.
Mr. Obama is also expected to restore federal funding for family planning to the United Nations Population Fund soon after taking office. This policy also has gone back and forth with control of the White House, with Republicans arguing that the U.N. agency supports coercive abortions because of its work in China with its one-child policy, and Democrats saying that the agency doesn't.
Messrs. Clinton and Bush took action on those two issues in the opening days of their administrations. It isn't clear whether Mr. Obama will follow suit. He has suggested that he wants to find middle ground on abortion-related issues, and some Democrats worry about the politics of making abortion policy one of his opening moves.
As they face Democrat-controlled Washington, antiabortion activists are gearing up to fight the Freedom of Choice Act, or FOCA, which would codify Roe v. Wade into federal law. Mr. Obama said last year that he would sign the bill. Depending on how it is interpreted, the bill could overturn state laws regulating abortion, such as parental notification and mandatory waiting periods.
"Our No. 1 concern would be the FOCA bill," said Connie Mackey, senior vice president of Family Research Council Action, a conservative group that focuses on social issues. "We have to appeal directly to the American public."
The opponents of this legislation appear more eager for a debate over it than the proponents do, perhaps knowing it is a strong way to rally their supporters early in the administration.
While many abortion-rights supporters would like to see Congress pass FOCA, their advocates in Washington have concluded that there aren't enough votes in Congress and that it isn't politically smart to push such a divisive measure. A coalition of nearly 60 liberal and women's groups submitted a list of 15 requests for action in the Obama administration's first 100 days, and FOCA isn't on the list.
"We're going to be smart and strategic about our policy agenda to bring people together to make progress for women's health," said Cecile Richards, president of Planned Parenthood Federation of America. "The Freedom of Choice Act is very important...but we have a long list of things to get done that I think can address problems immediately that women are facing, that are really immediate concerns."
Among them is the "right of conscience" regulation that is expected to be published this week. It will take effect 30 days after being issued. That means that if the Bush administration issues the regulation this week, it will become final before Mr. Obama's inauguration on Jan. 20, and his administration won't be able to undo it easily.
For decades, federal law has said that doctors and nurses can't be compelled to perform abortions. The new regulation broadens that to make clear that all health-care workers may refuse to provide information, such as a referral, to patients looking for an abortion. The Department of Health and Human Services estimates the regulation would affect 584,000 hospitals, doctor's offices, pharmacies and other entities.
Advocates on both sides of the issue have interpreted the rule as also protecting workers who refuse to participate in providing birth control or other care they don't support. The rule could be blocked by Congress, or Health and Human Services could begin the laborious process of issuing a new regulation reversing course. Officials close to the transition have signaled that they intend to begin the regulatory process anew.
By LAURA MECKLER
Obama Team Looks at Regulation Set to Be Finalized This Week Letting Medical Staff Refuse to Take Part in Practices They Oppose
The outgoing Bush administration this week will finalize a regulation establishing a "right of conscience" allowing medical staff to refuse to participate in any practice they object to on moral grounds, including abortion but possibly birth control and other health care as well.
In transition offices across town, officials in the incoming Obama administration have begun considering how and when to undo it.
The regulation is one of a swath of abortion and other reproductive-health issues under review by the Obama team, which is preparing to reverse a variety of Bush measures, according to officials close to the transition. The review is part of a sweeping scrutiny of Bush-era legislation and regulation on issues across the federal government, from environmental and labor rules to defense spending.
On abortion and related matters, action is expected early on executive, regulatory, budgetary and legislative fronts.
Decisions that the new administration will weigh include: whether to cut funding for sexual abstinence programs; whether to increase funding for comprehensive sex education programs that include discussion of birth control; whether to allow federal health plans to pay for abortions; and whether to overturn regulations such as one that makes fetuses eligible for health-care coverage under the Children's Health Insurance Program.
Women's health advocates are also pushing for a change in rules that would lower the cost of birth control at college health clinics.
Obama aides will have to settle many of these questions in issuing their first budget in February.
"We have a lot of work to do to fix the damage the Bush administration has done," said Nancy Keenan, president of NARAL Pro-Choice America.
As one of his first actions, Mr. Obama is likely to issue an executive order lifting President George W. Bush's restrictions on funding for research using embryonic stem cells, a move with bipartisan support.
Women's health advocates also expect early action on the "global gag rule," which bars foreign organizations from using their own money for abortion services or advocacy if they accept U.S. aid for family planning. This policy was instituted by President Ronald Reagan, immediately overturned by President Bill Clinton and then reinstated by Mr. Bush.
Mr. Obama is also expected to restore federal funding for family planning to the United Nations Population Fund soon after taking office. This policy also has gone back and forth with control of the White House, with Republicans arguing that the U.N. agency supports coercive abortions because of its work in China with its one-child policy, and Democrats saying that the agency doesn't.
Messrs. Clinton and Bush took action on those two issues in the opening days of their administrations. It isn't clear whether Mr. Obama will follow suit. He has suggested that he wants to find middle ground on abortion-related issues, and some Democrats worry about the politics of making abortion policy one of his opening moves.
As they face Democrat-controlled Washington, antiabortion activists are gearing up to fight the Freedom of Choice Act, or FOCA, which would codify Roe v. Wade into federal law. Mr. Obama said last year that he would sign the bill. Depending on how it is interpreted, the bill could overturn state laws regulating abortion, such as parental notification and mandatory waiting periods.
"Our No. 1 concern would be the FOCA bill," said Connie Mackey, senior vice president of Family Research Council Action, a conservative group that focuses on social issues. "We have to appeal directly to the American public."
The opponents of this legislation appear more eager for a debate over it than the proponents do, perhaps knowing it is a strong way to rally their supporters early in the administration.
While many abortion-rights supporters would like to see Congress pass FOCA, their advocates in Washington have concluded that there aren't enough votes in Congress and that it isn't politically smart to push such a divisive measure. A coalition of nearly 60 liberal and women's groups submitted a list of 15 requests for action in the Obama administration's first 100 days, and FOCA isn't on the list.
"We're going to be smart and strategic about our policy agenda to bring people together to make progress for women's health," said Cecile Richards, president of Planned Parenthood Federation of America. "The Freedom of Choice Act is very important...but we have a long list of things to get done that I think can address problems immediately that women are facing, that are really immediate concerns."
Among them is the "right of conscience" regulation that is expected to be published this week. It will take effect 30 days after being issued. That means that if the Bush administration issues the regulation this week, it will become final before Mr. Obama's inauguration on Jan. 20, and his administration won't be able to undo it easily.
For decades, federal law has said that doctors and nurses can't be compelled to perform abortions. The new regulation broadens that to make clear that all health-care workers may refuse to provide information, such as a referral, to patients looking for an abortion. The Department of Health and Human Services estimates the regulation would affect 584,000 hospitals, doctor's offices, pharmacies and other entities.
Advocates on both sides of the issue have interpreted the rule as also protecting workers who refuse to participate in providing birth control or other care they don't support. The rule could be blocked by Congress, or Health and Human Services could begin the laborious process of issuing a new regulation reversing course. Officials close to the transition have signaled that they intend to begin the regulatory process anew.
Stand Up Against Bush's Giveaway of America's Redrock Wilderness
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By Robert Redford
You can't put a price on silence or solitude. You can't quantify the beauty of wilderness. And yet that's not going to stop the Bush administration from trying to sell off what should be the birthright of future generations.
In three days, this Friday, 110,000 acres of majestic Utah wild lands go on the auction block, to be sold to the highest bidders in the oil and gas industry. It's a last-ditch effort by a corrupt administration to further enrich its friends in the dirty fuels business. If they succeed, they'll leave a wasteland behind them.
Never mind that we the People of the United States just rejected the failed energy policy of "drill, baby, drill!" Never mind that once industrialized, these precious lands will be marred for centuries. Ravaging these places will put cash in the pockets of greedy speculators, even if it won't solve our energy problems.
The miraculous thing about America though, is that we the People have options. And one of those options is to take a corrupt and foolish administration to court.
This morning I stood with my friends at the Natural Resources Defense Council (NRDC) and Rep. Brian Baird (D-WA) to announce an emergency lawsuit aimed at stopping this wanton destruction of Utah wilderness. Sharon Buccino, the head of NRDC's lands program, has been fighting the Bush administration for eight years, holding the line against an industrial juggernaut. She says it's illegal under federal law for the Bureau of Land Management to just snap its fingers and sell off national treasures. In its rush, BLM just ignored the rules.
Sharon's case will be among the last lawsuits NRDC ever files against the Bush administration. Most of those lawsuits have been successful. I don't know the odds on this one, but my fingers are crossed. It could be our last chance to protect these irreplaceable lands.
Bush may be a lame duck president, but he can still quack.
By Robert Redford
You can't put a price on silence or solitude. You can't quantify the beauty of wilderness. And yet that's not going to stop the Bush administration from trying to sell off what should be the birthright of future generations.
In three days, this Friday, 110,000 acres of majestic Utah wild lands go on the auction block, to be sold to the highest bidders in the oil and gas industry. It's a last-ditch effort by a corrupt administration to further enrich its friends in the dirty fuels business. If they succeed, they'll leave a wasteland behind them.
Never mind that we the People of the United States just rejected the failed energy policy of "drill, baby, drill!" Never mind that once industrialized, these precious lands will be marred for centuries. Ravaging these places will put cash in the pockets of greedy speculators, even if it won't solve our energy problems.
The miraculous thing about America though, is that we the People have options. And one of those options is to take a corrupt and foolish administration to court.
This morning I stood with my friends at the Natural Resources Defense Council (NRDC) and Rep. Brian Baird (D-WA) to announce an emergency lawsuit aimed at stopping this wanton destruction of Utah wilderness. Sharon Buccino, the head of NRDC's lands program, has been fighting the Bush administration for eight years, holding the line against an industrial juggernaut. She says it's illegal under federal law for the Bureau of Land Management to just snap its fingers and sell off national treasures. In its rush, BLM just ignored the rules.
Sharon's case will be among the last lawsuits NRDC ever files against the Bush administration. Most of those lawsuits have been successful. I don't know the odds on this one, but my fingers are crossed. It could be our last chance to protect these irreplaceable lands.
Bush may be a lame duck president, but he can still quack.
Cheney was key in clearing CIA interrogation tactics
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By Greg Miller
The vice president says that the use of waterboarding was appropriate and that the prison at Guantanamo Bay, Cuba, should stay open until 'the end of the war on terror.
Vice President Dick Cheney said Monday that he was directly involved in approving severe interrogation methods used by the CIA, and that the prison at Guantanamo Bay, Cuba, should remain open indefinitely.
Cheney's remarks on Guantanamo appear to put him at odds with President Bush, who has expressed a desire to close the prison, although the decision is expected to be left to the incoming administration of President-elect Barack Obama.
Cheney's comments also mark the first time that he has acknowledged playing a central role in clearing the CIA's use of an array of controversial interrogation tactics, including a simulated drowning method known as waterboarding.
"I was aware of the program, certainly, and involved in helping get the process cleared," Cheney said in an interview with ABC News.
Asked whether he still believes it was appropriate to use the waterboarding method on terrorism suspects, Cheney said: "I do."
His comments come on the heels of disclosures by a Senate committee showing that high-level officials in the Bush administration were intimately involved in reviewing and approving interrogation methods that have since been explicitly outlawed and that have been condemned internationally as torture.
Soon after the Sept. 11 attacks, Cheney said, the CIA "in effect came in and wanted to know what they could and couldn't do. And they talked to me, as well as others, to explain what they wanted to do. And I supported it."
Waterboarding involves strapping a prisoner to a tilted surface, covering his face with a towel and dousing it to simulate the sensation of drowning.
CIA Director Michael V. Hayden has said that the agency used the technique on three Al Qaeda suspects in 2002 and 2003. But the practice was discontinued when lawyers from the Department of Justice and other agencies began backing away from their opinions endorsing its legality.
Cheney has long defended the technique. But he has not previously disclosed his role in pushing to give the CIA such authority.
Cheney's office is regarded as the most hawkish presence in the Bush administration, pushing the White House toward aggressive stances on the invasion of Iraq and the wiretapping of U.S. citizens.
Asked when the Guantanamo Bay prison would be shut down, Cheney said, "I think that that would come with the end of the war on terror." He went on to say that "nobody can specify" when that might occur, and likened the use of the detention facility to the imprisonment of Germans during World War II.
"We've always exercised the right to capture the enemy and hold them till the end of the conflict," Cheney said.
The administration's legal case for holding detainees indefinitely has been eroded by a series of court rulings. Obama has pledged to close the facility, which still holds 250 prisoners.
Cheney's remarks are the latest in a series of interviews granted by Bush and senior officials defending their decisions as they prepare to leave office. Bush recently said his main regret was that U.S. spy agencies had been so mistaken about Iraq's alleged weapons programs. Cheney and the Bush administration have been accused of "cherry-picking" intelligence to support going to war with Iraq.
Cheney said that those mistakes didn't matter, and that the U.S. invasion was justified by Iraqi dictator Saddam Hussein's ability to reestablish destructive weapons programs. The vice president brushed off a series of findings questioning that view, including a 2006 Senate report concluding that Hussein lacked a "coherent effort" to develop nuclear weapons and had only a "limited capability" for chemical weapons.
"This was a bad actor and the country's better off, the world's better off, with Saddam gone, and I think we made the right decision in spite of the fact that the original [intelligence] was off in some of its major judgments," he said.
By Greg Miller
The vice president says that the use of waterboarding was appropriate and that the prison at Guantanamo Bay, Cuba, should stay open until 'the end of the war on terror.
Vice President Dick Cheney said Monday that he was directly involved in approving severe interrogation methods used by the CIA, and that the prison at Guantanamo Bay, Cuba, should remain open indefinitely.
Cheney's remarks on Guantanamo appear to put him at odds with President Bush, who has expressed a desire to close the prison, although the decision is expected to be left to the incoming administration of President-elect Barack Obama.
Cheney's comments also mark the first time that he has acknowledged playing a central role in clearing the CIA's use of an array of controversial interrogation tactics, including a simulated drowning method known as waterboarding.
"I was aware of the program, certainly, and involved in helping get the process cleared," Cheney said in an interview with ABC News.
Asked whether he still believes it was appropriate to use the waterboarding method on terrorism suspects, Cheney said: "I do."
His comments come on the heels of disclosures by a Senate committee showing that high-level officials in the Bush administration were intimately involved in reviewing and approving interrogation methods that have since been explicitly outlawed and that have been condemned internationally as torture.
Soon after the Sept. 11 attacks, Cheney said, the CIA "in effect came in and wanted to know what they could and couldn't do. And they talked to me, as well as others, to explain what they wanted to do. And I supported it."
Waterboarding involves strapping a prisoner to a tilted surface, covering his face with a towel and dousing it to simulate the sensation of drowning.
CIA Director Michael V. Hayden has said that the agency used the technique on three Al Qaeda suspects in 2002 and 2003. But the practice was discontinued when lawyers from the Department of Justice and other agencies began backing away from their opinions endorsing its legality.
Cheney has long defended the technique. But he has not previously disclosed his role in pushing to give the CIA such authority.
Cheney's office is regarded as the most hawkish presence in the Bush administration, pushing the White House toward aggressive stances on the invasion of Iraq and the wiretapping of U.S. citizens.
Asked when the Guantanamo Bay prison would be shut down, Cheney said, "I think that that would come with the end of the war on terror." He went on to say that "nobody can specify" when that might occur, and likened the use of the detention facility to the imprisonment of Germans during World War II.
"We've always exercised the right to capture the enemy and hold them till the end of the conflict," Cheney said.
The administration's legal case for holding detainees indefinitely has been eroded by a series of court rulings. Obama has pledged to close the facility, which still holds 250 prisoners.
Cheney's remarks are the latest in a series of interviews granted by Bush and senior officials defending their decisions as they prepare to leave office. Bush recently said his main regret was that U.S. spy agencies had been so mistaken about Iraq's alleged weapons programs. Cheney and the Bush administration have been accused of "cherry-picking" intelligence to support going to war with Iraq.
Cheney said that those mistakes didn't matter, and that the U.S. invasion was justified by Iraqi dictator Saddam Hussein's ability to reestablish destructive weapons programs. The vice president brushed off a series of findings questioning that view, including a 2006 Senate report concluding that Hussein lacked a "coherent effort" to develop nuclear weapons and had only a "limited capability" for chemical weapons.
"This was a bad actor and the country's better off, the world's better off, with Saddam gone, and I think we made the right decision in spite of the fact that the original [intelligence] was off in some of its major judgments," he said.
The Best and the Brightest Led America Off a Cliff
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By Chris Hedges
The multiple failures that beset the country, from our mismanaged economy to our shredded constitutional rights to our lack of universal health care to our imperial debacles in the Middle East, can be laid at the feet of our elite universities. Harvard, Yale, Princeton and Stanford, along with most other elite schools, do a poor job educating students to think. They focus instead, through the filter of standardized tests, enrichment activities, advanced placement classes, high-priced tutors, swanky private schools and blind deference to all authority, on creating hordes of competent systems managers. The collapse of the country runs in a direct line from the manicured quadrangles and halls in places like Cambridge, Princeton and New Haven to the financial and political centers of power.
The nation’s elite universities disdain honest intellectual inquiry, which is by its nature distrustful of authority, fiercely independent and often subversive. They organize learning around minutely specialized disciplines, narrow answers and rigid structures that are designed to produce certain answers. The established corporate hierarchies these institutions service—economic, political and social—come with clear parameters, such as the primacy of an unfettered free market, and with a highly specialized vocabulary. This vocabulary, a sign of the “specialist” and of course the elitist, thwarts universal understanding. It keeps the uninitiated from asking unpleasant questions. It destroys the search for the common good. It dices disciplines, faculty, students and finally experts into tiny, specialized fragments. It allows students and faculty to retreat into these self-imposed fiefdoms and neglect the most pressing moral, political and cultural questions. Those who defy the system—people like Ralph Nader—are branded as irrational and irrelevant. These elite universities have banished self-criticism. They refuse to question a self-justifying system. Organization, technology, self-advancement and information systems are the only things that matter.
“Political silence, total silence,” said Chris Hebdon, a Berkeley undergraduate. He went on to describe how various student groups gather at Sproul Plaza, the center of student activity at the University of California, Berkeley. These groups set up tables to recruit and inform other students, a practice know as “tabling.”
“Students table for Darfur, no one tables for Iraq. Tables on Sproul Plaza are ethnically fragmented, explicitly pre-professional (The Asian American Pre-Law or Business or Pre-Medicine Association). Never have I seen a table on globalization or corporatization. Students are as distracted and specialized and atomized as most of their professors. It’s vertical integration gone cultural. And never, never is it cutting-edge. Berkeley loves the slogan ‘excellence through diversity,’ which is a farce of course if one checks our admissions stats (most years we have only one or two entering Native Americans), but few recognize multiculturalism’s silent partner—fragmentation into little markets. Our Sproul Plaza shows that so well—the same place Mario Savio once stood on top a police car is filled with tens of tables for the pre-corporate, the ethnic, the useless cynics, the recreational groups, etc.”
I sat a few months ago with a former classmate from Harvard Divinity School who is now a theology professor. When I asked her what she was teaching, she unleashed a torrent of obscure academic code words. I did not understand, even with three years of seminary, what she was talking about. You can see this absurd retreat into specialized, impenetrable verbal enclaves in every graduate department across the country. The more these universities churn out these stunted men and women, the more we are flooded with a peculiar breed of specialist. This specialist blindly services tiny parts of a corporate power structure he or she has never been taught to question and looks down on the rest of us with thinly veiled contempt.
I was sent to boarding school on a scholarship at the age of 10. By the time I had finished eight years in New England prep schools and another eight at Colgate and Harvard, I had a pretty good understanding of the game. I have also taught at Columbia, New York University and Princeton. These institutions, no matter how mediocre you are, feed students with the comforting self-delusion that they are there because they are not only the best but they deserve the best. You can see this attitude on display in every word uttered by George W. Bush. Here is a man with severely limited intellectual capacity and no moral core. He, along with “Scooter” Libby, who attended my boarding school and went on to Yale, is an example of the legions of self-centered mediocrities churned out by places like Andover, Yale and Harvard. Bush was, like the rest of his caste, propelled forward by his money and his connections. That is the real purpose of these well-endowed schools—to perpetuate their own.
“There’s a certain kind of student at these schools who falls in love with the mystique and prestige of his own education,” said Elyse Graham, whom I taught at Princeton and who is now doing graduate work at Yale. “This is the guy who treats his time at Princeton as a scavenger hunt for Princetoniana and Princeton nostalgia: How many famous professors can I collect? And so on. And he comes away not only with all these props for his sense of being elect, but also with the smoothness that seems to indicate wide learning; college socializes you, so you learn to present even trite ideas well.”
These institutions cater to their students like high-end resorts. My prep school—remember this is a high school—recently built a $26-million gym. Not that it didn’t have a gym. It had a fine one with an Olympic pool. But it needed to upgrade its facilities to compete for the elite boys and girls being wooed by other schools. While public schools crumble, while public universities are slashed and degraded, while these elite institutions become unaffordable even for the middle class, the privileged retreat further into their opulent gated communities. Harvard lost $8 billion of its endowment over the past four months, which raises the question of how smart these people are, but it still has $30 billion. Schools like Yale, Stanford and Princeton are not far behind. Those on the inside are told they are there because they are better than others. Most believe it.
The people I loved most, my working-class family in Maine, did not go to college. They were plumbers, post office clerks and mill workers. Most of the men were military veterans. They lived frugal and hard lives. They were indulgent of my incessant book reading and incompetence with tools, even my distaste for deer hunting, and they were a steady reminder that just because I had been blessed with an opportunity that was denied to them, I was not better or more intelligent. If you are poor you have to work after high school or, in the case of my grandfather, before you are able to finish high school. College is not an option. No one takes care of you. You have to do that for yourself. This is the most important difference between them and the elites.
The elite schools, which trumpet their diversity, base this diversity on race and ethnicity, rarely on class. The admissions process, as well as the staggering tuition costs, precludes most of the poor and working class. When my son got his SAT scores back last year, we were surprised to find that his critical reading score was lower than his math score. He dislikes math. He is an avid and perceptive reader. And so we did what many educated, middle-class families do. We hired an expensive tutor from The Princeton Review who taught him the tricks and techniques of taking standardized tests. The tutor told him things like “stop thinking about whether the passage is true. You are wasting test time thinking about the ideas. Just spit back what they tell you.” His reading score went up 130 points. Was he smarter? Was he a better reader? Did he become more intelligent? Is reading and answering multiple-choice questions while someone holds a stopwatch over you even an effective measure of intelligence? What about those families that do not have a few thousand dollars to hire a tutor? What chance do they have?
These universities, because of their incessant reliance on standardized tests and the demand for perfect grades, fill their classrooms with large numbers of drones. I have taught gifted and engaged students who used these institutions to expand the life of the mind, who asked the big questions and who cherished what these schools had to offer. But they were always a marginalized and dispirited minority. The bulk of their classmates, most of whom headed off to Wall Street or corporate firms when they graduated, starting at $120,000 a year, did prodigious amounts of work and faithfully regurgitated information. They received perfect grades in both tedious, boring classes and stimulating ones, not that they could tell the difference. They may have known the plot and salient details of Joseph Conrad’s “Heart of Darkness,” but they were unable to tell you why the story was important. Their professors, fearful of being branded political and not wanting to upset the legions of wealthy donors and administrative overlords who rule such institutions, did not draw the obvious parallels with Iraq and American empire. They did not use Conrad’s story, as it was meant to be used, to examine our own imperial darkness. And so, even in the anemic world of liberal arts, what is taught exists in a moral void.
“The existence of multiple forms of intelligence has become a commonplace, but however much elite universities like to sprinkle their incoming classes with a few actors or violinists, they select for and develop one form of intelligence: the analytic,” William Deresiewicz, who taught English at Yale, wrote in “The American Scholar.” “While this is broadly true of all universities, elite schools, precisely because their students (and faculty, and administrators) possess this one form of intelligence to such a high degree, are more apt to ignore the value of others. One naturally prizes what one most possesses and what most makes for one’s advantages. But social intelligence and emotional intelligence and creative ability, to name just three other forms, are not distributed preferentially among the educational elite.”
Intelligence is morally neutral. It is no more virtuous than athletic prowess. It can be used to further the rape of the working class by corporations and the mechanisms of repression and war, or it can be used to fight these forces. But if you determine worth by wealth, as these institutions invariably do, then fighting the system is inherently devalued. The unstated ethic of these elite institutions is to make as much money as you can to sustain the elitist system. College presidents are not voices for the common good and the protection of intellectual integrity, but obsequious fundraisers. They shower honorary degrees and trusteeships on hedge fund managers and Wall Street titans whose lives are usually examples of moral squalor and unchecked greed. The message to the students is clear. But grabbing what you can, as John Ruskin said, isn’t any less wicked when you grab it with the power of your brains than with the power of your fists.
Most of these students are afraid to take risks. They cower before authority. They have been taught from a young age by zealous parents, schools and institutional authorities what constitutes failure and success. They are socialized to obey. They obsess over grades and seek to please professors, even if what their professors teach is fatuous. The point is to get ahead. Challenging authority is not a career advancer. Freshmen arrive on elite campuses and begin to network their way into the elite eating clubs, test into the elite academic programs and lobby for elite summer internships. By the time they graduate they are superbly conditioned to work 10 or 12 hours a day electronically moving large sums of money around.
“The system forgot to teach them, along the way to the prestige admissions and the lucrative jobs, that the most important achievements can’t be measured by a letter or a number or a name,” Deresiewicz wrote. “It forgot that the true purpose of education is to make minds, not careers.”
“Only a small minority have seen their education as part of a larger intellectual journey, have approached the work of the mind with a pilgrim soul,” he went on. “These few have tended to feel like freaks, not least because they get so little support from the university itself. Places like Yale, as one of them put it to me, are not conducive to searchers. Places like Yale are simply not set up to help students ask the big questions. I don’t think there ever was a golden age of intellectualism in the American university, but in the 19th century students might at least have had a chance to hear such questions raised in chapel or in the literary societies and debating clubs that flourished on campus.”
Barack Obama is a product of this elitist system. So are his degree-laden Cabinet members. They come out of Harvard, Yale, Wellesley and Princeton. Their friends and classmates made huge fortunes on Wall Street and in powerful law firms. They go to the same class reunions. They belong to the same clubs. They speak the same easy language of privilege and comfort and entitlement. They are endowed with an unbridled self-confidence and blind belief in a decaying political and financial system that has nurtured and empowered them.
These elites, and the corporate system they serve, have ruined the country. These elite cannot solve our problems. They have been trained to find “solutions,” such as the trillion-dollar bailout of banks and financial firms, that sustain the system. They will feed the beast until it dies. Don’t expect them to save us. They don’t know how. And when it all collapses, when our rotten financial system with its trillions in worthless assets implodes and our imperial wars end in humiliation and defeat, they will be exposed as being as helpless, and as stupid, as the rest of us.
By Chris Hedges
The multiple failures that beset the country, from our mismanaged economy to our shredded constitutional rights to our lack of universal health care to our imperial debacles in the Middle East, can be laid at the feet of our elite universities. Harvard, Yale, Princeton and Stanford, along with most other elite schools, do a poor job educating students to think. They focus instead, through the filter of standardized tests, enrichment activities, advanced placement classes, high-priced tutors, swanky private schools and blind deference to all authority, on creating hordes of competent systems managers. The collapse of the country runs in a direct line from the manicured quadrangles and halls in places like Cambridge, Princeton and New Haven to the financial and political centers of power.
The nation’s elite universities disdain honest intellectual inquiry, which is by its nature distrustful of authority, fiercely independent and often subversive. They organize learning around minutely specialized disciplines, narrow answers and rigid structures that are designed to produce certain answers. The established corporate hierarchies these institutions service—economic, political and social—come with clear parameters, such as the primacy of an unfettered free market, and with a highly specialized vocabulary. This vocabulary, a sign of the “specialist” and of course the elitist, thwarts universal understanding. It keeps the uninitiated from asking unpleasant questions. It destroys the search for the common good. It dices disciplines, faculty, students and finally experts into tiny, specialized fragments. It allows students and faculty to retreat into these self-imposed fiefdoms and neglect the most pressing moral, political and cultural questions. Those who defy the system—people like Ralph Nader—are branded as irrational and irrelevant. These elite universities have banished self-criticism. They refuse to question a self-justifying system. Organization, technology, self-advancement and information systems are the only things that matter.
“Political silence, total silence,” said Chris Hebdon, a Berkeley undergraduate. He went on to describe how various student groups gather at Sproul Plaza, the center of student activity at the University of California, Berkeley. These groups set up tables to recruit and inform other students, a practice know as “tabling.”
“Students table for Darfur, no one tables for Iraq. Tables on Sproul Plaza are ethnically fragmented, explicitly pre-professional (The Asian American Pre-Law or Business or Pre-Medicine Association). Never have I seen a table on globalization or corporatization. Students are as distracted and specialized and atomized as most of their professors. It’s vertical integration gone cultural. And never, never is it cutting-edge. Berkeley loves the slogan ‘excellence through diversity,’ which is a farce of course if one checks our admissions stats (most years we have only one or two entering Native Americans), but few recognize multiculturalism’s silent partner—fragmentation into little markets. Our Sproul Plaza shows that so well—the same place Mario Savio once stood on top a police car is filled with tens of tables for the pre-corporate, the ethnic, the useless cynics, the recreational groups, etc.”
I sat a few months ago with a former classmate from Harvard Divinity School who is now a theology professor. When I asked her what she was teaching, she unleashed a torrent of obscure academic code words. I did not understand, even with three years of seminary, what she was talking about. You can see this absurd retreat into specialized, impenetrable verbal enclaves in every graduate department across the country. The more these universities churn out these stunted men and women, the more we are flooded with a peculiar breed of specialist. This specialist blindly services tiny parts of a corporate power structure he or she has never been taught to question and looks down on the rest of us with thinly veiled contempt.
I was sent to boarding school on a scholarship at the age of 10. By the time I had finished eight years in New England prep schools and another eight at Colgate and Harvard, I had a pretty good understanding of the game. I have also taught at Columbia, New York University and Princeton. These institutions, no matter how mediocre you are, feed students with the comforting self-delusion that they are there because they are not only the best but they deserve the best. You can see this attitude on display in every word uttered by George W. Bush. Here is a man with severely limited intellectual capacity and no moral core. He, along with “Scooter” Libby, who attended my boarding school and went on to Yale, is an example of the legions of self-centered mediocrities churned out by places like Andover, Yale and Harvard. Bush was, like the rest of his caste, propelled forward by his money and his connections. That is the real purpose of these well-endowed schools—to perpetuate their own.
“There’s a certain kind of student at these schools who falls in love with the mystique and prestige of his own education,” said Elyse Graham, whom I taught at Princeton and who is now doing graduate work at Yale. “This is the guy who treats his time at Princeton as a scavenger hunt for Princetoniana and Princeton nostalgia: How many famous professors can I collect? And so on. And he comes away not only with all these props for his sense of being elect, but also with the smoothness that seems to indicate wide learning; college socializes you, so you learn to present even trite ideas well.”
These institutions cater to their students like high-end resorts. My prep school—remember this is a high school—recently built a $26-million gym. Not that it didn’t have a gym. It had a fine one with an Olympic pool. But it needed to upgrade its facilities to compete for the elite boys and girls being wooed by other schools. While public schools crumble, while public universities are slashed and degraded, while these elite institutions become unaffordable even for the middle class, the privileged retreat further into their opulent gated communities. Harvard lost $8 billion of its endowment over the past four months, which raises the question of how smart these people are, but it still has $30 billion. Schools like Yale, Stanford and Princeton are not far behind. Those on the inside are told they are there because they are better than others. Most believe it.
The people I loved most, my working-class family in Maine, did not go to college. They were plumbers, post office clerks and mill workers. Most of the men were military veterans. They lived frugal and hard lives. They were indulgent of my incessant book reading and incompetence with tools, even my distaste for deer hunting, and they were a steady reminder that just because I had been blessed with an opportunity that was denied to them, I was not better or more intelligent. If you are poor you have to work after high school or, in the case of my grandfather, before you are able to finish high school. College is not an option. No one takes care of you. You have to do that for yourself. This is the most important difference between them and the elites.
The elite schools, which trumpet their diversity, base this diversity on race and ethnicity, rarely on class. The admissions process, as well as the staggering tuition costs, precludes most of the poor and working class. When my son got his SAT scores back last year, we were surprised to find that his critical reading score was lower than his math score. He dislikes math. He is an avid and perceptive reader. And so we did what many educated, middle-class families do. We hired an expensive tutor from The Princeton Review who taught him the tricks and techniques of taking standardized tests. The tutor told him things like “stop thinking about whether the passage is true. You are wasting test time thinking about the ideas. Just spit back what they tell you.” His reading score went up 130 points. Was he smarter? Was he a better reader? Did he become more intelligent? Is reading and answering multiple-choice questions while someone holds a stopwatch over you even an effective measure of intelligence? What about those families that do not have a few thousand dollars to hire a tutor? What chance do they have?
These universities, because of their incessant reliance on standardized tests and the demand for perfect grades, fill their classrooms with large numbers of drones. I have taught gifted and engaged students who used these institutions to expand the life of the mind, who asked the big questions and who cherished what these schools had to offer. But they were always a marginalized and dispirited minority. The bulk of their classmates, most of whom headed off to Wall Street or corporate firms when they graduated, starting at $120,000 a year, did prodigious amounts of work and faithfully regurgitated information. They received perfect grades in both tedious, boring classes and stimulating ones, not that they could tell the difference. They may have known the plot and salient details of Joseph Conrad’s “Heart of Darkness,” but they were unable to tell you why the story was important. Their professors, fearful of being branded political and not wanting to upset the legions of wealthy donors and administrative overlords who rule such institutions, did not draw the obvious parallels with Iraq and American empire. They did not use Conrad’s story, as it was meant to be used, to examine our own imperial darkness. And so, even in the anemic world of liberal arts, what is taught exists in a moral void.
“The existence of multiple forms of intelligence has become a commonplace, but however much elite universities like to sprinkle their incoming classes with a few actors or violinists, they select for and develop one form of intelligence: the analytic,” William Deresiewicz, who taught English at Yale, wrote in “The American Scholar.” “While this is broadly true of all universities, elite schools, precisely because their students (and faculty, and administrators) possess this one form of intelligence to such a high degree, are more apt to ignore the value of others. One naturally prizes what one most possesses and what most makes for one’s advantages. But social intelligence and emotional intelligence and creative ability, to name just three other forms, are not distributed preferentially among the educational elite.”
Intelligence is morally neutral. It is no more virtuous than athletic prowess. It can be used to further the rape of the working class by corporations and the mechanisms of repression and war, or it can be used to fight these forces. But if you determine worth by wealth, as these institutions invariably do, then fighting the system is inherently devalued. The unstated ethic of these elite institutions is to make as much money as you can to sustain the elitist system. College presidents are not voices for the common good and the protection of intellectual integrity, but obsequious fundraisers. They shower honorary degrees and trusteeships on hedge fund managers and Wall Street titans whose lives are usually examples of moral squalor and unchecked greed. The message to the students is clear. But grabbing what you can, as John Ruskin said, isn’t any less wicked when you grab it with the power of your brains than with the power of your fists.
Most of these students are afraid to take risks. They cower before authority. They have been taught from a young age by zealous parents, schools and institutional authorities what constitutes failure and success. They are socialized to obey. They obsess over grades and seek to please professors, even if what their professors teach is fatuous. The point is to get ahead. Challenging authority is not a career advancer. Freshmen arrive on elite campuses and begin to network their way into the elite eating clubs, test into the elite academic programs and lobby for elite summer internships. By the time they graduate they are superbly conditioned to work 10 or 12 hours a day electronically moving large sums of money around.
“The system forgot to teach them, along the way to the prestige admissions and the lucrative jobs, that the most important achievements can’t be measured by a letter or a number or a name,” Deresiewicz wrote. “It forgot that the true purpose of education is to make minds, not careers.”
“Only a small minority have seen their education as part of a larger intellectual journey, have approached the work of the mind with a pilgrim soul,” he went on. “These few have tended to feel like freaks, not least because they get so little support from the university itself. Places like Yale, as one of them put it to me, are not conducive to searchers. Places like Yale are simply not set up to help students ask the big questions. I don’t think there ever was a golden age of intellectualism in the American university, but in the 19th century students might at least have had a chance to hear such questions raised in chapel or in the literary societies and debating clubs that flourished on campus.”
Barack Obama is a product of this elitist system. So are his degree-laden Cabinet members. They come out of Harvard, Yale, Wellesley and Princeton. Their friends and classmates made huge fortunes on Wall Street and in powerful law firms. They go to the same class reunions. They belong to the same clubs. They speak the same easy language of privilege and comfort and entitlement. They are endowed with an unbridled self-confidence and blind belief in a decaying political and financial system that has nurtured and empowered them.
These elites, and the corporate system they serve, have ruined the country. These elite cannot solve our problems. They have been trained to find “solutions,” such as the trillion-dollar bailout of banks and financial firms, that sustain the system. They will feed the beast until it dies. Don’t expect them to save us. They don’t know how. And when it all collapses, when our rotten financial system with its trillions in worthless assets implodes and our imperial wars end in humiliation and defeat, they will be exposed as being as helpless, and as stupid, as the rest of us.
The American-Made Insurgency in Afghanistan
Go to Original
By Chris Floyd
A Million McVeighs Now
The "Good War" in Afghanistan – the Bush-launched war that Barack Obama tells us we must fight and win – continues to deteriorate before our eyes. Just like every other operation in the so-called "War on Terror" (another Bush-launched campaign that Obama has fully embraced as his own), the Afghan war, now in its seventh year, has proven entirely counter-productive to its stated aims. Instead of stabilizing a volatile region and denying it as a base for violent extremism, it has of course done the opposite. The shock waves of the heavy-handed American-led invasion of Afghanistan – a country that no foreign power has ever conquered and held – have spread across Central Asia, most dangerously into Pakistan.
Afghanistan itself is in a desperate condition, laden with a weak, foreign-installed government dominated by warlords and riddled with corruption. The illegal opium trade, quashed by the Taliban, has now surged to historic levels, and is flooding the streets of Europe and the West with cut-rate heroin – not to mention fuelling an astonishing rise in drug addiction among Afghans, Pakistanis and Iranians. At every turn, the iron hand of American militarism is producing more suffering, more chaos, more corruption, more extremism, more slaughter, both directly and as blowback from people maddened into wanton violence by the relentless stream of atrocities.
And no, to comprehend an origin of violence is not to condone it; but reality compels acknowledgement of the fact that state-terror atrocity breeds "asymmetrical" atrocity in turn. It also teaches by example. The state militarists of empire say: Violence works. Violence is honorable. Violence is the most effective way to accomplish your goals. And you must not blench at killing innocent people in your violent operations. Is it any wonder that others adopt these methods, which are championed and celebrated by our most respected and legitimatized elites? Recall the words of one of America's own home-grown "asymmetricals," Timothy McVeigh, who at his sentencing for the Oklahoma City bombing quoted Justice Louis Brandeis: "Our Government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example."
McVeigh of course was schooled in death and violence as a soldier in the first Iraq War, where he had been appalled to find himself killing people who wished America no harm, and to see the wholesale slaughter of innocent people in a conflict that need never have been fought. A peaceful settlement of the complex financial and territorial dispute between Iraq and Kuwait had been brokered by the Arab League; but although Iraq accepted the deal, at the last minute, the Kuwaiti royals – long-time business partners of then-President George H.W. Bush – reneged and declared, "We will call in the Americans." Then the regional squabble between Iran and Kuwait was deceitfully turned into a "global threat" by the false claim that Iraq's invading forces were massing on the borders of Saudi Arabia. Pentagon chief Dick Cheney claimed secret satellite imagery showed vast Iraqi armies preparing to swoop down on the Saudi oilfields, the lifeline of the American economy. Bush Family capo James Baker, then Secretary of State, went before Congress and declared that the imminent war was all about saving American jobs. But commercial imagery obtained by a US newspaper at the time showed there were no Iraqi forces on the Saudi border. It was all a knowing lie – as were the claims paraded before Congress that Iraqi soldiers were flinging infants from their incubators in Kuwaiti hospitals. This bearing of false witness had been arranged by a prominent Bush-connected PR firm. The first Iraq War was just as falsely based and pointless as the second.
Unfortunately for the innocents in Oklahoma City, McVeigh too fully absorbed the lessons of the omnipresent teacher, even as he came to reject the teacher's authority. But his greatest crime in the imperial system was not that he killed innocent people in furtherance of political aims, but that he did it free-lance, without the "legitimacy" of a militarist government which slaughters innocent people by the hundreds of thousands in furtherance of its political aims.
Now in Afghanistan, the atrocities of the "legitimate" forces are fueling a prodigious growth in the "illegitimate" insurgency, transforming thousands of people who once opposed the Taliban into fighters under its banner. (Of course, "Taliban" has become a generic term for an array of opponents to the Western presence in Afghanistan). But these atrocities are an inevitable by-product of the very presence of foreign armies, which require "force protection" and close air cover and missile strikes to maintain and protect their operations. This inevitably produces large amounts of "collateral damage" (i.e., dead, maimed, ruined and dispossessed civilians.) The larger the foreign force, the more "force protection" it needs, which produces more atrocities, which fuels more resistance and more extremism. This is virtually a mathematical law. But of course, the very essence of a militarist state is that is feels unbounded by any law – not even the laws of human nature. Thus Washington is now increasing its military presence in Afghanistan, with Obama promising even more.
What will be the results of this policy? Do the math.
II. The Guardian provides an illuminating look at the fruits of American policy in Afghanistan today. This is what Barack Obama wants to see more of:
It was 7.30 on a hot July morning when the plane came swooping low over the remote ravine. Below, a bridal party was making its way to the groom's village in an area called Kamala, in the eastern province of Nangarhar, to prepare for the celebrations later that day.
The first bomb hit a large group of children who had run on ahead of the main procession. It killed most of them instantly.
A few minutes later, the plane returned and dropped another bomb, right in the centre of the group. This time the victims were almost all women. Somehow the bride and two girls survived but as they scrambled down the hillside, desperately trying to get away from the plane, a third bomb caught them. Hajj Khan was one of four elderly men escorting the bride's party that day.
"We were walking, I was holding my grandson's hand, then there was a loud noise and everything went white. When I opened my eyes, everybody was screaming. I was lying metres from where I had been, I was still holding my grandson's hand but the rest of him was gone. I looked around and saw pieces of bodies everywhere. I couldn't make out which part was which."
Relatives from the groom's village said it was impossible to identify the remains. They buried the 47 victims in 28 graves.
Stories like this are relatively common in today's Afghanistan. More than 600 civilians have died in Nato and US air strikes this year. The number of innocents killed this way has almost doubled from last year, and tripled from the year before that. These attacks are weakening support for the Afghan government and turning more and more people against the foreign occupation of the country...
The latest figures from the Afghan Independent Human Rights Commission, taken a month ago, suggest about 750 civilians have been killed by foreign forces this year. Most were killed in air strikes. The remainder were shot by jumpy soldiers, who often open fire in crowded public places after an attack on one of their convoys.
Humanitarian aid agencies say privately that they believe the figure is significantly higher, as many victims classed as "insurgents" are actually non-combatants...
Nato and US spokesmen say their forces go to great lengths to avoid civilian casualties. But all too often after an air strike, they deny civilians are among the dead or claim far fewer were killed.
A recent Human Rights Watch report said US investigations, when launched, have been "unilateral, ponderous, and lacking in transparency, undercutting rather than improving relations with local populations and the Afghan government".
The routine denials and hands-off attitude are contributing to a growing sense among Afghans that their lives are cheap in the eyes of the foreigners.
"We know they don't intend to kill the civilians but we don't believe they care enough not to," said Ahmad Zia, a jeweller in Kabul's busy bazaar. "If it continues we will see a lot more people joining the fight against the foreigners. It's inevitable."...
Sharif Hassanyar, a former interpreter with US Special Forces who is now working as a journalist, described how decisions were taken to bomb areas based on flimsy intelligence.
"I remember when I was working with a group of Rangers and a spy in the area told them the Taliban were training in a garden of a house so they bombed the house, without checking the information. Afterwards they found out that there had not been any Taliban there, only civilians were killed by the bombs," he said.
Informants for the foreign forces often give bad information either accidentally or because they are pursuing tribal or personal vendettas against individuals in neighbouring villages, he added...
It is not just the deaths from air strikes that are poisoning the hearts of Afghans. In the capital, Kabul, each day, terrified drivers swerve out of the way as foreign troops hurtle through the streets in their armoured convoys training their rifles on the drivers and pedestrians and shouting obscenities: "Stay the fuck back!"
The Afghans know to keep out of the way. Last year a US military convoy ploughed into several vehicles, killing seven people including a family. The incident sparked a riot involving thousands of angry Kabul residents. It was suppressed only after the security forces started shooting protesters on the streets. At least 15 people were killed.
"The anti-American feelings in Afghanistan are not just coming from conservative or religious elements," said Shukria Barakzai, a female MP.
"These feelings stem from the actions and military operations of the foreign troops. The anti-western sentiment is directly because of the military actions, the civilian casualties, and the lack of respect by foreign troops for Afghan culture."
By Chris Floyd
A Million McVeighs Now
The "Good War" in Afghanistan – the Bush-launched war that Barack Obama tells us we must fight and win – continues to deteriorate before our eyes. Just like every other operation in the so-called "War on Terror" (another Bush-launched campaign that Obama has fully embraced as his own), the Afghan war, now in its seventh year, has proven entirely counter-productive to its stated aims. Instead of stabilizing a volatile region and denying it as a base for violent extremism, it has of course done the opposite. The shock waves of the heavy-handed American-led invasion of Afghanistan – a country that no foreign power has ever conquered and held – have spread across Central Asia, most dangerously into Pakistan.
Afghanistan itself is in a desperate condition, laden with a weak, foreign-installed government dominated by warlords and riddled with corruption. The illegal opium trade, quashed by the Taliban, has now surged to historic levels, and is flooding the streets of Europe and the West with cut-rate heroin – not to mention fuelling an astonishing rise in drug addiction among Afghans, Pakistanis and Iranians. At every turn, the iron hand of American militarism is producing more suffering, more chaos, more corruption, more extremism, more slaughter, both directly and as blowback from people maddened into wanton violence by the relentless stream of atrocities.
And no, to comprehend an origin of violence is not to condone it; but reality compels acknowledgement of the fact that state-terror atrocity breeds "asymmetrical" atrocity in turn. It also teaches by example. The state militarists of empire say: Violence works. Violence is honorable. Violence is the most effective way to accomplish your goals. And you must not blench at killing innocent people in your violent operations. Is it any wonder that others adopt these methods, which are championed and celebrated by our most respected and legitimatized elites? Recall the words of one of America's own home-grown "asymmetricals," Timothy McVeigh, who at his sentencing for the Oklahoma City bombing quoted Justice Louis Brandeis: "Our Government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example."
McVeigh of course was schooled in death and violence as a soldier in the first Iraq War, where he had been appalled to find himself killing people who wished America no harm, and to see the wholesale slaughter of innocent people in a conflict that need never have been fought. A peaceful settlement of the complex financial and territorial dispute between Iraq and Kuwait had been brokered by the Arab League; but although Iraq accepted the deal, at the last minute, the Kuwaiti royals – long-time business partners of then-President George H.W. Bush – reneged and declared, "We will call in the Americans." Then the regional squabble between Iran and Kuwait was deceitfully turned into a "global threat" by the false claim that Iraq's invading forces were massing on the borders of Saudi Arabia. Pentagon chief Dick Cheney claimed secret satellite imagery showed vast Iraqi armies preparing to swoop down on the Saudi oilfields, the lifeline of the American economy. Bush Family capo James Baker, then Secretary of State, went before Congress and declared that the imminent war was all about saving American jobs. But commercial imagery obtained by a US newspaper at the time showed there were no Iraqi forces on the Saudi border. It was all a knowing lie – as were the claims paraded before Congress that Iraqi soldiers were flinging infants from their incubators in Kuwaiti hospitals. This bearing of false witness had been arranged by a prominent Bush-connected PR firm. The first Iraq War was just as falsely based and pointless as the second.
Unfortunately for the innocents in Oklahoma City, McVeigh too fully absorbed the lessons of the omnipresent teacher, even as he came to reject the teacher's authority. But his greatest crime in the imperial system was not that he killed innocent people in furtherance of political aims, but that he did it free-lance, without the "legitimacy" of a militarist government which slaughters innocent people by the hundreds of thousands in furtherance of its political aims.
Now in Afghanistan, the atrocities of the "legitimate" forces are fueling a prodigious growth in the "illegitimate" insurgency, transforming thousands of people who once opposed the Taliban into fighters under its banner. (Of course, "Taliban" has become a generic term for an array of opponents to the Western presence in Afghanistan). But these atrocities are an inevitable by-product of the very presence of foreign armies, which require "force protection" and close air cover and missile strikes to maintain and protect their operations. This inevitably produces large amounts of "collateral damage" (i.e., dead, maimed, ruined and dispossessed civilians.) The larger the foreign force, the more "force protection" it needs, which produces more atrocities, which fuels more resistance and more extremism. This is virtually a mathematical law. But of course, the very essence of a militarist state is that is feels unbounded by any law – not even the laws of human nature. Thus Washington is now increasing its military presence in Afghanistan, with Obama promising even more.
What will be the results of this policy? Do the math.
II. The Guardian provides an illuminating look at the fruits of American policy in Afghanistan today. This is what Barack Obama wants to see more of:
It was 7.30 on a hot July morning when the plane came swooping low over the remote ravine. Below, a bridal party was making its way to the groom's village in an area called Kamala, in the eastern province of Nangarhar, to prepare for the celebrations later that day.
The first bomb hit a large group of children who had run on ahead of the main procession. It killed most of them instantly.
A few minutes later, the plane returned and dropped another bomb, right in the centre of the group. This time the victims were almost all women. Somehow the bride and two girls survived but as they scrambled down the hillside, desperately trying to get away from the plane, a third bomb caught them. Hajj Khan was one of four elderly men escorting the bride's party that day.
"We were walking, I was holding my grandson's hand, then there was a loud noise and everything went white. When I opened my eyes, everybody was screaming. I was lying metres from where I had been, I was still holding my grandson's hand but the rest of him was gone. I looked around and saw pieces of bodies everywhere. I couldn't make out which part was which."
Relatives from the groom's village said it was impossible to identify the remains. They buried the 47 victims in 28 graves.
Stories like this are relatively common in today's Afghanistan. More than 600 civilians have died in Nato and US air strikes this year. The number of innocents killed this way has almost doubled from last year, and tripled from the year before that. These attacks are weakening support for the Afghan government and turning more and more people against the foreign occupation of the country...
The latest figures from the Afghan Independent Human Rights Commission, taken a month ago, suggest about 750 civilians have been killed by foreign forces this year. Most were killed in air strikes. The remainder were shot by jumpy soldiers, who often open fire in crowded public places after an attack on one of their convoys.
Humanitarian aid agencies say privately that they believe the figure is significantly higher, as many victims classed as "insurgents" are actually non-combatants...
Nato and US spokesmen say their forces go to great lengths to avoid civilian casualties. But all too often after an air strike, they deny civilians are among the dead or claim far fewer were killed.
A recent Human Rights Watch report said US investigations, when launched, have been "unilateral, ponderous, and lacking in transparency, undercutting rather than improving relations with local populations and the Afghan government".
The routine denials and hands-off attitude are contributing to a growing sense among Afghans that their lives are cheap in the eyes of the foreigners.
"We know they don't intend to kill the civilians but we don't believe they care enough not to," said Ahmad Zia, a jeweller in Kabul's busy bazaar. "If it continues we will see a lot more people joining the fight against the foreigners. It's inevitable."...
Sharif Hassanyar, a former interpreter with US Special Forces who is now working as a journalist, described how decisions were taken to bomb areas based on flimsy intelligence.
"I remember when I was working with a group of Rangers and a spy in the area told them the Taliban were training in a garden of a house so they bombed the house, without checking the information. Afterwards they found out that there had not been any Taliban there, only civilians were killed by the bombs," he said.
Informants for the foreign forces often give bad information either accidentally or because they are pursuing tribal or personal vendettas against individuals in neighbouring villages, he added...
It is not just the deaths from air strikes that are poisoning the hearts of Afghans. In the capital, Kabul, each day, terrified drivers swerve out of the way as foreign troops hurtle through the streets in their armoured convoys training their rifles on the drivers and pedestrians and shouting obscenities: "Stay the fuck back!"
The Afghans know to keep out of the way. Last year a US military convoy ploughed into several vehicles, killing seven people including a family. The incident sparked a riot involving thousands of angry Kabul residents. It was suppressed only after the security forces started shooting protesters on the streets. At least 15 people were killed.
"The anti-American feelings in Afghanistan are not just coming from conservative or religious elements," said Shukria Barakzai, a female MP.
"These feelings stem from the actions and military operations of the foreign troops. The anti-western sentiment is directly because of the military actions, the civilian casualties, and the lack of respect by foreign troops for Afghan culture."
Could Obama's Pro-Marijuana Commerce Secretary Spell a Golden Era for Pot Reform?
Go to Original
By Scott Thill
By Scott Thill
December has been an interesting month for marijuana, or cannabis as it is known to scientists and all too few others. To kick off the month, the U.S. Supreme Court decided against reviewing a California state appellate court ruling arguing that its medical marijuana law trumped federal law. That, in effect, set the stage for better implementation of medical-marijuana law in not just California, but every state that has one, while also reminding local police that the job of enforcing federal drug policy is, in fact, not its job.
Two days later, the oldest stash of cannabis ever found was unearthed from a 2,700-year-old grave in the Gobi desert, aptly reminding humankind and its ass-backwards politicians that pot has been around a lot longer than lobbyists. If the eye-candy archaeological slideshow didn't fully illustrate the value of such a stash, the scientists did.
"As with other grave goods, it was traditional to place items needed for the afterlife in the tomb with the departed," explained Ethan Russo, lead author of the Journal of Experimental Botany paper that announced the find.
But as readers pondered packing their own trusty pot for use in the afterlife, better news broke on the same day: President-elect Barack Obama nominated New Mexico Gov. Bill Richardson to his Cabinet as secretary of commerce. Given that Obama had already confessed to inhaling -- "that was the point," he classically cracked -- and once declared the hyperbolically named War on Drugs "an utter failure," adding that America needed to "rethink and decriminalize" American cannabis laws, Richardson's nomination to Commerce was cause for celebration. After all, Richardson signed a bill in 2007 making New Mexico the 12th state to legalize medical marijuana.
"So what if it's risky? It's the right thing to do," he said of his decision. "My God, let's be reasonable."
Reason is indeed what proponents of decriminalization have been crying for after four consecutive presidential terms derailed their hopes and maneuvers for legalized cannabis, medical and otherwise. But something has always stood in the way of that inevitability, and it has usually leaned quite heavily on the U.S. Constitution's Commerce Clause, which states that Congress has the right to regulate commerce between the United States and other nations, as well as between its own states. It remains the most widely interpreted clause in the Constitution and has been more abused than the American people's goodwill. In the landmark case Gonzales v. Raich, the U.S. Supreme Court, under the distracted leadership of Justice Antonin Scalia, sided with the Bush administration's argument that banning the homegrown cultivation and consumption of marijuana is a federal imperative, even when no cannabis changes hands or travels across state lines. The lunacy of the ruling even threw rightward justices like Clarence Thomas, Jr. off their creaking rockers.
"Certainly no evidence from the founding suggests that 'commerce' included the mere possession of a good or some personal activity that did not involve trade or exchange for value. In the early days of the Republic, it would have been unthinkable that Congress could prohibit the local cultivation, possession and consumption of marijuana … Respondents Diane Monson and Angel Raich use marijuana that has never been bought or sold, that has never crossed state lines, and that has had no demonstrable effect on the national market for marijuana. If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything -- and the Federal Government is no longer one of limited and enumerated powers."
Thomas is right, but a mostly Democratic Congress and Richardson offer the best chance in years to right this conundrum. With Richardson at Commerce, and Congress on the hunt for new sources of green, environmental and financial, during a time of deep economic recession, the launch window for legalization has never been wider…
"Richardson was a strong champion for legal access to medical marijuana," explains Reena Szczepanski, director of New Mexico's chapter of the Drug Policy Alliance. "In his role at the Commerce Department, he may be well-positioned to examine the economic contributions of the medical cannabis sector to the economy in states that have medical cannabis laws."
Well-positioned is right, but will Richardson exhibit the kind of spine he showed in the Democratic primary, when his brave decision on medical marijuana in his own state caused him to stick out like a sore realist? The answer came, once again, in December. When asked in an interactive question-and-response forum on Obama's transition site Change.gov whether the president-elect will "consider legalizing marijuana so that the government can regulate it, tax it, put age limits on it, and create millions of new jobs and create a billion-dollar industry right here in the U.S.," the site's answer was the following curt, depressing cop-out: "President-elect Obama is not in favor of the legalization of marijuana."
That is probably a play-it-safe deferral, given that Obama has yet to take office. But it is still disappointing, given that legalization is an even safer position with the public.
"The main obstacle to legalization of medical marijuana is that many politicians haven't yet figured out that it is a popular, politically safe issue," argues Bruce Mirken, director of communications for the Marijuana Policy Project. "The fact that it keeps rolling up wins surely helps with that, and the continuing stream of positive scientific studies does as well. But clearly the public is more divided on marijuana policy outside of medical situations, and we need to do a better job of understanding the public's concerns and addressing them."
In order for that to happen, a public dialogue needs to take place on legalization, and that is almost sure to happen under Obama's watch, as well of that of his friendly Democratic Congress. Indeed, the balls have already begun to roll.
"Legislation will be reintroduced in the House of Representatives during Obama's first term to reform America's antiquated and overly punitive federal marijuana laws," explains Paul Armentano, deputy director of the National Organization for the Reform of Marijuana Laws (NORML). "One bill seeks to allow state governments the ability to legalize and dispense medical cannabis without running afoul of federal law. Another seeks to remove federal anti-drug penalties on the possession of up to 100 grams of marijuana, roughly 3 ounces, by adults. One would hope that the new Congress will hold hearings on these proposals and begin a long-overdue, objective political discussion on Capitol Hill regarding the need to amend America's marijuana policies."
Given that the Bush administration left behind political and economic wreckage at home and abroad, decriminalization and reform might not be at the top of either branch of the government's to-do list. But an exponentially increasing climate crisis, resource shortage and recalibration of globalization and consumption is going to demand some homegrown answers, as nations, states and even cities circle the wagons and look for answers from the interior. And since cannabis has been with humankind for at least a newly established 2,700 years, can grow in practically any climate and was once cultivated by George Washington and Thomas Jefferson, there may be no place like home when it comes to turning around a superpower.
"That we spend billions every year in futile efforts to eradicate America's No. 1 cash crop, a drug markedly less harmful than alcohol, is insane," says Mirken. "And with the federal deficit approaching a trillion dollars, it is time to bring marijuana out of the underground economy, regulate it appropriately, and generate billions of dollars in tax revenues. Instead of guaranteeing all the profits to criminals, which is what prohibition does."
And if money isn't the point, let's move instead to morality. Even on that diaphanous front, the numbers have spoken.
"Since 1965, America has arrested over 20 million Americans for violating marijuana laws," explains Armentano. "Penalties include probation and mandatory drug testing; loss of employment; loss of child custody; removal from subsidized housing; asset forfeiture; loss of student aid; loss of voting privileges; loss of adoption rights; and loss of certain federal welfare benefits, such as food stamps. In human terms, some 34,000 state inmates and an estimated 11,000 federal inmates are serving time behind bars for violating marijuana laws. In fiscal terms, this means U.S. taxpayers are spending more than $1 billion annually to imprison pot offenders."
That's money and lives that disappear down the drain, never to return. And in the end, that is probably the reality that Obama and Richardson will be forced to reconcile. So even if Obama is against legalization now, he will probably be for it later. And if not him, someone else, who pissed-off voters will no doubt vote into office one day.
"It is not politically risky for the incoming administration to move forward in this area," adds Armentano. "This is a realm where the public is well ahead of the politicians."
Did America Get Punk'd on the Bailout?
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By David Sirota
By David Sirota
When I went on Rachel Maddow's show on Tuesday, she asked a question about the bailout that is really the question of our time: Did we get punk'd? As progressive bailout critics have been saying since the current Wall Street bailout was first proposed, the answer is yes.
As the Minneapolis Federal Reserve reports, the major claims about a credit crisis that justified Congress cutting a trillion-dollar blank check to Wall Street were demonstrably false. And new data and reports show they remain demonstrably false.
For instance, take a look at line 1 and line 5 of this December Federal Reserve report on bank lending. That's right -- you see no significant decrease in lending, and in some cases, an increase. Interbank lending has dropped some, but certainly not at the crisis levels the Bush administration and banks claimed.
Then take a look at this story from Reuters, recounting a big report from a widely respected financial analysis firm:
"The credit crunch is not nearly as severe as the U.S. authorities appear to believe, and public data actually suggest world credit markets are functioning remarkably well, a report [from Celent consulting] released on Thursday says. ... The report, much of which is based on U.S. Federal Reserve data, challenges a long list of assumptions one by one, arguing that there is indeed a financial crisis but that, on aggregate, the problems of a few are by no means those of the many when it comes to obtaining credit.
"It is startling that many of (Federal Reserve) Chairman (Ben) Bernanke and (Treasury) Secretary (Henry) Paulson's remarks are not supported or are flatly contradicted by the data provided by the very organizations they lead," said the report.
Regarding U.S. business access to credit, the report says: Overall U.S. bank lending is at its highest level ever; U.S. commercial bank lending is at record highs and growing particularly fast since May 2007; corporate bond issuance has declined, but increased commercial lending has compensated for this; [interbank] lending hit its highest level ever in September 2008 and remained high in October and that overall interbank lending is up 22 percent; the cost of interbank lending ... dropped to its lowest level ever in early November and remains at very low levels; [consumer credit] was at a record high in September; and local government bond issuance had continued at similar levels to those before the credit crisis, while bank lending for real estate reached a record level in October 2008, it says. (emphasis added)
Then there's this from the Wall Street Journal looking at a new study by the National Federation of Independent Business:
The report found that among small businesses "no 'credit crunch' has appeared to date beyond the normal cyclical tightening of credit." The NFIB found that worries about interest rates and financing were a concern to only 3 percent of respondents. ... By and large, the story of the NFIB report was that if credit is going untapped, it's largely because company operators are not choosing to pursue the credit. It's not that companies can't get the extra money, it's that they don't want or need it because of the broader slowdown in economic activity. (emphasis added)
That last point is the big one: The real crisis is in the real economy -- ya know, the real world of jobs, wages, health care premiums and pensions that Washington has totally ignored as it keeps writing checks to its well-heeled campaign contributors on Wall Street under the guise of a lending crisis. Adding insult to injury is the last thing I discussed with Rachel -- the fact that because the bailout money came with almost no strings attached, the financial-industry recipients of the taxpayer largesse are either hoarding the money, using it to pay shareholder dividends and executive bonuses, or devoting it to efforts to buy up smaller competitors.
So what to do?
First things first -- we have to pressure, cajole, lambaste and downright humiliate Wall Street stooges on Capitol Hill who claim nothing can be done. These are people like Sen. Chuck Schumer, D-N.Y.. The recent subject of a scathing New York Times profile examining his complicity in the financial crisis, Schumer insisted to the Wall Street Journal that despite Congress' clear power to reform -- or even revoke -- the bailout, "there's not much we can do other than jawbone." It's the old Innocent Bystander Fable, designed to make us think Congress can do nothing other than keep forking over the money to campaign contributors. And it's a straight-up lie.
Second, Congress can reject the Bush administration's request to release the next $350 billion installment of no-strings-attached bailout money for Wall Street, if that request happens.
Third, Congress can add all the strings and oversight measures to the remaining money that bailout critics originally said were necessary. That means eliminating gaping loopholes in the executive pay limits; preventing the money from subsidizing shareholder dividends, forcing the government to buy voting shares of bank stock (rather than nonvoting stock, as it is doing today) so that regulators have the leverage to clean out bad bank management; following Britain's lead in making the money contingent on increased lending; and expanding the ways the money can be used so that it can be allocated to the real economy (i.e. manufacturing companies, etc.).
Finally, Congress can allocate the unspent bailout money to a robust economic-recovery package focused on job-creating infrastructure and health care priorities -- and Congress can pass that economic recovery package right now, rather than waiting for the next president.
Looking at what's gone on in the last three months, we see a classic example of Naomi Klein's "shock doctrine" and subsequent disaster capitalism. Bailout critics were attacked as "irresponsible" by Establishment pundits and politicians -- even though the data showed that those pundits and politicians were using an admittedly real problem to manufacture the perception of a full-on earth-shattering crisis so as to justify the biggest taxpayer heist in contemporary American history. And though that data was largely ignored by the same media that beat the drum for the bailout, it is now becoming too compelling to ignore.
As the real economy is ignored by Washington, and as the government's own numbers expose the shameless dishonesty of the Beltway's bailout proponents, it's time for our leaders to listen to the real pragmatists, who have been right all along.
Visit msnbc.com for Breaking News, World News, and News about the Economy
Wall Street's Bankruptcy
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By François Vidal
And now, Wall Street's biggest scandal. We thought we'd seen everything with the Kerviel affair and its 5 billion Euros of trading losses. Now, at year-end, the Madoff affair has exploded, with its $50 billion - or more - up in smoke! A major new earthquake a global finance sector in very bad shape could well have done without. That, in the heart of the Mecca of global finance, a member of the establishment, Bernard Madoff, should have been able to use his personal reputation to fertilize a most basic garden variety "scam" for years at the expense of wealthy clients and the most sophisticated investors seems absolutely unbelievable. But beyond the shock of an affair that promises to be worthy of a Hollywood screen play, the first elements of this new scandal prove that there is decidedly something broken on Wall Street.
A year and a half after the bursting of the "subprime" bubble, this affair testifies once again to the dangers of a system guided solely by thirst for profits, a system in which leading operators are ready to bestow their confidence on a manager solely on the basis of his pretty face, whenever they can hope for a few more points of return from it. And what does it matter that in this instance the investment strategy implemented to honor the promise of an 8-12 percent return per year had never really been defined, in contempt of the most elementary rules of prudence.
A system in which the supervisory authority - in this case the SEC, the American stock exchange's policeman - is incapable of fulfilling its mission. A pure and simple failure - or connivance: the investigation will determine. In the meantime, the facts are there. Seven years after the Enron affair and while its - at the very least, lax - supervision of Wall Street's banks has been shown decisive in the excesses committed the last few years, the SEC shines once again by its incompetence.
Under these conditions, there is no doubt that the revelation of this disastrous "pyramid' fraud will undermine the already vacillating confidence of investors still more. Since the Lehman Brothers' bankruptcy in mid-September, they've continued to liquidate their investment portfolios, preferring to be completely liquid to remaining exposed to badly identified risks. That all translates into a fire sale of assets, feeding the drop in the markets and the collapse of the "hedge fund" industry. With the Madoff affair, this every-man-for-himself stampede to liquidity will certainly accelerate. The year 2009 already promised to be very difficult for the markets. It is likely to be worse.
By François Vidal
And now, Wall Street's biggest scandal. We thought we'd seen everything with the Kerviel affair and its 5 billion Euros of trading losses. Now, at year-end, the Madoff affair has exploded, with its $50 billion - or more - up in smoke! A major new earthquake a global finance sector in very bad shape could well have done without. That, in the heart of the Mecca of global finance, a member of the establishment, Bernard Madoff, should have been able to use his personal reputation to fertilize a most basic garden variety "scam" for years at the expense of wealthy clients and the most sophisticated investors seems absolutely unbelievable. But beyond the shock of an affair that promises to be worthy of a Hollywood screen play, the first elements of this new scandal prove that there is decidedly something broken on Wall Street.
A year and a half after the bursting of the "subprime" bubble, this affair testifies once again to the dangers of a system guided solely by thirst for profits, a system in which leading operators are ready to bestow their confidence on a manager solely on the basis of his pretty face, whenever they can hope for a few more points of return from it. And what does it matter that in this instance the investment strategy implemented to honor the promise of an 8-12 percent return per year had never really been defined, in contempt of the most elementary rules of prudence.
A system in which the supervisory authority - in this case the SEC, the American stock exchange's policeman - is incapable of fulfilling its mission. A pure and simple failure - or connivance: the investigation will determine. In the meantime, the facts are there. Seven years after the Enron affair and while its - at the very least, lax - supervision of Wall Street's banks has been shown decisive in the excesses committed the last few years, the SEC shines once again by its incompetence.
Under these conditions, there is no doubt that the revelation of this disastrous "pyramid' fraud will undermine the already vacillating confidence of investors still more. Since the Lehman Brothers' bankruptcy in mid-September, they've continued to liquidate their investment portfolios, preferring to be completely liquid to remaining exposed to badly identified risks. That all translates into a fire sale of assets, feeding the drop in the markets and the collapse of the "hedge fund" industry. With the Madoff affair, this every-man-for-himself stampede to liquidity will certainly accelerate. The year 2009 already promised to be very difficult for the markets. It is likely to be worse.
The Axe, the Book, and the Ad
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By Tom Engelhardt
On Reading in an Age of Depression
By Tom Engelhardt
On Reading in an Age of Depression
Worlds shudder and collapse all the time. There's no news in that. Just ask the Assyrians, the last emperor of the Han Dynasty, the final Romanoff, Napoleon, or that Ponzi-schemer Bernard Madoff. But when it seems to be happening to your world, well, that's a different kettle of fish. When you get the word, the call, the notice that you're a goner, or when your little world shudders, that's something else again.
Even if the call's not for you, but for a friend, an acquaintance, someone close enough so you can feel the ripples, that can do the trick. It did for me two weeks ago, when a close friend in my niche world of book publishing (at whose edge I've been perched these last 30-odd years) called to tell me that an editor we both admire had been perp-walked out of his office and summarily dismissed by the publisher he worked for. That's what now passes for politeness in the once "gentlemanly" world of books.
His fault, the sap, was doing good books. The sort of books that might actually make a modest difference in the universe, but will be read by no less modest audiences -- too modest for flailing, failing publishing conglomerates. If you were talking in terms of cars, his books would have been the equivalent of those tiny "smart cars" you see in increasing numbers, tucked into previously nonexistent parking spots on city streets, rather than the SUVs and pick-ups of the Big Three. It may be part of the future, but who cares? Not now -- and too bad for him.
It wasn't really him, of course. He was just a small fry, like most of us, in the bloated universe of entertainment. As with so many workers at the moment -- and it doesn't matter whether you're talking about the downturn in restaurant hires or the cuts made by that sports titan, the National Football League (about 150 jobs), or the public radio oufit NPR (64 jobs, two shows) -- his firing was a by-product of economic and funding catastrophes elsewhere.
He went down during what publishing people are calling "Black Wednesday." On that day, 35 people were axed by publisher Simon & Schuster (owned by CBS), while two key figures at Random House (owned by the German multimedia giant Bertelsmann), who headed two of its largest groups "resigned" as part of a "reorganization" -- a vague word that covers a multitude of sins. This will undoubtedly result in further head-rolling in the weeks or months to come.
Then, of course, there was Houghton Mifflin Harcourt. (The name is a little publishing history lesson, a fusion of two recently conglomerated houses of distinction. It reminds me of newspaper names from my New York City childhood like the World-Telegram and Sun -- once the New York World, the Evening Telegram, and the New York Sun.) Just the week before Black Wednesday, its owner, the Irish private-equity firm Education Media & Publishing Group Ltd., saddled with an ocean of debt, made publishing history by instituting a "freeze" on the acquisition of new books. If you're not in the tiny world of publishing, that may not ring too weirdly, but what is a publishing house except a staff, a backlist (those books already published and still in circulation), a set of books being published (that is, a catalogue), and those signed on for the future? Without future books, there is no publishing.
On Black Wednesday, Education Media completed the deal by decimating Houghton's staff. Its publisher had already resigned, assumedly in protest or dismay. Evidently, sooner or later, the "house" will go on the auction block, the assumption perhaps being that, in the present economic environment, a distinguished publishing house with a long history is more saleable as a valuable backlist than as a living, breathing entity. Houghton-Mifflin (Harcourt) R.I.P.
Publishing Obits
A friend (and author) called me recently after visiting a large bookstore in Northern California and, his voice suitably hushed, told me that, on a weekday, he had been the only customer in sight. That's typical of the nightmarish tales about traffic in bookstores and book sales now ripping through my world as 2008 ends.
So it goes, the late Kurt Vonnegut might have said.
Publishing houses are certainly bleeding and those that haven't yet started to take staff and books out to the woodshed, axe in hand, are going after end-of-the-year bonuses, raises, and who knows what else, while management girds its loins for "the inevitable." After all, in malls across America, the chain bookstores are getting mauled (just like other retailers). Traffic at many bookstores nationwide has evidently slowed to a trickle. Book orders have reportedly fallen off a cliff. It's now being said that, in this Christmas season, no popular book is selling so well as to be unavailable. In other words, if you want it, it's going to be at your local Barnes & Noble. For publishing, that's like an obituary.
Think of those auto showrooms that were selling a couple of cars a week and are now lucky to sell a couple a month, then think books. And it's not just that books aren't selling, comparatively speaking, but that they're winging their way back to publishing houses in startling numbers and, evidently, even more startlingly to university presses. Rumor has it that some academic publishers are experiencing unheard of return rates that can go as high as 90%. (A unique aspect of the book business now guaranteed to add up to hell-on-Earth for publishers is that bookstores can return unsold product to manufacturers without penalty.)
Think of it this way, those book versions of SUVs and pick-ups, all those Ford Explorer-type volumes, often so costly to put under contract but churned out so confidently for so long by the oversized giants of the publishing world, are now mostly sitting in their mall lots idling -- or, as you read this, they're winging their way back to publishers' warehouses.
How Not to Read a Newspaper
To put this in perspective, the corporate giants of publishing, and their serried ranks of groups, divisions, imprints, and boutique operations, all those formerly independent houses swallowed whole from the 1970s through the 1990s, are but drops in the overflowing economic bucket of bad times. Thirty-five people beheaded? A mere bag of shells, as Jackie Gleason used to say.
For a little perspective, just consider the jobs headlines of the last couple of weeks: In a major reorganization, announced on December 8th, Dow Chemical revealed plans to cut 5,000 jobs and close 20 plants, sending about 11% of the chemical giant's workforce down the human drain. The company also plans to "temporarily idle 180 plants and prune 6,000 contractors from its payroll."
Or think of GM announcing that it will idle all its North American assembly plants during some part of the first quarter of 2009, while turning out 60% fewer vehicles. Or the 3M company, which announced cuts of 1,800 on the same day Dow issued its bad news. Talk about a "black" day! Or the Sony Company at about the same time, announcing that it would "cut 8,000 employees worldwide over the next year, slash investment in its electronics business by 30 percent, and close roughly half a dozen of its 57 manufacturing sites around the globe." We're talking 5% of Sony's workforce. Or Bank of America, which made public a massive "workforce reduction" scheme: 30,000-35,000 jobs eliminated globally over the next three years, as part of a reorganization after absorbing Merrill Lynch. I mean, we're talking slaughter here. And given the staggering U.S. job-loss count in November, 533,000 according to the Bureau of Labor Statistics, and the fact that the number of Americans filing for unemployment benefits jumped to a 26-year high in early December, you know that this is just scratching the surface of the disaster.
Chemicals, cars, finances, even post-its. That's major stuff. Books? They're such modest (and, at best, modestly profitable) objects, even if the book has the remarkable ability to teleport readers into worlds not their own. I mean, if you really want to talk about the destruction of companies in the reading game, then try a business where it's been hell on Earth for years: newspapers.
Talk about collapsing worlds, newspapers were a disaster area long before the greatest downturn "since the Great Depression" hit. The bad news about the news has been flooding in for years, even if it's worsened under the weight of more general economic tough times. If, for instance, you were even reading a newspaper in print on Tuesday, December 9th (and, if you're under 25, odds are you weren't), then you undoubtedly caught the story about the debt-ridden Tribune Company, a news monster which owns, among other properties, the Los Angeles Times (almost half its staff lost since 2001), the Baltimore Sun, the Chicago Tribune (almost a third of its staff lost since 2005), and even the Chicago Cubs, filing for "bankruptcy."
The company even had the nerve to claim that bankruptcy meant it could "cease all severance payments and deferred compensation to employees who have been laid off." (Pity the poor reporters who took those buyouts.) It also hired the investment bank Lazard and the law firm Sidley Austin as consultants. In case you're worried, they surely will get paid. (Up front, if they're smart.)
All this means is that another bunch of newspaper workers -- a dwindling crew -- is now in essentially the same situation as the workers who sat in and won their severance pay at Chicago's Republic Windows and Doors factory after they were given only three days notice to vacate. Don't expect sit-ins or fight-back victories at the LA Times anytime soon, however.
Only the week before the Tribune filed, America's largest newspaper company Gannett announced a 10% cut in its workforce due to "declining revenue," on top of a 3% cut last August (neither evidently being part of the 5% "trim" at its flagship paper USA Today in late November). And don't get me started on the rest of America's newspapers. At least 30 of them are for sale right now, including the 149-year-old Rocky Mountain News, which lost $11 million in the first nine months of this year, with few buyers in sight.
In the style of some black hole, the vortex of the Internet has, for years, been sucking in young readers and, more important for the finances of journalism, ads, which account for four-fifths of all newspaper revenue (with disappearing classifieds accounting for half of that). Under the extra pressure of hard times, the decline in ad revenues is now turning into a deluge. In the third quarter of 2008, national newspaper advertising reportedly dropped by 18%. When it comes to the news in print, you wonder who will be left minding the store. Poor Detroit's main papers are cutting home delivery to three days a week, another national first, and it can't be long before a major U.S. city lacks its own daily. Maybe the question now is: What store?
All of this certainly adds up to a nightmare for a guy just young enough to be running a political website, but old enough to have the habit of reading two newspapers in print a day. Still, none of this got to me, not even those 533,000 jobs lost, the way the firing of one editor I knew did.
And that, I suspect, is typical. For most of us, most of the time, the world is a remarkably parochial place. I read newspapers, use post-its and Saran Wrap, and drive a car (sometimes). But I've probably edited and put into circulation several hundred books. That's my world. And now it's beginning to look like the time of the bloated publishing conglomerate is nearing an end, with an unknown effect on the time of the book itself.
The Ad and the Book
In my career as an editor, a mere few decades, I've seen publishing transformed from the equivalent of a cottage industry -- the term "publishing house," of course, once implied a freestanding entity -- to the subbasement of giant entertainment conglomerates. I've watched those conglomerates swallow up houses large and small, creating book companies filled to the rafters with various publishing groups, divisions, imprints, and boutique operations.
All of this happened as bookstores, too, morphed from largely independent cottage operations into giant chains that kept expanding their vast book emporiums into ever newer territory. And all of this, in turn, was possible only because the computer was transforming everything in the publishing process except the book itself. (A typical Barnes & Noble book palace couldn't, for instance, exist without computer systems to keep track of stock.) And for those ever expanding stores, the publishing conglomerates just kept spewing out new catalogues and new volumes. After all, there were all those bookshelves to fill nationwide, forever.
In scale, even the largest of modern publishers with a global reach isn't exactly a GM or a Citigroup or an AIG, in part because, unlike the car, banking, or insurance, the book represents such a quirky, small-scale, labor-intensive process to create and produce, but also to absorb. Demanding a significant investment of time and energy on the part of the consumer, it has always fit somewhat awkwardly into the world of mass entertainment. Still, there's a comparison to be made. As bloated as their larger cousins, the big corporate publishing outfits seemed to feel that, when it came to the future, they were immune.
Now you can't exactly blame a business for not predicting the future, since we humans are generally terrible seers. But when the future stares you in the face, as with the three automobile giants over the last decade, or when, as with publishing, it even offers you a helpful illustration of what might be in store for you, aren't you culpable of something?
After all, when it came to illustrations, the newspaper's decline wasn't exactly a well-kept secret. But there were, I suspect, three key factors that cushioned book publishers from believing that that future would be theirs, and so from truly facing the challenge of the Internet and of the screaming wallpaper of the burgeoning entertainment universe.
The first was the ad. Book publishers seemed invulnerable to the fate of the newspaper, in part, because the ad played no part in the book's financial success.
There's a piece still to be written on the book and the ad. The ad, after all, has colonized everything in our world from gas pumps to urinals, bars to doctor's offices, taxis to your sneakers and cell phone, not to speak of every imaginable printed form, including the cereal box and the back of your supermarket receipt, and yet, strangely enough, it never successfully colonized the book.
This, in our world, has to be considered some kind of unnoticed miracle. Yes, the early book sometimes had quack medicine ads in it and, for years, certain paperbacks had ads for other books (by the same publisher) at the back, but the book largely resisted the ad. Even after publishers, rushing to join the other mass forms, began wrapping book covers around anything from movie novelizations to material that had once been confined to "police gazettes" or Hollywood fan mags, the ad still -- against all logic -- stayed away. The authority of the book seemed, by some mysterious process, to resist it.
Back in the 1990s, ad whiz Chris Whittle launched a series of books on serious subjects by select high-flying authors for select high-flying corporate readers and leaders. These were filled with glossy Fedex ads. But when the publisher W.W. Norton picked up the series for the book trade, the ads were dropped. In 2001, the jewelry firm Bulgari paid Fay Weldon for extensive "product placement" in her novel fittingly entitled The Bulgari Connection, and that caused a little media brouhaha. Each of these, however, proved not an inroad, but a stunt.
(On the other hand, any future successful e-book reader, whether the Amazon Kindle or something else, will surely have ads; but then again, if any one device really catches on, in its next generations it is bound to "generalize": that is, you'll be able to read books on it, but also undoubtedly catch what's left of newspapers, check your email, text friends, and probably take photos too. In other words, you'll be in a new universe which, for better and worse, will only partially resemble book reading as we've known it -- and worse yet, from the publisher's point of view, the technology will be the property of someone else.)
Because the ad played no part in the book, there was nothing of obvious financial value for the Internet to suck out of book operations, except, of course, the attention of readers. This left publishers, even if not thinking directly about the ad and the book, feeling relatively immune to the otherwise erosive and corrosive qualities of that new world.
In addition -- factor two -- the chain bookstore was still expanding in the early years of this century, reaching into new cities and new neighborhoods. This seemed to ensure an expanding future for the book business (despite a yawning lack of evidence that Americans were, on average, reading more books).
The blindly hopeful nature of all this was brought home only in the last few months as books went dead in those very same stores, and the chains began cutting back every which way. One of the two major chains, Borders, losing money hand over fist, is now "reorganizing," which may actually mean hanging on by a thread. As the trade publication Publisher's Weekly put the matter, Borders "has become more selective in its buying, aggressively reducing the size of its inventory." "Steep cuts in inventory" is another way of putting it and obviously not good news for those inventory providers, book publishers. By now, both chains may also be closing some less profitable stores.
As with GM, it was always easier and far more immediately profitable for the big publishers just to keep selling those "SUVs" until their business model went into the toilet rather than try to prepare for a new world. And -- factor three -- there was one last bit of history that helped foster the illusion of future book prosperity. It was well known in the business that, during the Great Depression, books, like movies, had done splendidly. They were an inexpensive bit of entertainment and distraction, consumable at home, at a time when not much else pleasurable was going on in a rugged world. Ergo, books would be no less recession-proof in the next big downturn.
There was no reason to believe otherwise… unless you happened to focus on just how many dazzling entertainment options had, in the interim, entered the American home at prices more than competitive with the book. After all, most Americans can now read endlessly on the Internet, play video games, download music, watch movies, and even write their own novels without stepping outside; and keep in mind that the $27.95 hardcover and the $15.95 paperback on the shelves of that mall store, once you drive there, aren't exactly the inexpensive objects of yore.
Publishers nonetheless clung to this bit of Depression-era lore for dear life as economic bad times bore down. And, unlike with the newspaper, it's been those bad times that have suddenly brought the axe down on book publishing. But publishers now firing staff, folding up or merging divisions, and shutting down boutique operations in order to last out the bad times shouldn't be fooled twice. The return of economically better times (someday) is unlikely to mean the return of the book world of these last few decades.
Small independent publishers, which often have trouble surviving even in good times, are nonetheless more agile, more experimental, and closer to the Internet revolution than the big houses. They are capable of turning on a dime, while the conglomerates -- with their long lead times (often 8 months to a year to put a book in the store) -- probably can't turn on anything, which leaves them losers in an Internet world in which yesterday's news might as well be last year's.
Think of that old image of shrew-like mammals scooting around among the feet of the soon-to-be-extinct dinosaurs. For instance, Chelsea Green, a small publisher in Vermont having its best year ever, reports that it delivered a new book by Robert Kuttner, Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency, from final manuscript form into the hands of readers in a matter of four weeks, and so just in time for the Democratic Convention, which is remarkable. There perhaps lies one future for the book.
I can't claim to be exactly surprised by all this. After all, in my 2003 novel The Last Days of Publishing, I imagined -- because this wasn't exactly a feat of genius (except perhaps for publishing management) -- many of the things that are now happening to the book and the business (even an editor being perp-walked to an axing, something that, back then, hadn't yet happened in the business).
I meant that title with a certain irony, because the end of the book, or even of reading itself, had been predicted and fretted about for so long. And yet, more than 550 years after the first Gutenberg Bible appeared, the printed book, still an unsurpassed technology for delivering information and experience, isn't leaving the scene soon. It's always worth remembering that, when those first printed books began to circulate in Western Europe, the previous form, the illuminated, hand-copied manuscript, did not disappear, despite what you might imagine. It lasted at least another century as a high-end collectible, which was largely what it had long been anyway.
The book remains a techno-wonder that not even the Kindle has yet surpassed. But it's a wonder in a very crowded entertainment universe in which habits, reading and otherwise, are changing fast. Add to that a world plunging into the worst of times and you have a combustible combination. The chain bookstore, the bloated publishing house, and the specific corporate way of publishing that goes with them are indeed in peril. This may no longer be their time. As for the time of the book, add on another century if you want, but in our ever restless universe it does seem to be shortening.
This Monday, as I was working on this post, MacMillan, owned by the other German publishing giant Holtzbrinck, which owns St. Martin's Press, Farrar, Strauss, and Giroux, the paperback house Picador, and Henry Holt, which, in turn, houses Metropolitan Books, the small imprint for which I work part-time, fired 64 of its employees. I'm still here, but again my tiny world shuddered.
Time To Wake Up And Smell the Economy
Go to Original
By Jon Ronnquist
Here at last then is the defining moment of our time, our legacy to whatever lies beyond this cataclysmic failure of the human race. For the want of understanding, the kingdom was lost. And all this in what could have been the golden age of mankind.
Call it scare mongering, call it incitement of panic, hell call it terrorism for all that catchphrase means. Just don't say I didn't warn you. The proverbial has hit the fan and the mess is going to be almighty.
By all valid accounts, which is to say all those you won't hear about, the linchpin of the global economy, the all mighty US Dollar, is on a death march. We are not talking about deflation either, this is going to be a flat tyre in the middle of nowhere. And with it will go everything and everyone whose plans, wealth and future was pinned on it, namely the western world as we know it.
How did this happen? Who is responsible? Why did we let it go so far? I suspect these questions will reach the lips of untold numbers before we see another winter. They are valid questions. Perhaps the only ones left that are worth asking. So let us not abandon them to posterity along with the ruins.
What looms on the horizon now is not a season for humility but the inevitable itself. This is the human race collapsing in on itself at the end of a long and slow process of rot which was eating away at the third world long before it reached the golden shores of the west. For a time we were all kings, walking tall beneath the banner of imagined destiny. In the east the grateful poor toiled at our behest and sang songs of praise to their generous masters beyond the sea. Or so we dreamt even as we watched them dead and dying at the hands of our henchmen. Now that our halls are crumbling beneath the weight of our own greed and false complacency, let us not dishonour the dead with our hollow pleas of innocence and ignorance. It is only we who do not yet know real suffering, to the world at large it has long since become a matter of course.
Were we manipulated into complacency? Of course we were. Does that absolve us of responsibility? Of course it doesn't. Our very laws are founded on the principle that it can't. It is all too easy to lay the blame at the feet of a handful of evil men. But you cannot stone the slave auctioneer when you are a profiteer of his trade. See reason and banish him by all means, but do not court hypocrisy by false disassociation.
I do not say that there is nothing left for which to fight. On the contrary this economic end of days may yet see us able to buy back our very souls. It is after all the first thing we lost and the most promising foundation for a newer and better world. But if that opportunity for amnesty does present itself, it must be extended to all or we will surely forfeit that most valuable of possession for good.
Stupidity, not economics, is the stepping stone to mass manipulation. Wise men do not buy fool's gold. Complaisance, selfish interest and false neutrality are the aftermath, not the catalyst of the human tendency to look away. But stupidity is the key. And to support the status quo after all it has taught us would be the final act of human ignorance for sure. Not to mention a pointless one.
To see this collapse of global finance as a problem would be short-sighted indeed. Of course in the west that seems to be the crime of which we are universally guilty, one and all. We must stop seeing the world in the false terms in which we have been schooled to look at it. Only then can we begin to appreciate that what is dying before us is only doing so because we didn't save it when it could still be saved. In it's current form, the system is beyond redemption. Any effort to piece this global economy back together will amount to nothing more than the penultimate concentration of wealth in history. A concentration so great that talk of police states and new world orders would cease to be talk all together. If you believe that another loan will see you through this rough patch and into open seas on the other side, you have not understood what is happening.
I do not say these things lightly. I myself am scarred to death of the uncertainties which lie ahead. But when the hammer falls at least I will not become paralysed with dumb shock. And whatever I do make of my future, I know it will not look anything like my past and that is a blessing.
Wake up or sleep tight. The time for easy options is running out.
Over and out.
By Jon Ronnquist
Here at last then is the defining moment of our time, our legacy to whatever lies beyond this cataclysmic failure of the human race. For the want of understanding, the kingdom was lost. And all this in what could have been the golden age of mankind.
Call it scare mongering, call it incitement of panic, hell call it terrorism for all that catchphrase means. Just don't say I didn't warn you. The proverbial has hit the fan and the mess is going to be almighty.
By all valid accounts, which is to say all those you won't hear about, the linchpin of the global economy, the all mighty US Dollar, is on a death march. We are not talking about deflation either, this is going to be a flat tyre in the middle of nowhere. And with it will go everything and everyone whose plans, wealth and future was pinned on it, namely the western world as we know it.
How did this happen? Who is responsible? Why did we let it go so far? I suspect these questions will reach the lips of untold numbers before we see another winter. They are valid questions. Perhaps the only ones left that are worth asking. So let us not abandon them to posterity along with the ruins.
What looms on the horizon now is not a season for humility but the inevitable itself. This is the human race collapsing in on itself at the end of a long and slow process of rot which was eating away at the third world long before it reached the golden shores of the west. For a time we were all kings, walking tall beneath the banner of imagined destiny. In the east the grateful poor toiled at our behest and sang songs of praise to their generous masters beyond the sea. Or so we dreamt even as we watched them dead and dying at the hands of our henchmen. Now that our halls are crumbling beneath the weight of our own greed and false complacency, let us not dishonour the dead with our hollow pleas of innocence and ignorance. It is only we who do not yet know real suffering, to the world at large it has long since become a matter of course.
Were we manipulated into complacency? Of course we were. Does that absolve us of responsibility? Of course it doesn't. Our very laws are founded on the principle that it can't. It is all too easy to lay the blame at the feet of a handful of evil men. But you cannot stone the slave auctioneer when you are a profiteer of his trade. See reason and banish him by all means, but do not court hypocrisy by false disassociation.
I do not say that there is nothing left for which to fight. On the contrary this economic end of days may yet see us able to buy back our very souls. It is after all the first thing we lost and the most promising foundation for a newer and better world. But if that opportunity for amnesty does present itself, it must be extended to all or we will surely forfeit that most valuable of possession for good.
Stupidity, not economics, is the stepping stone to mass manipulation. Wise men do not buy fool's gold. Complaisance, selfish interest and false neutrality are the aftermath, not the catalyst of the human tendency to look away. But stupidity is the key. And to support the status quo after all it has taught us would be the final act of human ignorance for sure. Not to mention a pointless one.
To see this collapse of global finance as a problem would be short-sighted indeed. Of course in the west that seems to be the crime of which we are universally guilty, one and all. We must stop seeing the world in the false terms in which we have been schooled to look at it. Only then can we begin to appreciate that what is dying before us is only doing so because we didn't save it when it could still be saved. In it's current form, the system is beyond redemption. Any effort to piece this global economy back together will amount to nothing more than the penultimate concentration of wealth in history. A concentration so great that talk of police states and new world orders would cease to be talk all together. If you believe that another loan will see you through this rough patch and into open seas on the other side, you have not understood what is happening.
I do not say these things lightly. I myself am scarred to death of the uncertainties which lie ahead. But when the hammer falls at least I will not become paralysed with dumb shock. And whatever I do make of my future, I know it will not look anything like my past and that is a blessing.
Wake up or sleep tight. The time for easy options is running out.
Over and out.
London Banker: "The market has failed, and officialdom is perpetuating that failure."
Go to Original
By Mike Whitney
Ever since the two Bear Stearns hedge funds defaulted 17 months ago triggering a global financial crisis, the Federal Reserve has been busy putting out one fire after another. Fed chief Ben Bernanke has slashed interest rates to .25 percent, handed out billions in emergency funding to teetering insurance companies and mortgage lenders, and provided $8.3 trillion in loan guarantees to keep the financial system from collapsing. Unfortunately, nothing the Fed has done has either stabilized the markets or stopped the contagion from spreading to the broader economy where consumer spending has fallen sharply, unemployment has skyrocketed, manufacturing has slipped to a 30 year low, and housing prices have plummeted. Bernanke, the Princeton academic who is an expert on the Great Depression, is limited in his understanding of the crisis by his "monetarist" bias. He believes that the only way to fight credit contraction is by flooding the financial system with liquidity ("quantitative easing"). But this remedy focuses more on reducing the symptoms rather than curing the disease. Christopher Wood sums it up in an article in the Wall Street Journal article "The Fed is Out of Ammunition":
"The origins of the modern conventional wisdom lies in the simplistic monetarist interpretation of the Great Depression popularized by Milton Friedman and taught to generations of economics students ever since. This argued that the Great Depression could have been avoided if the Federal Reserve had been more proactive about printing money. Yet the Japanese experience of the 1990s -- persistent deflationary malaise unresponsive to near zero-percent interest rates -- shows that it is not so easy to inflate one's way out of a debt bust."
Bernanke's strategy may provide some temporary relief, but it won't fix the underlying problems. The debts will have to be brought forward and written off, insolvent institutions will have to be shut down, indictments will have to be served to those who defrauded investors, and transparency will have to be reestablished. Bernanke and his colleagues at the US Treasury believe they can bypass these confidence-building measures by simply opening the liquidity-valves and waiting for the economy to come charging back to life, but it won't work. Liquidity is not credibility and it's the lack of credibility that has investors racing for the exits.
Last week, the yield on the 3 month Treasury went negative, which is to say, the buyer of the bond would actually lose money at the date of maturity. So, why would an investor buy a T-bill for $100 when he knew he would only get $99 back?
Fear; pure, unadulterated fear. The same fear that has pushed 30 year Treasurys to historic lows, kept the VIX "the fear gauge" in the stratosphere for months on end, and sent global stock markets into the biggest swoon since the 1930s. Bernanke's liquidity injections don't address the panic that has spread from the trading pits to every hearth and hamlet across the country where the tremors from the credit crunch are now being felt.
The problem isn't just money either, but how quickly the money is turned over. The Fed has increased the money supply at an unprecedented pace and expanded its balance sheet to $2.25 trillion, but velocity is down. Activity in the secondary markets has slowed to a crawl. Wall Street is leading the economy into recession. In 2005 through 2007, nearly 60 percent of the banks revenues came from securitized loans, that is, loans that were passed on to the big investment banks where they were repackaged and sold to foreign investors and hedge funds as securities. According to the Wall Street Journal, " the issuance of nonagency mortgage-backed securities (MBS) in America has plunged by 98% year-on-year to a monthly average of $0.82 billion in the past four months, down from a peak of $136 billion in June 2006. There has been no new issuance in commercial MBS since July. This collapse in securitization is intensely deflationary."
This point is usually ignored by the pundits. Securitization increased velocity which added significantly to GDP, but that part of the market is now frozen--the investment banks are gone and the hedge funds are in distress--and the commercial banks are not capable of making up the difference. That means credit will continue to contract no matter what the Fed does. The recession will be long and deep.
Obama's economic team has signaled that they will try to revive consumer spending with a gigantic $1 trillion stimulus package. But $1 trillion barely covers the $800 billion that homeowners withdrew in home equity in 2007 alone. (Today home equity withdrawals have nearly disappeared altogether) But stimulus doesn't deal with the deeply-rooted problems either; its just another band-aid for a sucking chest wound. Besides, as chief blogger at Naked Capitalism points out, it is unlikely that economist John Maynard Keynes would have approved of the stimulus which Obama is championing:
"Now to my doubts about the proposed remedies, namely monster stimulus and monetary easing. First, as mentioned before, the analogy is to the US in the Depression, which we have said repeatedly before is questionable. The US in the 1920s was the world's biggest creditor, exporter, and manufacturer. Our position then is analogous to China's now. Indeed, Keynes in the 1930s urged America to take even more aggressive measures, and argued that it was not reasonable for the US to expect over-consuming, debt-burdened countries like the UK and France to take up the demand slack. So even though most economists are invoking Keynes, it isn't clear he'd prescribe such aggressive stimulus for the US and UK now."
Treasury Secretary Timothy Geithner and presidential adviser Lawrence Summers believe they can fire off a massive stimulus salvo and put the economy back on track, but it will take more than that. The financial system needs fundamental structural reform and both men rose to power because they proved themselves loyal defenders of the status quo. Geithner and Summers may nibble at the edges and make grandiloquent proclamations about rebuilding the system, but when its time to pull the trigger, they will subvert every attempt to regulate or oversee the system which they feel is the sole province of the establishment elites who own the big financial institutions. There's bound to be plenty of blasting trumpets and celebratory confetti to greet Obama's economic whiz kids. Just don't expect change. Barring a complete economic meltdown, the rot at the heart of the system will continue to fester and grow under Obama just as it did under Bush and Clinton.
How can one maintain a free market system when financial institutions are not allowed to fail?
And how can such a system function properly without stop signs, guard rails, speed limits or rules that determine what side of the road one can drive?
And how can confidence be strengthened when no one pays for predatory lending, ratings manipulation, malfeasance, fraud, or any other white collar crime? So far, not one indictment has been served in the biggest financial swindle of all time. That's not how a "rules-based" system is supposed to operate.
Meanwhile, the economy continues to deteriorate faster than anyone expected. Companies are cutting back on investment, slowing production and laying off workers. Corporations are unable to finance ongoing operations or expansion because of widening spreads on corporate bonds. The volume of debt issued around the world plunged by 75% in the last three months, according to the Bank for International Settlements (BIS). "Net issuance of bonds and notes by corporations, financial institutions and governments fell to 247 billion dollars (195 billion euros) from 1.086 trillion dollars in the second quarter." US households have begun paying down debt for the first time since the Fed kept records in 1952, another setback for an economy that depends on consumer spending for 72 percent of GDP. Also, the unemployment rolls have surged by 573,000 in November, creating 1.5 million jobless in the last 6 months. All of the economic data, including reinvestment and earnings, is showing weakness while asset prices across the spectrum--stocks, real estate and commodities-- continue to lose altitude. The prospects for a quick recovery are slim to none.
Undeterred by the pervasive signs of deflation, Bernanke is planning even bolder moves to stimulate spending and get credit flowing through the system. The Central Bank is purchasing securitized debt from Fannie Mae and Freddie Mac, buying $200 billion of credit card and student loans from finance companies, and has stated its intention to buy US Treasurys to keep long-term interest rates artificially low. Buying Treasurys is the equivalent of trying to cover a bank overdraft by issuing a check to oneself. This is the point at which monetary policy and lunacy intersect. Nevertheless, the scholarly Fed master is convinced that with a little ingenuity and a well-oiled printing press, success is certain.
The economic headwinds Bernanke is facing are ferocious. Consumer debt is at an all-time high, more than $13 trillion. And, as journalist Stephen Lendman notes, "As a per cent of GDP, total credit market debt is now double its 1929 level at about 350%." We have reached peak credit, a tipping point where consumers are forced to curtail spending and hunker-down for leaner times. The conventional strategy of pump-priming with low interest credit or stimulus checks from Uncle Sam will only soften the blow from the hard landing ahead. The fear of job loss, insolvency and even destitution is gnawing away at the psyche of maxed-out consumers. Hardship is reshaping attitudes towards spending. Bernanke's "zero down", "no doc", "adjustable rate" easy money is out of step with the times. Profligate consumption is no longer cool. With Housing prices crashing and the Dow Jones on track for its worst year since the Great Depression, people are no longer feeling flush. In fact, tumbling property values have chopped a hefty $4 trillion from household balance sheets already while wages have continued to stagnate.
The Fed's persistent price-fixing and market interventions can only succeed as long as there's a reliable pool of speculators willing to borrow capital and put it to work to turn a profit; that's the basic premise of bubblenomics. With the financial system deleveraging, the broader economy contracting, and commodities, stocks and housing flat-lining; there are fewer and fewer opportunities for even the most risk-tolerant investor. That's why Bernanke is planning to force-feed credit into the system via untested methods that, many believe, will engender Weimer-like hyperinflation when the recession winds down. If the economy kicks in faster than Bernanke figures, he'll have to mop up $8.3 trillion of liquidity or watch while the dollar gets torn to shreds.
For now, the problem is deflation; steadily falling asset prices which are shrinking profits, increasing layoffs and forcing fire sales of distressed assets. As unemployment soars, aggregate demand falls even more, causing a vicious downward cycle. Once deflation becomes entrenched--as Japan discovered during its "lost decade" in the 1990s---it becomes more difficult to eradicate. Between 1994 to 1999, Japan initiated 7 stimulus packages which amounted to hundreds of billions of dollars. All of them failed to restart the flagging economy. According to the Wall Street Journal: "Only in this decade, with a monetary reflation and prime minister Junichiro Koizumi's decision to privatize state assets and force banks to acknowledge their bad debts, did the economy recover."
By allowing the banking giants to conceal their mountainous debts, Bernanke and Paulson are following the same spotty path to disaster creating a zombie financial system that depends on regular infusions of state largess to maintain operations and avoid liquidation. It's a lose-lose situation.
The latest essay by London Banker, "Deflation has become Inevitable", has been widely circulated on the Internet, but is worth reprinting here to underline the glaring and, perhaps, fatal flaws in Bernanke's thinking:
"For a while now I have been on the fence on the inflation/deflation issue .... I’m now coming down on the side of deflation for a very simple reason: there is no longer any incentive to save or invest, and so debt and investment cannot increase much beyond current bloated levels....
The determination to avoid any accountability for failed banks, failed business models, failed regulatory systems and failed academic rationales for all the above invites anyone with spare cash – an increasingly select crowd – to withhold it from further depredations. It is this instinct, more than confidence in the government, which is driving so many to seek the temporary safety of short-dated government securities.
The result of discouraging domestic and foreign creditors and investors must be inevitable deflation as debt levels become increasingly hard to finance and ultimately contract. Irresponsible central banks and governments can try to bail out the failed banks, businesses and municipalities at the centre of every popped bubble, but the bubble economies are ever more certain to deflate with each bailout. Each bailout further undermines the market discipline which is bedrock to a saver or investor’s decision to part with hard-earned cash by trusting it to the intermediation of the management of a bank or business.
It’s this simple: I won’t invest in a country that bails out failure and punishes savers. I won’t invest in the US or UK until they change course and protect savers and investors, ensuring a reasonably predictable positive return.
It is now clear to me that policy makers in the West are determined to apply every available resource to underpinning failure, misallocation and executive excess. As this discourages the honest saver from parting with cash, policy makers are ensuring that deflation will wreak its havoc on the financial and real economies of the world. Only when that deflation has played out and rational policies that reward market-based management and returns are restored will it be worthwhile to invest again. In the meanwhile, any wealth saved securely from state seizure will "swell" to buy more assets in future - a key aspect of deflation and a key means of restoring the control of the economy into the hands of more farsighted savers and investors.
Some day soon savers will revolt at financing further depredations. They will refuse to buy even government securities, gagging at the quantities of issue forced upon them under terms of only negative return. When that final massive bubble bursts, deflation will follow its harsh corrective course and clean out deficit-financed “unproductive works”.
The market has failed, and officialdom is collaborating in perpetuating that failure." (London Banker)
Well said.
By Mike Whitney
Ever since the two Bear Stearns hedge funds defaulted 17 months ago triggering a global financial crisis, the Federal Reserve has been busy putting out one fire after another. Fed chief Ben Bernanke has slashed interest rates to .25 percent, handed out billions in emergency funding to teetering insurance companies and mortgage lenders, and provided $8.3 trillion in loan guarantees to keep the financial system from collapsing. Unfortunately, nothing the Fed has done has either stabilized the markets or stopped the contagion from spreading to the broader economy where consumer spending has fallen sharply, unemployment has skyrocketed, manufacturing has slipped to a 30 year low, and housing prices have plummeted. Bernanke, the Princeton academic who is an expert on the Great Depression, is limited in his understanding of the crisis by his "monetarist" bias. He believes that the only way to fight credit contraction is by flooding the financial system with liquidity ("quantitative easing"). But this remedy focuses more on reducing the symptoms rather than curing the disease. Christopher Wood sums it up in an article in the Wall Street Journal article "The Fed is Out of Ammunition":
"The origins of the modern conventional wisdom lies in the simplistic monetarist interpretation of the Great Depression popularized by Milton Friedman and taught to generations of economics students ever since. This argued that the Great Depression could have been avoided if the Federal Reserve had been more proactive about printing money. Yet the Japanese experience of the 1990s -- persistent deflationary malaise unresponsive to near zero-percent interest rates -- shows that it is not so easy to inflate one's way out of a debt bust."
Bernanke's strategy may provide some temporary relief, but it won't fix the underlying problems. The debts will have to be brought forward and written off, insolvent institutions will have to be shut down, indictments will have to be served to those who defrauded investors, and transparency will have to be reestablished. Bernanke and his colleagues at the US Treasury believe they can bypass these confidence-building measures by simply opening the liquidity-valves and waiting for the economy to come charging back to life, but it won't work. Liquidity is not credibility and it's the lack of credibility that has investors racing for the exits.
Last week, the yield on the 3 month Treasury went negative, which is to say, the buyer of the bond would actually lose money at the date of maturity. So, why would an investor buy a T-bill for $100 when he knew he would only get $99 back?
Fear; pure, unadulterated fear. The same fear that has pushed 30 year Treasurys to historic lows, kept the VIX "the fear gauge" in the stratosphere for months on end, and sent global stock markets into the biggest swoon since the 1930s. Bernanke's liquidity injections don't address the panic that has spread from the trading pits to every hearth and hamlet across the country where the tremors from the credit crunch are now being felt.
The problem isn't just money either, but how quickly the money is turned over. The Fed has increased the money supply at an unprecedented pace and expanded its balance sheet to $2.25 trillion, but velocity is down. Activity in the secondary markets has slowed to a crawl. Wall Street is leading the economy into recession. In 2005 through 2007, nearly 60 percent of the banks revenues came from securitized loans, that is, loans that were passed on to the big investment banks where they were repackaged and sold to foreign investors and hedge funds as securities. According to the Wall Street Journal, " the issuance of nonagency mortgage-backed securities (MBS) in America has plunged by 98% year-on-year to a monthly average of $0.82 billion in the past four months, down from a peak of $136 billion in June 2006. There has been no new issuance in commercial MBS since July. This collapse in securitization is intensely deflationary."
This point is usually ignored by the pundits. Securitization increased velocity which added significantly to GDP, but that part of the market is now frozen--the investment banks are gone and the hedge funds are in distress--and the commercial banks are not capable of making up the difference. That means credit will continue to contract no matter what the Fed does. The recession will be long and deep.
Obama's economic team has signaled that they will try to revive consumer spending with a gigantic $1 trillion stimulus package. But $1 trillion barely covers the $800 billion that homeowners withdrew in home equity in 2007 alone. (Today home equity withdrawals have nearly disappeared altogether) But stimulus doesn't deal with the deeply-rooted problems either; its just another band-aid for a sucking chest wound. Besides, as chief blogger at Naked Capitalism points out, it is unlikely that economist John Maynard Keynes would have approved of the stimulus which Obama is championing:
"Now to my doubts about the proposed remedies, namely monster stimulus and monetary easing. First, as mentioned before, the analogy is to the US in the Depression, which we have said repeatedly before is questionable. The US in the 1920s was the world's biggest creditor, exporter, and manufacturer. Our position then is analogous to China's now. Indeed, Keynes in the 1930s urged America to take even more aggressive measures, and argued that it was not reasonable for the US to expect over-consuming, debt-burdened countries like the UK and France to take up the demand slack. So even though most economists are invoking Keynes, it isn't clear he'd prescribe such aggressive stimulus for the US and UK now."
Treasury Secretary Timothy Geithner and presidential adviser Lawrence Summers believe they can fire off a massive stimulus salvo and put the economy back on track, but it will take more than that. The financial system needs fundamental structural reform and both men rose to power because they proved themselves loyal defenders of the status quo. Geithner and Summers may nibble at the edges and make grandiloquent proclamations about rebuilding the system, but when its time to pull the trigger, they will subvert every attempt to regulate or oversee the system which they feel is the sole province of the establishment elites who own the big financial institutions. There's bound to be plenty of blasting trumpets and celebratory confetti to greet Obama's economic whiz kids. Just don't expect change. Barring a complete economic meltdown, the rot at the heart of the system will continue to fester and grow under Obama just as it did under Bush and Clinton.
How can one maintain a free market system when financial institutions are not allowed to fail?
And how can such a system function properly without stop signs, guard rails, speed limits or rules that determine what side of the road one can drive?
And how can confidence be strengthened when no one pays for predatory lending, ratings manipulation, malfeasance, fraud, or any other white collar crime? So far, not one indictment has been served in the biggest financial swindle of all time. That's not how a "rules-based" system is supposed to operate.
Meanwhile, the economy continues to deteriorate faster than anyone expected. Companies are cutting back on investment, slowing production and laying off workers. Corporations are unable to finance ongoing operations or expansion because of widening spreads on corporate bonds. The volume of debt issued around the world plunged by 75% in the last three months, according to the Bank for International Settlements (BIS). "Net issuance of bonds and notes by corporations, financial institutions and governments fell to 247 billion dollars (195 billion euros) from 1.086 trillion dollars in the second quarter." US households have begun paying down debt for the first time since the Fed kept records in 1952, another setback for an economy that depends on consumer spending for 72 percent of GDP. Also, the unemployment rolls have surged by 573,000 in November, creating 1.5 million jobless in the last 6 months. All of the economic data, including reinvestment and earnings, is showing weakness while asset prices across the spectrum--stocks, real estate and commodities-- continue to lose altitude. The prospects for a quick recovery are slim to none.
Undeterred by the pervasive signs of deflation, Bernanke is planning even bolder moves to stimulate spending and get credit flowing through the system. The Central Bank is purchasing securitized debt from Fannie Mae and Freddie Mac, buying $200 billion of credit card and student loans from finance companies, and has stated its intention to buy US Treasurys to keep long-term interest rates artificially low. Buying Treasurys is the equivalent of trying to cover a bank overdraft by issuing a check to oneself. This is the point at which monetary policy and lunacy intersect. Nevertheless, the scholarly Fed master is convinced that with a little ingenuity and a well-oiled printing press, success is certain.
The economic headwinds Bernanke is facing are ferocious. Consumer debt is at an all-time high, more than $13 trillion. And, as journalist Stephen Lendman notes, "As a per cent of GDP, total credit market debt is now double its 1929 level at about 350%." We have reached peak credit, a tipping point where consumers are forced to curtail spending and hunker-down for leaner times. The conventional strategy of pump-priming with low interest credit or stimulus checks from Uncle Sam will only soften the blow from the hard landing ahead. The fear of job loss, insolvency and even destitution is gnawing away at the psyche of maxed-out consumers. Hardship is reshaping attitudes towards spending. Bernanke's "zero down", "no doc", "adjustable rate" easy money is out of step with the times. Profligate consumption is no longer cool. With Housing prices crashing and the Dow Jones on track for its worst year since the Great Depression, people are no longer feeling flush. In fact, tumbling property values have chopped a hefty $4 trillion from household balance sheets already while wages have continued to stagnate.
The Fed's persistent price-fixing and market interventions can only succeed as long as there's a reliable pool of speculators willing to borrow capital and put it to work to turn a profit; that's the basic premise of bubblenomics. With the financial system deleveraging, the broader economy contracting, and commodities, stocks and housing flat-lining; there are fewer and fewer opportunities for even the most risk-tolerant investor. That's why Bernanke is planning to force-feed credit into the system via untested methods that, many believe, will engender Weimer-like hyperinflation when the recession winds down. If the economy kicks in faster than Bernanke figures, he'll have to mop up $8.3 trillion of liquidity or watch while the dollar gets torn to shreds.
For now, the problem is deflation; steadily falling asset prices which are shrinking profits, increasing layoffs and forcing fire sales of distressed assets. As unemployment soars, aggregate demand falls even more, causing a vicious downward cycle. Once deflation becomes entrenched--as Japan discovered during its "lost decade" in the 1990s---it becomes more difficult to eradicate. Between 1994 to 1999, Japan initiated 7 stimulus packages which amounted to hundreds of billions of dollars. All of them failed to restart the flagging economy. According to the Wall Street Journal: "Only in this decade, with a monetary reflation and prime minister Junichiro Koizumi's decision to privatize state assets and force banks to acknowledge their bad debts, did the economy recover."
By allowing the banking giants to conceal their mountainous debts, Bernanke and Paulson are following the same spotty path to disaster creating a zombie financial system that depends on regular infusions of state largess to maintain operations and avoid liquidation. It's a lose-lose situation.
The latest essay by London Banker, "Deflation has become Inevitable", has been widely circulated on the Internet, but is worth reprinting here to underline the glaring and, perhaps, fatal flaws in Bernanke's thinking:
"For a while now I have been on the fence on the inflation/deflation issue .... I’m now coming down on the side of deflation for a very simple reason: there is no longer any incentive to save or invest, and so debt and investment cannot increase much beyond current bloated levels....
The determination to avoid any accountability for failed banks, failed business models, failed regulatory systems and failed academic rationales for all the above invites anyone with spare cash – an increasingly select crowd – to withhold it from further depredations. It is this instinct, more than confidence in the government, which is driving so many to seek the temporary safety of short-dated government securities.
The result of discouraging domestic and foreign creditors and investors must be inevitable deflation as debt levels become increasingly hard to finance and ultimately contract. Irresponsible central banks and governments can try to bail out the failed banks, businesses and municipalities at the centre of every popped bubble, but the bubble economies are ever more certain to deflate with each bailout. Each bailout further undermines the market discipline which is bedrock to a saver or investor’s decision to part with hard-earned cash by trusting it to the intermediation of the management of a bank or business.
It’s this simple: I won’t invest in a country that bails out failure and punishes savers. I won’t invest in the US or UK until they change course and protect savers and investors, ensuring a reasonably predictable positive return.
It is now clear to me that policy makers in the West are determined to apply every available resource to underpinning failure, misallocation and executive excess. As this discourages the honest saver from parting with cash, policy makers are ensuring that deflation will wreak its havoc on the financial and real economies of the world. Only when that deflation has played out and rational policies that reward market-based management and returns are restored will it be worthwhile to invest again. In the meanwhile, any wealth saved securely from state seizure will "swell" to buy more assets in future - a key aspect of deflation and a key means of restoring the control of the economy into the hands of more farsighted savers and investors.
Some day soon savers will revolt at financing further depredations. They will refuse to buy even government securities, gagging at the quantities of issue forced upon them under terms of only negative return. When that final massive bubble bursts, deflation will follow its harsh corrective course and clean out deficit-financed “unproductive works”.
The market has failed, and officialdom is collaborating in perpetuating that failure." (London Banker)
Well said.
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